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| File: one of the OPVs originally built for T&T |
"BAE Systems and this Government have reached a full and final settlement of the dispute between them in relation to the OPV contract in the sum of TT$1.382 billion.
"We are pleased that the dispute has been settled amicably. BAE has agreed to pay the Government of Trinidad and Tobago this sum," Attorney General Anand Ramlogan said at a news conference Monday afternoon.
The new People's Partnership administration cancelled the deal shortly after taking office in 2010 after it determined that BAE did not build the boats according to specifications. In addition there were high cost overruns.
A report in the Financial Times Wednesday said BAE stated that the settlement was “at an amount consistent with provisions held”. FT quoted a top financial analyst as saying that the settlement is likely to be for £125m-£130m or about TT$1.3 billion.
When the TT government cancelled the deal BAE stated, "Whilst the financial consequences of any termination cannot be definitively assessed at this time, the Group estimates a further charge of up to £150 million, before tax, may be required in the Group's accounts for 2010, before recognising value from the potential re-sale of the vessels. The company will seek to engage in commercial discussions with GORTT to find an equitable settlement."
Last year BAE sold the boats to the Brazilian navy last December for just over TT$1billion.
Last year BAE sold the boats to the Brazilian navy last December for just over TT$1billion.
In July 2010, Prime Minister Kamla Persad-Bissessar said her government did not have money to sink into a "black hole" created from the multi billion-dollar contract to acquire OPVs.
Speaking with reporters on her return home from a 10-day foreign trip, Persad-Bissessar said the state had already invested "too much" on the vessels and Cabinet will now have to consider whether to cut its losses.
"So much money has been spent on these vessels, the vessels are not ready for delivery. My information is that they are defective in many ways and will not be able to be delivered.
"I do recall they have been promised and promised, every month it was two months and then three months and there was always shifting all the time as to delivery dates," she said.
In September 2010 Persad-Bissessar confirmed that her government had scrapped the deal and added that BAE would have to refund the TT$1.5 billion for the three ships and also pay compensation of about $61 million for "significant breaches" of the OPVs contract.
"There are stories that I have been reading that we owe BAE money and we breached the contract. No, that is not the case at all. I am advised that BAE is in breach of the contract because of two reasons.
"They (BAE) are in breach because of delay, which was the most substantial cause we have to termination of the contract, but they are also in breach because they have not been able to comply with the specs that had been contracted for," she said.
Related story: We don't owe BAE one cent
In June this year opposition MP Colm Imbert stated that the government had lost the arbitration matter. That led to a rebuke from the office of the Attorney General.
In a media release at the time the AG's office called the statement by Imbert "totally mischievous and completely false".
It added, "It is, quite frankly, a reckless statement which bears absolutely no resemblance to the truth. In fact, the arbitration hearings have not yet been completed, with the parties scheduled to make their respective closing submissions to the arbitration tribunal later this month.
"Furthermore, the hearings have been in relation to liability only thus far, and the dates for the hearings on quantum are still to be finalised...this Government shall continue to act responsibly in this matter and refrain from making any further comment at this time in relation to a legal dispute in which a decision has not yet been delivered."
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