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Talks Fail To Resolve Issue On Fuel Subsidy

KINGTSOWN, St. Vincent, CMC – Prime Minister, Dr. Ralph Gonsalves, says recent talks with the Trinidad and Tobago government to address the issue of the fuel subsidy given to the Port of Spain-based Caribbean Airlines (CAL) have failed to resolve the matter.

Gonsalves is chairman of the regional shareholder governments that owned the Antigua-based airline, LIAT, which has accused the administration in Port of Spain of providing an illegal subsidy to CAL.

Trinidad and Tobago Finance Minister, Larry Howai, said recently that Port of Spain provided US$40 million to CAL last year in subsidies.

Gonsalves said the issue had been raised in Port of Spain during the just concluded Caribbean Community (CARICOM) summit and both LIAT and CAL maintained their respective positions.

“I am of this view that this matter is going to be resolved only through arbitration and or the Caribbean Court of Justice. I don’t think that Trinidad and Tobago would want to settle this matter,” he told a news conference.

Prime Minister Gonsalves told reporters that during the talks, the position of the different persons who spoke for Trinidad and Tobago was “to admit that they do a subsidy then to deny that they give a subsidy, then that if they give a subsidy, it doesn’t mean that it impacted negatively on LIAT.

“And I simply ploughed along with the facts on my side and the law on my side. We didn’t yield, and, except for their equivocation as to whether they had a subsidy or not, they didn’t yield,” Gonsalves said, adding the meeting should have been a private one.

“I am still hoping that there would be a private meeting. But I put all the matters transparently to the public because this is not a friend-friend business. This is a serious matter concerning the people.

“I don’t see how I can be asked to pay in LIAT $130, $140, $150 U.S. a barrel for fuel and CAL pays between $50 and $60 and you coming on the same routes with me. That’s unacceptable, it’s wrong, it’s unlawful. And I have the facts and I have the law on my side with this one,” he said.

“If we can’t settle it amicably, we will have to take the option of going to arbitration in one direction or under the CCJ in another.”

Gonsalves said Trinidad and Tobago said they might remove the subsidy all together.

But he said that while that is fine with him, LIAT still would have suffered loss and damage and can claim it.

“But if we are to get that subsidy or something close to what CAL gets, we can drop the fare in LIAT. That’s the reality,” he said, noting that the fuel subsidy had fired reservations in the Organization of Eastern Caribbean States (OECS) ahead of the sub-region joining the CARICOM Single Market and Economy (CSME) that allows for free movement of goods, skills, labour and services across the region.

“We had a study done in the OECS which showed that the OECS could lose, if we entered the Single Market. But we went in saying what we lose on the swing we gain on the roundabout, for instance the CARICOM Development Fund.

“This subsidy is a serious problem in CARICOM,” Gonsalves told reporters.

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