(Trinidad Guardian) A new scandal has emerged at the state-owned National Gas Company Ltd, this time the cost to taxpayers is almost TT$200 million and the company has said it has learned its lesson from the débâcle.
The revelation comes on the heels of another scandal where it spent well over quarter billion on a failed attempt to save Atlantic LNG Train 1 and its board of directors asked the Government, and received protection, from responsibility for the loss of taxpayers’ dollars.
At the centre of this latest scandal, the NGC started a project in 2017 that included the design, procurement, construction, and commissioning of a compressor facility at NGC’s New Abyssinia Accumulator Station (NAAS) Beachfield facility, Guayaguayare. Well into the project the company discovered there was no need for it and after spending TT$197.5 million stopped it. The result is a loss of the money and the company stuck with TT$100 million worth of compressors it has not been able to sell.
Thanks to another whistle-blower the Business Guardian has numerous documents including the bilateral agreement between bpTT, NGC, TT LNG and NGC pipeline company over the project that seem to suggest it was poor project planning and a lack of delivery of the project on time that led to the fiasco and the inability of the NGC to recover its money.
In response to a number of questions from the Business Guardian, the NGC admitted to the failed project and the loss of the money. It said, “A management review of the business case for compression facilities at NAAS in the latter half of 2018 was precipitated, noting the substantial costs remaining to complete the project. Both technical and commercial assessments were conducted and, following NGC’s governance process through the operations committee, NGC’s board accepted management’s recommendation to mothball the compression project in December 2018. The cost incurred at that juncture was TT$197.5 million.”
The company said the main reasons for the decision to abandon the project were:
• Firstly, the reduced likelihood of operational scenarios that would trigger the need for the compression of low-pressure gas due to TROC project operation.
• Secondly, improvements in NGC network management capabilities.
“This decision avoided an additional cash outlay of TT$127.5 million to complete the project and an operating cost of TT$15.0 million annually. This is in the context that there would be a low probability of use of the installed equipment, and attendant costs of infrequent operation,” NGC told Business Guardian.
It added that one key learning was that projects needed to follow a robust stage gate methodology process.
This, it explained, gives management the opportunity to stop the project at earlier stages, as technical and operational information become available, versus, in the case of the Beachfield project it proceed into execution.
“Therefore, since 2018 NGC has focused on organising workflows to follow a project management methodology stage gate process, which also improves the integration with supply chain management.
“This, along with improved reporting of project performance including tracking stage gate compliance, scheduling, and costing, ensure compliance to governance requirements. Since 2018, with these interventions, project management performance has stabilised, become predictable and improved.
