TCL got no guarantee of returns on CCCL invest

TCL got no guarantee of returns on CCCL invest
Published: 30 January 2006

The minister of Information, Senator Burchell Whiteman, has denied that the Jamaican government gave a guarantee to Trinidad Cement Limited (CTL) for specified rate of return on their investment in Caribbean Cement Company Limited (CCCL), located at Rockfort, Kingston.

Whiteman was responding to questions posed in the Senate Friday by Shirley Williams, Opposition spokesperson on industry, commerce and investments.

Question 1: On the divestment of the shares in the Caribbean Cement Company, what were the commitments given by the TCL Group regarding the use of indigenous materials in the manufacture of cement (in Jamaica)?

Answer: In 1999, the Government, through the NIBJ entered into agreement with TCL Group for sale of shares in Caribbean Cement Company Limited (CCCL). The research shows that no specific mention of the use of indigenous materials is made in the sales agreement.

Question 2: What quantity of clinker was imported and at what value for the years 2000, 2001, 2002, 2003 and 2004? Answer: None in 2000; approximately 40,000 tonnes costing US$1.84 million in 2001; 53,486 tonnes at US$2.42 million in 2002; none in 2003; and 41,000 tonnes in 2004, valued at US$2.1 million.

Question 3: Was any guarantee given by the Government of Jamaica to the TCL Group in respect of a specified rate of return on investment? Answer: No guarantee was given.

Question 4: What period, if any, of protection was provided to TCL Group in respect of the operations of the Caribbean Cement Company? Answer: No protection was provided to the TCL Group in the sales agreement.

Question 5: Were any concessions granted in the divestment agreement in exchange for an undertaking to expand and modernise the cement plant? Answer: No concessions were contained in the sales agreement. However, Section 8.2(i) of the Agreement for Sale indicated that CCCL should comply with the existing development plan.

Section 8.2(i) states: "The purchaser agrees with the Government of Jamaica that, on acquisition of a controlling interest or if it owns and/or controls a controlling interest, it shall ensure the continuity of the company and that the company complies with the development plan annexed hereto subject to such reasonable adjustment or substitution therefore, if any, as may be made with the consent of the GOJ, such consent not to be unreasonably withheld."

This development/modernisation plan has begun and is expected to be completed in 2008 coinciding with the removal of the 40 per cent CET with CCCL becoming more efficient and competitive. Transfer tax and stamp duty were payable on the transfer of shares were waived.

Question 7: In the divestment agreement what commitment, if any, was given by the Government of Jamaica in respect of price increases of cement? Answer: The sale agreement had no commitment in respect of price increases of cement.