The process has been slowed by leadership changes in Barbados and Trinidad and Tobago.

British American was placed under judicial management when its parent company, the Trinidad-based conglomerate CL Financial - which also operated the beleaguered Colonial Life Insurance Company (CLICO) - collapsed.

Trinidad last year had pledged US$100 million to the rescue effort, under the Manning administration, as part of a plan being worked out with the Organisation of Eastern Caribbean States (OECS) and other Caribbean governments, who agreed to partner with investors to form a new company to assume British American's liabilities.

But the new Kamla Persad-Bissessar government withdrew from the arrangement in December.

Gonsalves spoke of the new difficulties during a 'consultation' radio programme, as his government formulates the 2011 budget to be laid before Parliament later this month.

"If you had asked me the 23rd of May or the morning of the 24th of May last year, I would have told you 'Yes, we have an arrangement going, ourselves and the Eastern Caribbean and Trinidad and Tobago - the Patrick Manning government - which was prepared to put US$100 million to help us in bringing back British American'," he said.

Gonsalves, who is also St Vincent's finance minister, said that the OECS would have contributed US$75m in the British American, and an investor out of North America US$30m to US$40m.

" ... I had outlined how that was going to work. But, the new government in Trinidad and Tobago, they took a while in telling us what they were doing, and on the 8th of December they tell us they are not participating in the new company," he said.

Gonsalves said the Persad-Bissessar administration announced that it wanted to work with the Caribbean Development Bank and OECS to "to build a fund" in CARICOM.

"But, at the moment, it is fairly amorphous; it isn't well shaped. So, the change in the government in Trinidad and Tobago has given us a big setback on British American," he said.

The passing of former Barbados prime minister David Thompson late last year also "downed the operation in relation to CLICO," he added.

Appeal for patience

Gonsalves, who appealed for the patience of Vincentians, said he was perusing a document received Wednesday, January 12 from technical people in the region on the possibilities for rescue.

"I say this: If we don't find a regional solution to British American, CARICOM is going to have a lot of problems, because people's money was taken and CL Financial was the parent company to British American," said Gonsalves.

"They bought a lot of real estate in places like Miami. They over-leveraged these assets; they took a lot of money from the OECS and put them in facilities in Trinidad investments," he said.

British American had tapped funds from its OECS subsidiaries to fund a methanol plant in Trinidad and to buy 6,000 acres of undeveloped lands in the US for US$600 million (EC$1.62 billion).

"Now, they can't have those facilities and investments and be selling them ... but we don't get any benefit," Gonsalves said.

"Now, that is going to cause a lot of problems and I don't have any smoke in my eyes about this. I am very unsentimental about this matter. I am just looking forward to the interest of the annuity holders and the policyholders, the people who put their money in British American, and then, of course, in CLICO," Gonsalves said.

He said Trinidad was still willing to collaborate on a solution but the "contours" of the plan "are not yet properly spelt out".

The Trinidad government has announced a bailout plan in that country, which would cap payouts to CLICO clients on short-term investments and mutual funds at TT$75,000 (US$12,500), but the issue appears heading for the courts after a group accused the Persad-Bissessar administration of ruining the lives of policyholders with the new measure.