Property Matters – Horses for Courses

horses for coursesAfter the imbroglio with NIDCO’s award last month of a $400M contract to KALLCO for a 5Km stretch of highway, we have once again been treated to a series of related high-profile announcements.

On Monday, 16 October 2017, Minister of Legal Affairs, Stuart Young MP, announced the counter-suit by State-owned Estate Management & Business Development Co (EMBD) against five contractors; former Minister of Housing and Urban Development, Dr Roodal Moonilal MP; and its former CEO, Gary Parmassar. The five contractors were:

  1. TN Ramnauth;
  2. Mootilal Ramhit and Sons;
  3. Namalco Construction Services Ltd;
  4. Fides Ltd; and
  5. Kallco.

According to Young, there was over 18 months of investigative work to ground those counter-claims which allege collusion and bid-rigging, resulting in over $200M defrauded from the State. The most decisive allegation seems to have been that then-Minister Moonilal was making the decisions on those contract awards. I have not yet been able to read the EMBD’s court filing.

I entirely support this legal action to recover any Public Monies which may have been fraudulently obtained in these cases. The only way this serial misconduct in public affairs will be tempered is when there are serious consequences. That is the theme of this week’s column. As I have said before, in relation to the CL Financial fiasco, the absence of consequence is inimical to any development, either at a personal or the national level.

But beyond the details of this litigation, three significant aspects of this matter must be highlighted –

  1. Cabinet decision?

    Roodal Moonilal
    Dr.  Roodal Moonilal, former Minister of Housing and Environment

    One of the central features in this case is the allegation that then-Minister Moonilal was deciding on large-scale contract awards, which is no different from existing practice, or previous practice for that matter. I am not trying to defend Moonilal at all, since that decision-making by Cabinet as to contract awards by State Enterprises is not supported by law or official guidelines. Any good process which might exist in a State Enterprise is negated by the fact that the final decision is made in a secret, unaccountable chamber.The most glaring lacuna in this series of connected stories is the issue of whether in fact the Cabinet is approving the recommendations of the State Enterprise or is the Cabinet making different decisions which deviate from the advice submitted. You see?

    When it is implemented, the Public Procurement and Disposal of Public Property Act ought to eliminate that bad practice.

  2. Bid-Rigging?

    Echoes of Uff

    If we refuse to learn from the errors of history we are doomed to repeat them.

    The 2010 Uff Report made 91 beneficial recommendations which would have brought sorely-needed improvements in the transparency, accountability and good governance of the Public Sector Construction Industry.

    Only one of those recommendations, the 56th, would have required any parliamentary support, since that is the one which passes the new Public Procurement law. The other 90 only required political will. You see?

    Has anyone ever said why the Uff Report recommendations have not been implemented? Are those going to be implemented? If so, when?

    We failed and/or refused to publish or implement the Bernard Report into the Piarco Airport project, so we land-up with the Calder Hart/UDECOTT fiasco. Next, we discard that Uff learning and once again are surprised, existing in a State of Perpetual Innocence.

    Note – Stuart Young was a member of the legal team, led by Andrew Goddard QC, which defended UDECOTT at the Uff Enquiry.

    Another unique aspect of this case is that bid-rigging has been identified by a legal action, so these are rare issues to be ventilated. The cheapest, most effective antidote to this type of crooked collaboration is for the tender documents, prices, Tender Reports, awards and contracts must be published. That is what implementation of the 39th recommendation of the Uff Report would require. But our rulers lack the political will, for whatever reason. S.13 (1) of the new Public Procurement & Disposal of Public Property Act requires that a database be established with all those details.

  3. The NIDCO process

    EMBD’s counter-suit

    embd logo
    Apart from the general principle stated above, there are three especially welcome aspects of this case –

    1. Speed – Given that the contracts were awarded in August 2015, this is swift action in a case of large-scale alleged fraud;
    2. The Virtual World – For the first time that I am aware, there appears to have been extensive use of electronic intercepts or other records of exchanges within the virtual world. The new information era of Edward Snowden, Julian Assange and Chelsea Manning (formerly known as Bradley) has laid bare the extent to which the State can intercept our communications. Given the ease of interception and the virtual dominance of electronic communications in today’s business world, it will be fascinating to see the weight the Courts give to that evidence;
    3. Civil Case – Unlike the 19-year old Piarco Airport case, which is still at the Preliminary Inquiry stage, the State has opted to pursue these claims under the streamlined procedures within the Civil Court. Those procedures do not offer the same scope for wanton delay as the criminal ones, in addition to which both sides will want to proceed, so I do not expect much delay here.

    The juxtaposition between this EMBD counter-suit and NIDCO’s $400M award to KALLCO, after Cabinet approval in September 2017, is intriguing to say the least.

    So, Minister Young tells us that the EMBD case has been in the works, so to speak, for over 18 months. At the same time, KALLCO is awarded a large contract by NIDCO within this period of intense investigation and so on. What is more, the Chairman of the Private Sector Civil Society Group on Public Procurement states that NIDCO’s pre-qualification process is a rigorous one.

    What can one make of all this? Is it simply a case of excessive silos in which the team preparing the huge counter-claim operated in such secrecy that other large contracts are still being awarded to those being investigated? Or is there another explanation?

    One of the best features of the Public Procurement & Disposal of Public Property Act is that it allows for cross-disbarment of contractors or suppliers who are found to have broken the law in one transaction. This would be an extremely powerful weapon in the hands of a determined Regulator.

© 2017, Afra Raymond. All Rights Reserved.

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5 thoughts on “Property Matters – Horses for Courses

  1. I have two questions,all else is commentary:

    Civil vs Criminal offences what are the loopholes advantages/disadvantages of this choice of pursuit on the part the government?

    The use of Hard Core Virtual Evidence at the risk of Invasion of Privacy, do our laws support this? Is there room for a counter claim?

    Cabinet’s Decision
    So to your question on Cabinet’s decision and whether or not Cabinet is approving the recommendations of the State Enterprise or making different decisions which deviate from the advice submitted-I believe the latter! If by chance the former is true,it is often influenced by the latter.Isn’t that why every government sets up a new state board-for POWER,PERKS AND PRESUMPTIONS?
    It is sad and equally calculated to think that we have“The Public Procurement and Disposal of Public Property Act “to address this situation and it is not implemented.-#conspiracytheory
    1 000 000-The plot thickens!
    What is politics without power,perks and presumptions Mr. Raymond? When ministers enter the political arena are they even properly prepped for the role or are files automatically thrown at them immediately after winning the elections, in the hope that they would read,understand and execute their roles effectively and efficiently? Much to our dismay and wasted revenues,there have been one too many instances of alleged fraud and misconduct amongst our future political pensioners and though ignorance is no excuse,I can’t help but wonder whether or not they are properly schooled on the “political pitch’?Or are they left to presume and preside with nepotism,cronyism and greed?To add insult to injury,are these alleged treasury transgressors going to one day become recipients of exorbitant state ministerial pensions for intentional defective services?My goodness? No wonder crime is prime in T&T-it pays well!

    UFF/Procurement/Nidco
    Publicity might be key Mr, Raymond but even as the UFF report recommends publishing key procurement inputs ,how are we to eliminate the human error of omission and the deliberate use of incorrect information ?
    I see the application of this recommendation taking the form of one common shared website, where information on contractors,contracts,work in progress,scope of work,timeframe, cost and ratings/rankings/appraisals of work done are featured.This should be accessible not just to the various Government Ministries and State Enterprises ,but to the citizenry.This site would also have the potential to eliminate the long standing problem of silos amongst ministries and some aspect of interdepartmental laziness within State Enterprises

    Lingerings
    Wow!I must applaud the work of Mr. Young,as a member of that legal team which defended UDECOTT and though I despise the contradiction,I do look forward to sheer excellence from him on the political team.The thought of how, or maybe why, key lawyers who professionally affiliate with key culprits, happen to hold key positions in politics in Trinidad and Tobago, will continue to linger. re:Duprey and Choppin!

    1. Hi Camille and thanks for joining-in…
      The Civil route is faster, but there is no prospect of imprisoning anyone and of course there is the peril that the accused parties could claim double-jeopardy to avoid criminal prosecution…

      As I said, S 13(1) of the new Public Procurement and Disposal of Public Property Act requires that a database be established and that will be open-access….

  2. Question: Who evaluated the bids for ferry service which closed on September 20?
    It was curious that the PM was in Tobago announcing Government was going to decide who would be in the Evaluation Team and promised more Tobago presence.
    The PATT is a statutory organization with a Board. Isn’t the Board to decide the Evaluation Team?
    After the tender closed, NO Evaluation Team was known or in existence.
    So, who evaluated those bids??

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