Originally published in the Sunday Guardian (June 29th )by a Guest Author and was republished by the Energy Chamber

Anyone who works with addicts will know that the only chance for them to face and tackle their demons is to acknowledge the addiction in the first place.

So, here’s the good news: Petrotrin’s new leadership is openly acknowledging the company has an addiction problem. Several, in fact. It’s addicted to poor investment choices, it’s addicted to bloated payrolls and it’s addicted to unserviceable debts, just to name a few. Above all, it has been addicted to the mismanagement of what was supposed to be the country’s flagship business.

Although by now the company’s vital organs are severely damaged by all these addictions, there’s a chance to save it and make Petrotrin the pride of Trinidad and Tobago, not the basket case it has been. Fixing it, though, will be tough.

Let’s be frank. If publicly traded, Petrotrin’s shares would be worthless by now. It’s a company without access to the funds needed to maintain and grow production, it’s struggling to make a profit, it needs to repay over USD$ 1.5 billion it owes and it operates in a toxic labour environment, dealing with a union leadership that would rather sink the company than help make it viable.

None of this is new. The company’s current chairman, Wilfred Espinet, has been beyond candid about Petrotrin’s state of failure. He has also been vocal in reminding all of us that what happens at Petrotrin matters to every citizen. After all, as taxpayers, we are all Petrotrin’s shareholders.

Over the past few months, he also shared some astonishing (but not surprising) facts about Petrotrin. The payroll for its 5,000 or so workers accounts for more than 50% of the company’s operating costs, including a monthly overtime bill of TT$ 22 million (an eye-watering monthly average of $ 4,400 per employee) and over 180,000 leave days accumulated by the workers (averaging over 35 days of leave days accrued per employee). And not to mention the example of a member of staff who has been paid for the past four years without turning up for work but yet can’t be fired.

Petrotrin’s problems are compounded by the fact that, through a mix of incompetent management, meddling governments (across the party divide) and a bullying union, it has an over generous pay policy that is completely decoupled from its performance or the country’s reality.

In a survey conducted by the Energy Chamber in 2016, some of Petrotrin’s basic salaries were more than double what local energy service providers were paying. A truck driver, for instance, was paid over $15,000 a month in basic salary alone (before Petrotrin’s generous benefits). At least the gap narrows at professional and managerial levels and, at more senior roles, Petrotrin’s staff tend to be paid a lower basic salary than their private sector peers (although the generous benefit package they enjoy is bound to make a difference).

According to its management, the average monthly pay package in Petrotrin is close to $40,000. Some may say that well above average pay is a good thing, making sure even those at the bottom of the structure are well paid. Indeed, it would be good if it were not for the fact that this is only possible by having all taxpayers (including those at the lower steps of the pay ladder) effectively subsidising a minority of workers. It’s frightening to see how so much salary is owed by so few to so many.

Petrotrin’s demise cannot be avoided by tackling its pay and employment policies alone but that would be a good start. In a perfect world, and together with the union that is supposed to look after the long-term interests of its membership, it would be agreeing at least a temporary pay reduction across the board, overtime controls and reduction in other benefits to immediately reduce the amount it spends on payroll. This, in turn, would release more funds for it to invest in much needed upgrades and help it meet its financial obligations.

New hires should be brought in with more realistic packages, benchmarked against the sector and the wider economy. And, still respecting the need to be fair and just, both management and union ought to support a streamlined disciplinary process that would allow for the incompetent, dishonest and absent to be fired as quickly as possible. Nonsensical and anti-competitive rules defining how much service providers must pay their own staff when contracted by Petrotrin also must go.

This won’t be easy because its union, the OWTU, refuses to accept that the company has a payroll problem.  Over the past few weeks, it has returned to the familiar posturing, refusing to acknowledge a reality everyone else can see. And whilst always complaining about government meddling and failures, it is back to the old mantra of asking the government to sack the current board.

There’s a lot more to be done. Private capital – through direct investment or via a partial floating of the company - may be needed to help fix and improve its infrastructure (but not new white elephants) as both Petrotrin and the government cannot afford to put more money into the business. And Petrotrin must be allowed to operate as a viable commercial enterprise, not as an arm of the government, usually paying the price of populist meddling.

It can be done. As Petrotrin continued to lose money, Equinor (the new name for Norway’s majority state-owned Statoil) posted a net income of USD 4.6 billion in 2017 with a workforce just four times bigger than ours. In other words, each Equinor employee generated over USD 200,000 in profit in the year, whilst ours have been generating losses. Their workers win, their shareholders win and taxpayers in Norway win.

The difference? They have been addicted to good governance, efficiency and quality strategic investments. We haven’t.