Minister of Finance Chris Sinckler says he will not despair over the fact that the sale of the state-owned Barbados National Terminal Company Limited (BNTCL) to regional petroleum products giant Sol, will not be finalized in time to be factored into the calculations of international credit rating agencies Standard & Poor’s and Moody’s, who are expected to published their next quarterly report in June.
The sale of the of the country’s lone oil terminal for US$100 million -together with the Wyndham Resort at Sam Lord’s Castle and the construction of the Hyatt Centric, which has also been halted by a court injunction – had been touted by the Freundel Stuart administration as a means to shore up the dwindling foreign reserves, which fell to a worrying ten weeks of imports.
Rubis West Indies Limited last month secured an interim injunction until May 26, stopping the proposed sale, which it claimed would create a monopoly.
The company also filed an application in the High Court for judicial review of a decision to approve the inclusion of a 15-year moratorium clause in the Sale and Purchase Agreement between a Sol subsidiary and the Barbados National Oil Company Limited (BNOCL).
However, in the face of further possible downgrades as a result of these setbacks, Sinckler told Barbados TODAY that Government had no intention of marching to the beat of the rating agencies.
“I am not running my ministry with one eye on any rating agency, we are doing what we are doing in the best interest of the country,” Sinckler said Monday at the Carlton cricket grounds, where he hosted kite flying competition for his St Michael North West constituency.
“The rating agencies would do what they have to do – their actions do have an impact on us but we have to do what is in the best interest of Barbados. The people who do the assessments would have to judge by what action we take,” he added.
Just last month, Moody’s downgraded Government bond and issuer ratings to Caa3, placing Barbados on the same level as Greece, the Ukraine and Venezuela, and all but stating that the home-grown austerity programme had failed.
It came six days after Standard & Poor’s had reduced the country to ‘CCC+/C’ on account of its limited financing alternatives and low international reserves.
Notwithstanding, the minister urged Barbadians not to despair as he argued that the sale of the BNTCL was by no means Government’s only plan to return the foreign reserves back on solid footing.
“There are inflows other than through the sale of the BNTCL. Those were some key ones and quite frankly critical, but there are many other projects, some of which have come in. We
would not have listed them or reiterated them as we did those three because those three are significant.
“There are others that flow into the country all the time, we just have to make sure that we manage the demand until such time that the bigger ones come in and to ensure that we defend our currency. We believe we have enough of those and there is no case for any devaluation,
so we feel reasonably comfortable in that regard, but that does not mean that everything is settled, “ he stressed.