In Trinidad: 26 Billion Govt Investment Target for Fiscal Year 2012

13 October 2011

Dookeran remains comfortable with the oil price of US$75 per barrel and gas price of US$2.75 per mmbtu pegged to the 2011/2012 budget

Finance Minister Winston Dookeran said Government has identified an investment target of $26 billion for fiscal year 2012. Speaking with reporters at his office yesterday, he said this figure was based on three contributing factors: (a) actual commitments given to it by the energy companies; (b) actual allocations made through appropriations in the budget in public sector enterprises; and (c) an estimate of the private sector investment.

Not included in this $26 billion are possible projects from three other major investors in the energy sector, the Minister said.

He added that at the same time Government estimated to get $2 billion more in revenue over the next fiscal year. This was not “outside of our capability”, he said. The first source of this increase would be the accelerated auditing process for the energy companies which would allow Government to pick up past revenues. The second source of increase revenues would come from the greater efficiency in the VAT administration. Government was able to introduce some new compliance measures as well as clear the backlog, Dookeran said.

Responding to suggestions that the oil and gas prices to which the budget was pegged were unrealistic, Dookeran said Government arrived at these prices based mainly on a number of consultations both with the local energy companies and with the international institutions which provide Government with estimates.

He added that he was pleased to see the American Chamber saying the assumptions appeared to be realistic. “We feel comfortable with it (oil and gas price). There was a basis as to whether we should lower it. But in the final analysis, we made that decision on the assumption that the growth in the US economy may fall, but not so dramatically as to reduce the demand for oil, and secondly the increase in the demand for oil in Asia is likely to rise,” Dookeran said.

On the performance of the 2011 capital programme, the Minister stated that last year there was a shortfall in total expenditure of the Public Sector Investment Programme (PSIP), which picked up in the last four months, “so we ended up with a similar budget deficit as we had projected”.

Noting that public sector was only one component of growth, he said the expectations for investment in the energy and private sectors were not realised.


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