Property Matters – Cycle of Consequences

This article will delve deeper into the State Enterprise sector and its role as an agent of government policy with huge transactions in Public Money. I will do so by continuing my focus on the State-owned hotels and their performance, drawn from the official record.

The poor quality of investment decisions with our limited Public Money has left us saddled with projects no private investor would have contemplated beyond an initial appraisal stage. Public Money ought to be managed to and accounted for to higher standards than those applicable to Private Money. That standard learning appears to have evaporated in our country.

ppp

The Public Private Partnerships (PPPs) in relation to our State-owned hotels are evidently beneficial to the hoteliers but of limited, if any, benefit to the Public as shareholders. PPPs here in T&T are ones in which we have privatised the profits and nationalised the losses. That is what happened at Tobago Hilton and, in significant respects, at Carlton Savannah – as detailed in ‘Carlton Savannah Swirl‘ published in this space on 15 February 2015. What is more, some of the leading beneficiaries of those arrangements, such as Arthur Lok Jack, can declare – “Government has to get the hell out of private sector business.”. Continue reading “Property Matters – Cycle of Consequences”

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Property Matters – The Curepe Interchange

 

“…There is a temptation to let the lying dogs sleep…”
Sikka, Premm. “HMRC is in thrall to big business. It can no longer do its job.” The Guardian. 8 September 2016

“The Upholder is worse than the Thief”
—from the defunct Trinidad & Tobago value system, decades ago…

The reported statements of the PM and Minister Sinanan on this cost reduction of about $300M achieved for the Curepe Interchange project and the alleged role of corrupt engineers in that process are ones I welcome. Any savings of scarce Public Money are to be welcomed, whatever the political administration. That said, those recent statements are necessary but not sufficient.

These points are here to set the table –
Continue reading “Property Matters – The Curepe Interchange”

Property Matters – Checking-out State-owned hotels

Property Matters – Checking-out State-owned hotels

In the previous article, I dismantled the false narrative as to the satisfactory ‘Underlying Commercial Arrangements‘ for our State-owned hotels. To do so, I used the official records of the Parliament and its Joint Select Committees. Those records actually tell this sorry story, but it is possible to rely upon the sheer mass of material to effectively mask reality.

The defenders of these rotten arrangements are unable to rebut the official record, so some have now taken to claiming that the accounts do exist and that I should admit my errors. Well I tell you.

In between the political loyalists who have a unique way with facts and the very shortage of those facts, one needs to establish certain cardinal points if we are to make sense of all this Carefully Crafted Confusion.

So here are my cardinal points to understand this puzzle –

  • Capital Expenditure is all ours – every cent is our Public Money;
  • Repairs and Maintenance – Ditto;
  • Returns to Private Sector – These are obviously at or above target rates, since both Hilton and Hyatt have persisted in their POS operations. If the returns were below target, those operators would have exited, which is what Hilton International did in Tobago in 2008;
  • Returns to Public Sector – Unknown – since there is no commitment to accountability or transparency, despite the periodic claims to the contrary from various high-ranking officials;
  • Private Sector Audited Accounts – We can be sure that those exist at the Private Sector level and are made available in a timely manner to the shareholders and stakeholders of those companies. No Chief in that arena could survive a failure to produce audited accounts in the required manner – that would be grounds for instant dismissal, for cause and without compensation. Of course there is no way a Private Sector Chief could ever refuse to provide those records to its shareholders and stakeholders;
  • Public Sector Audited Accounts – These are never available, for whatever reason. The Public Sector Chiefs routinely fail to produce these records and even when formal requests are made via the Freedom of Information Act, those are refused. No Chief in that Public Sector arena has ever been removed or disciplined for their flagrant failure/refusal to account;

Continue reading “Property Matters – Checking-out State-owned hotels”

Property Matters – Hotel Reservations

The concerted attempts to sell the Tobago Sandals project were driven by high-level Public Officials who repeatedly assured the public that the existing arrangements for the three State-owned hotels were working satisfactorily. So much so that we should be pleased that the existing arrangements were to be adopted for the new project. The two main promoters were PM, Dr Keith Rowley and the Minister in the Office of the PM, Stuart Young.

Of course, we now know, due to the unplanned publication of that Tobago Sandals MoU, what were the terms and conditions on which the State intended to engage that project. No other hotelier had ever had a deal like that.

But there is a deeper series of official conversations on these existing State-owned hotels which need to be spotlighted so that a better view can be had as to ‘Who is Who and What is What’.

I am relying on the official records in this one, with my sparing commentary shown below – Continue reading “Property Matters – Hotel Reservations”

Property Matters – Tobago Sandals MoU-MoU

moumou

—from Lise Winer’s ‘Dictionary of the English/Creole of Trinidad & Tobago’ (p. 619)

‘The Truth eats Lies’

—from Marlon James’ latest epic ‘Black Leopard, Red Wolf


The previous article stated that over $5.0 Billion of Public Money was spent in the first 6 months of 2009 during the CL Financial bailout, under that MoU. Yes, that is the same type of document which we were so loudly being told is not binding and can be completely renegotiated, in relation to Tobago Sandals.

The publication of the Tobago Sandals MoU at the end of November 2018, forced by my litigation, set those misleaders to try diverting concerns by claiming it was all open for discussion. Of course it is possible to renegotiate any contract, or MoU for that matter, but that is trite and explains nothing. Probably intentionally so, really.

The limits of renegotiation are rooted in the bargaining strength of the parties. Which means that the party with stronger leverage can in fact call for renegotiation and likely obtain improved terms. The weaker party will almost inevitably agree to renegotiation, in the course of which serious concessions will be obtained by the stronger party.

The recent episodes of Sandals shutdown/withdrawals in both Antigua and Barbuda and the Turks and Caicos Islands are crucial in understanding this ‘Carefully Crafted Confusion’. In both those cases, Sandals spent the capital to build the resort, but yet were still able to shutdown to seek further concessions. In the Tobago case, Sandals was investing no capital. Even in what I am now calling the Lok Jack Gambit (which I will get to in the next part) no Sandals capital was at risk. The point being that if Sandals was intended to have no capital at risk in Tobago, T&T would have been in a far weaker negotiating position than any of the other Caribbean countries. That is the precipice we were facing, the deep peril which our misleaders are trying to normalise. Continue reading “Property Matters – Tobago Sandals MoU-MoU”

CL Financial bailout – Marking Time

On Friday 30th January 2009, the CL Financial (CLF) bailout started, so today – 30th January 2019 – is the ten-year anniversary of that fateful decision to commit Public Money to bailout the Caribbean’s largest conglomerate. The companies which were to be bailed-out were: CL Financial Ltd (CLF); Colonial Life Insurance Company Ltd (CLICO); Caribbean Money Market Brokers Ltd (CMMB); Clico Investment Bank (CIB) and British American Insurance Company (Trinidad) Ltd (BAICO).

clf-bailout

The mismanagement of this bailout has exceeded any mismanagement which led to the collapse of CLF, that is my view.

karen-dupreyThe bailout proceeded between 30th January 2009 and 12th June 2009, with over $5.0 Billion in Public Money paid to CLF in that period, under the terms of the Memorandum of Understanding (MoU) signed between then Finance Minister, Karen Nunez-Tesheira, and Lawrence Duprey, then CLF’s Executive Chairman. That MoU governed the expenditure of this vast sum of Public Money before the 12th June signing of the CLF Shareholders’ Agreement. All of which calls into question the continued claims, in relation to the Tobago Sandals project, that MoU’s are non-binding. As we say here, is according.

There has been an incredible escalation in the cost of this bailout, from the initial estimate of $5.0 Billion, to the present expenditure exceeding $25.0 Billion. This has been a source of serious concern as priority was given to pay the claims of the CLF creditors over other urgent, public needs.

The key areas of concern are set out here – Continue reading “CL Financial bailout – Marking Time”