How not to buy a ferry

By Carlton Joseph


Recent visitors to Trinidad and Tobago experienced some problems, especially when trying to get from Trinidad to Tobago. The one Ferry, T&T Express,  which was servicing this route had to be taken out of operation because of ” insurance issues and rough seas. ” Insurance issues?  As with many  things in this twin-island republic, there was no  explanation about the insurance issues

The second Ferry, T&T Spirit, has been in dry dock since June 2017.  When will this vessel be operational?  What are the problems? What is the cost to-date? What is the projected cost to complete repairs?  These vessels are the bridge between the two islands that is supposed to make the islands operate at optimum levels in terms of movement of people, business transactions and, in general, to make the twin islands operate as one cohesive unit.  Are  Trinidadians  and  Tobagonians that incompetent?

Additionally, there is a one-year contract for the cargo Vessel, MV Cabo Star, at a rate of US $22,000.00 per day that ends in July.  I must admit that I am now totally confused and incensed since we are given no information on the revenue per day for this leased cargo vessel, and I am not sure if this vessel is exclusively for cargo. Or is this a scheme to spend taxpayer’s money to enrich businessmen and politicians?

In an attempt to address this sea-bridge problem, the government has purchased a vessel, named Galleon, from a company in China.  The Galleon was purchased for TT$117.4 million, and is scheduled to arrive in Trinidad April 28, 2018.  The Trinidad Guardian reports that the vessel was built for a Venezuelan customer who cancelled the purchase due to social and economic circumstances in Venezuela. The paper  also reported that the government will spend an additional TT$2.7 million to install more toilets, seating upgrade and covering for the sundeck before it takes up service. There is an additional cost of TT$5.4 million to fund the journey from China to Trinidad and Tobago.  The projected grand total is TT$125.1 million or US$18.5 million for this procurement.

Finance Minister, Colm Imbert, revealed that the government had two valuations on the vessel for approximately US$19.million. And he claimed “the independent valuation is significantly more than the cost, plus retrofitting.”He said that ” even if you add the cost of ocean transportation to the cost of the vessel, which is not really applicable because there would have been a mobilization cost associated with any vessel that was acquired, it’s very good value for money.”

As a businessman and boat owner, I was alarmed at Imbert’s remarks.  First I am concerned about what criteria were deployed in deciding to purchase a Ferry Boat.  Did the government develop specifications concerning the type of boat they needed? Or did they just send someone to buy a boat?  This particular purchase

has me concerned that someone was trying to bail out a friend in Venezuela that had gone broke.  Concerned, because I do not understand why you would purchase a boat in China, that you then have to modify for the newly intended purpose and then put considerable engine hours on the vessel to get it to Trinidad.  Remember, a significant factor is placed on engine hours when purchasing a boat.  Did the government factor these hours in the purchase price?  This is a long journey in a short period of time; I am certain that additional work will have to be done in Cuba to ensure the Ferry’s sea-worthiness.

Imbert claims that there would be mobilization costs associated with any vessel that     was acquired.  I have purchased many boats, not as large as the ferry, but I have never encountered any mobilization costs. Is Imbert confusing a ferry boat purchase with the start-up of a construction project? To ensure that I was not falsely accusing Imbert of transmitting incorrect information, I decided to call up some shipyards and some ferry brokers.  No mobilization costs were part of any of the deals I discussed.  But more important, I found deals that were very interesting.

One deal was for a ferry that carried 598 passengers, speed 22-23 Knots – 26-27 max.  Priced at $US 3million.  Another ferry (new) carried 900 passengers, speed 13 Knots priced at US$1.8million and would cost another US$ 1million to customize the seating.  And another carried 738 passengers, 70cars/30 trucks and sold for US$1.2million  Based on these prices I am convinced that Imbert and the government are wasting taxpayers’ money and that this procurement should be reviewed for compliance with the country’s laws.   Based on my research, the government could have purchased at least four ferries at an average price of US$3 million  and have a lot of change to make improvements on the land infrastructure supporting the ferries. I seriously question. Imbert’s claim of “value for money” with regard to this purchase.

Most disturbing to me is the lack of transparency in spending the public’s money.  Many questions remain unanswered.  Based on the modifications that have to be made, I feel certain that the delegation that was sent to procure the ferry had absolutely no criteria or guidelines for the purchase.   The claim that the ferry was being modified because “in the part of the world where the vessel was to operate there are passengers who like to sun themselves” is laughable, since Venezuela and Trinidad share the same climate.  This begs the question:  Did the government purchase a pleasure boat to operate as a commercial ferry?  Imbert claims that in the event of a storm en route to Trinidad, the vessel is capable of higher speeds, which will allow it to sprint to places of refuge.  I hope he has procured insurance for the journey.

Finally, I am amazed that this government is continuing to make the same procurement errors that should have long been resolved – after 50 plus years of independence.  The claim that the contract was terminated and that the government moved in on the opportunity and secured the vessel at a cheaper rate is preposterous.  Contracts have a termination clause where the original purchaser would have to pay heavy penalties and interest plus other costs for terminating the contract.  The admission that the modification work could have been done locally is also of concern.  This government has allowed US$350,000.00 worth of work that could have aided our ailing economy, to be performed elsewhere.   Recently the government installed its first Procurement Regulator, Moonilal Lalchan, who promises that the public will get value for money.  To quote Lalchan “This is huge in terms of expectation. When we get it right, and I am not saying ‘if.’ When …It is my intention and the board’s to make the effort.”

Good luck Mr. Lalchan, I expect that you will get it right.

(Trinidad-born Carlton Joseph who  lives in Washington DC, is a close observer of political developments in the United States.He recently visited Trinidad.)