PORT-OF-SPAIN, Trinidad -- Trinidad and Tobago has won an arbitration between UK based BAE Systems over the cancellation of three offshore patrol vessels (OPVs) to the tune of TT$1.382 billion (US$215.5 million).
Attorney General, Anand Ramlogan announced at a press conference at Cabildo Chambers in Port-of-Spain.
"BAE Systems and this government have reached a full and final settlement of the dispute between them in relation to the OPV contract in the sum of TT$1.382 billion. We are pleased that the dispute has been settled amicably. BAES has agreed to pay the government of Trinidad and Tobago this sum," Attorney General Anand Ramlogan said at a press conference in Port-of-Spain.
Ramlogan explained that, in April 2007, the former administration undertook to purchase three OPVs from VT Shipping Building, under which BAE Systems were contracted to design and construct the vessels. In addition BAE Systems were to provide training and maintenance for the vessels.
"The total financial commitment at the prevailing exchange rates then for this project was TT$2.192 billion," Ramlogan said.
The attorney general continued to explain that, once delivered, it would have placed a recurrent annual expenditure of $32 million on tax payers. "No doubt, this figure would have progressively increased as the vessels as a result of deterioration and problems associated with everyday use."
To address the issues surround the OPVs, Ramlogan said when the People's Partnership assumed office in 2012 it served a notice of cancellation on BAE Systems to terminate the contract on September 16, 2010.
"We were not prepared to accept these vessels in a defective condition. The risks were too many and too great. In response, BAE served a notice of arbitration on the Government, claiming damages in the sum of TT$611.032 million plus interest and costs. Trinidad and Tobago filed a counter claim in the sum of TT$1.654 billion," Ramlogan recounted.
Ramlogan said the cancellation and counter claim was undertaken following "careful consideration and after receiving sound legal and technical advice".
Saying he was giving the "truth" about the circumstances surrounding the arbitration, Ramlogan explained that the case was tried in London in May 2012. Evidence was given on behalf of the state by himself, Commodore Garnett Best and Captain Mark Williams.
"Subsequent to the arbitration hearing, the parties, as a result of a diplomatic initiative, engaged in discussions. I am pleased to announce that those discussions have been fruitful," Ramlogan announced.
The attorney general went on to explain that settlement meant that, after repaying the initial loan which was taken for the project, the government will remain with a surplus of $340.09 million.
"This money could build hospitals and roads." Ramlogan also stated that the early payment of the loan will result in a savings of $57.149 million in interest.
"Let us not forget the operational costs for the three OPVs which would have been approximately TT$32 million per year. Trinidad and Tobago has therefore emerged victorious in this dispute. This settlement is a significant victory for the people of Trinidad and Tobago. Far from having to pay BAE any money we have come out of this transaction with TT$1.382 billion. After repayment of the outstanding balance on the loans, there will be a surplus of TT$340.09 million which can go towards the construction of our hospitals and police stations."