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Let’s hear from PM on CAL issue

Friday, December 10, 2010

The issue of where responsibility and authority lie for state-owned enterprises has once again surfaced, this time in the instance of the board of Caribbean Airlines Ltd (CAL) and the line minister with Cabinet and political responsibility for the airline, Minister of Works and Transport Jack Warner. It is the said issue which was raised in the Manning Cabinet by Planning Minister Keith Rowley, who protested vigorously that he had no control over the operations of the Urban Development Company of T&T (Udecott). It was the issue which got him fired with then Prime Minister Manning seeming to take the position that Udecott had been established for the purpose of fast-forwarding the Government’s construction programme and in doing so was not bounded by the need to report to or be encumbered by ministerial direction.

In that instance, executive chairman Calder Hart seemed to exercise power and authority answerable only to the Prime Minister. Then, too, Manning’s ministers, particularly the one with responsibility for Udecott, made a dance around the subject, obviously aware that the Prime Minister had signalled clearly through the firing of Dr Rowley that Mr Hart and the Udecott board should be given complete latitude. But reviewing the contentions surrounding the issue, Prof John Uff and his commission were in no doubt about where the authority should lie: “There should be no doubt (as there presently is) as to the power of the minister to give instructions to government agency companies on any matter within the minister’s remit, including compliance with rules, regulations and procedures.”

That position gives full responsibility for overall policy direction of the state enterprise to the minister and Cabinet, who ultimately have to answer politically to the electorate and the population. Such a distribution of power and authority can be likened to that exercised in a private enterprise by the shareholders, to whom the board must answer before and after major decisions are taken. Put differently, state boards cannot be runaway horses unto themselves, ignoring ministerial directives when, in fact, it is the minister, the Cabinet and the Government which have to account to the taxpayer and shareholder for the performance of the enterprise. It is a government during and at the end of its electoral term which has to account for its management of the enterprise of T&T and not a chairman and board of a state enterprise.  

Of course, it does not give the minister and the Cabinet the right to intervene in day-to-day decisions that are to be made in the running of the enterprise. Indeed, not even the board should be involving itself with the daily operations of the enterprise once the general policy direction has been established. It is up to the management of the company to operationalise the policies and plans. So that while Minister Warner may legitimately feel that he should have access to board minutes, that would only be for the purpose of making sure that the board is pursuing Government’s overarching policy for the enterprise and not a licence to intervene unnecessarily and without just cause in the running of the state enterprise.

Recognising she had to do something, Prime Minister Kamla Persad-Bissessar, when petitioned by her line minister, called in the appointed boards and presumably laid down the reporting relationship which should exist between boards and their respective ministers. However, the Prime Minister has not as yet set the public record straight on the issue involving Mr Warner and the CAL board. She would be neglecting her responsibility to tell the national community the Government’s position on the matter.


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