This Season of Reflection closes with yet another Sankofa Moment in which I will contemplate our past efforts so as to better understand our future. This huge project is being promoted, at the highest levels, by highly-optimistic and quite ambiguous statements.
The entire effort is based on notions of government having nothing to hide and the huge benefits to be derived from this project, albeit on rickety estimates. My colleagues and I have been engaged in a research program on these very issues for the last year. Our preliminary results pose a serious challenge to the notion of there being nothing to hide. In my view nothing could be further from the truth, that is how serious this is.
The three largest hotels in our country are State-owned – Trinidad Hilton & Conference Centre; Hyatt Regency and Magdalena Grand – with the hotels operated via Management Agreements. Our formal attempts to obtain information were met with a type of evasion and unresponsibility which was staggering. It reminded me of the infamous ‘Code of Silence‘ which belies the CL Financial bailout fiasco. No room for surprise there, after all, ours is a small country. As one of my confidantes often quips – It is like an Eleventh Commandment – ‘Thou shalt not be found out!‘
Our research program set out to obtain the details of those Management Agreements and the actual performance of those agreements. This was an attempt to get an understanding of the decisive ‘Underlying Commercial Arrangements‘ which exist at those State-owned hotels.
I do not think there has ever been a sustained discussion of those arrangements in our public space. So much so that when there is a Joint Select Committee examination of these companies, the focus is usually based on capital costs, over-runs and so on. That is complete unresponsibility by those public officials, let me explain. The Hyatt Regency cost about $630M in capital terms to design, build, fit and furnish – the initial cost of $516M and its recent refurbishment at $122M. I have been told informally that the revenue from that hotel for 2016 could readily exceed $600M. (UDeCOTT stated on its website that, “revenue from the successful operation of this hotel experienced a significant level of growth from TT$168 million in 2008 to TT$282 million in 2013, a 67% increase as at December 31, 2013.”) Penny-wise and pound-foolish, as we continue to examine the small change.
The details of the research are beyond the scope of this article, so I will just outline our queries and responses.
These are the Public Authorities to which we issued Requests under the Freedom of Information Act –
ETeck is the State Enterprise with responsibility for both Trinidad Hilton & Conference Centre and Magdalena Grand, its line Ministry is Trade & Industry.
Our key requests were for –
- Copies of all Management Agreements and Contracts for the operation of those hotels;
- How are the repairing and maintenance expenses/obligations shared between the parties to these agreements?;
- What are the provisions for repair reserves and how have those been observed?;
- What are the actual amounts spent on repairs and maintenance and by which parties?;
- What are the provisions in relation to training and employment of staff, including supervisory and management level? What have been the recorded outcomes of those provisions?;
- Have these Management Agreements/Contracts been subject to financial audits or any other formal management review process?;
- What are the revenues of the hotels? What are the provisions for sharing of those revenues?;
- What is the actual share of revenue paid to the parties to the agreements for these hotels?;
- Apart from the initial costs of design, construction, fitting and furnishing, what additional costs has the State had to bear during the operation of these hotels?;
- What Tax or Duty concessions or exemptions were granted and/or are being proposed for these hotels?;
ETeck’s initial response was to claim a blanket exemption amounting to an inability to answer any of those questions due to commercial confidentiality. We challenged that and it then emerged that the Trinidad Hilton management agreement is registered as a deed with the Registrar General’s Dept, so we were being denied a registered document. So deep is the impulse to deny publication of basic details that the files were not even checked, so bad!
Apart from the original procurement and the employment/training provisions (not outcomes), we were denied the other requested information. This issue is set to be challenged at another level.
UDeCOTT is the State Enterprise with responsibility for Hyatt Regency, its line Ministry is Housing & Urban Development.
Our key requests to UDeCOTT were for the same details.
UDeCOTT’s response took matters to a new level entirely. Their first response was to claim that the agreements and details we were seeking were commercially confidential, so as to deny our requests. We made a strong challenge to that initial position only to be told that the agreements we had been denied in their previous letter were ones they were now unable to define. We were now told that these agreements were not in their possession and we were asked to define these. I tell you.
We have continued to engage UDeCOTT intensely on these matters.
Board of Inland Revenue
We requested that the BIR inform us whether all the required taxes had been paid by these hotels; whether any investigation or enquiry had been made into their taxes; whether any penalty and/or interest had been demanded or paid by these hotels. We made it clear that we were not seeking details of amounts of money. Those requests were denied and are being pursued intensely.
Ministry of Finance as Corporation Sole
The Ministry of Finance & The Economy gave prompt, clear confirmation that no audits or management reviews were conducted for the various hotels held by the State via Corporation Sole and its agencies.
This is the face of the Code of Silence within which our public assets are traded and bargained, out of sight and often, out of mind. Forget the political ‘gambage‘, we are witness to actions which speak to a series of large-scale arrangements which are based on utter secrecy.
Reality Check time –
Expenditure of Public Money Minus Transparency Minus Accountability Equals CORRUPTION
Next week I will turn to the general accountability aspects and the issue of the tax concessions on this project.
©2017, Afra Raymond. All Rights Reserved.