Compliance of CL Financial Directors with the Integrity in Public Life Act – a correspondence

From: Afra Raymond [mailto:afraraymond@gmail.com]
Sent: Thursday, 20 March 2014 09:56 PM
To: Registrar, Integrity Commission
Subject: Fwd: Compliance of CL Financial Directors with the Integrity inPublic Life Act

Dear Mr. Farrell,

I am seeking an update from you on your progress in relation to this formal report made to the Integrity Commission on 10th September 2012.

Apart from a brief telephone conversation we had a few days after its submission, I have had neither acknowledgment or reply to this report.

I await your early reply.

Regards

Afra Raymond

http://www.afraraymond.wordpress.com

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On Fri, Mar 21, 2014 at 4:54 PM, Registrar, Integrity Commission <Registrar@integritycommission.org.tt> wrote:

Dear Mr Raymond

Our recollection in the office is that a response was sent to you and we are examining our records.

In any case, a response will be sent to you.

Registrar

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On Fri, Mar 21, 2014 Afra Raymond <afraraymond@gmail.com> wrote:

Hello Mr. Farrell,

I appreciate your early attention to my query.

Regards

Afra Raymond

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From: Afra Raymond <afraraymond@gmail.com>

Date: Thu, May 22, 2014 at 11:44 AM
Subject: Re: Compliance of CL Financial Directors with the Integrity in Public Life Act
To: “Registrar, Integrity Commission” <Registrar@integritycommission.org.tt>

 

Hello Mr. Farrell,

I wrote to you on 20th March 2014 seeking an update to my formal report of 10th September 2012 to the Integrity Commission on this matter. You replied the next day indicating that you thought that a reply had already been sent but that in any case a reply would be sent to me.

To date I have had no response to my formal complaint or the request for an update as to its status. In the interim, I have carefully examined the Commission’s 2012 and 2013 Annual Reports and found no mention of my complaint in the sections which provide an outline of the various investigations being undertaken. According to those Reports, the status of those investigations seem to fall into three categories – ‘Closed’ – denoting those matters which have been effectively dismissed, due to lack of evidence or irrelevance; ‘Completed’ – denoting those matters which have been investigated or ‘Continuing’ for those matters which are still under investigation. I am starting to wonder if my formal complaint has been relegated to some new, as yet undisclosed, category.

I am also going to point out that, according to the Integrity Commission’s Public Notice at pg 49 of the Sunday Express of 6th October 2013, the Integrity in Public Life Act applies to State Enterprises. At the fourth para of that Public Notice, which was intended to clarify published concerns as to the implications of the Appeal Court ruling in #30 of 2008, you state that State Enterprises are companies which are controlled by the State, so I would again invite your attention to the particulars of my original complaint in this matter. As you would appreciate from my published analysis, the position taken by the Commission in that Public Notice is one with which I strongly disagree, nonetheless, that position is the Integrity Commission’s formal statement on the matter.

For ease of reference, that Public Notice is here –
https://afraraymond.net/wp-content/uploads/2013/10/ic-response2013.pdf – since I was unable to locate it on the Commission’s website.

I am closing by pointing out that this is a matter of the gravest possible public concern, since CL Financial has been the recipient of over $25 Billion TTD in Public Money and its affairs remain shrouded in an intentional obscurity which does violence to the modern notions of Transparency, Accountability and Good Governance. That obscurity includes the channelling of those huge sums of Public Money via the Central Bank which is exempt from the Freedom of Information Act; new laws to approve the exemption of the Central Bank from any judicial review of its actions in this matter (that has now been ruled as unconstitutional by the High Court in #4383 of 2012, of course the State has appealed that, so the fight is on); the failure/refusal of CL Financial to publish audited accounts and the failure/refusal of CL Financial’s Directors to comply with the Integrity in Public Life Act.

That is the factual background against which I lodged my formal complaint. The delay and ambiguity with which the Integrity Commission appears to be treating my complaint on this most serious matter is sobering, to say the least.

I trust that you can give this matter your early attention, in the meantime, I will be publishing this as a record of these developments.

Afra Raymond

http://www.afraraymond.wordpress.com

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Registrar, Integrity Commission

May 22
to me

Dear Mr. Raymond

 

On behalf of Mr. Farrell I do apologize for  not responding to your query.   Please note that your query was not classified as a compliant so you would not find it in the complaints section of the 2012 or 2013  Annual Report.   With respect to  your query we have sought and obtained legal advice.  However the Commission is not properly constituted ( a Commissioner having resigned and not yet replaced by his Excellency the President) at this time and therefore cannot make decisions.  As soon as the Commission becomes properly constituted the matter will be placed before the Commission for a decision.

 

In the interim I would appreciate if you can provide us with a copy of the CL Financial Shareholders Agreement.

Yours respectfully

Lisa Phillips

Acting Registrar

Integrity Commission

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From: Afra Raymond [mailto:afraraymond@gmail.com]

Sent: Thursday, 22 May 2014 05:12 PM
To: Registrar, Integrity Commission
Subject: Re: Compliance of CL Financial Directors with the Integrity inPublicLife Act

Hello Ms. Phillips,

I thank you for your swift reply and trust that this matter can now receive proper attention.

The Ministry of Finance made a Press Release on 12th June 2009 -http://www.afraraymond.files.wordpress.com/2011/03/minoffin_pr_12jun2009.pdf – which I received prior to the actual Shareholders Agreement being released to me pursuant to my Freedom of Information request. As requested, the actual CL Financial Shareholders Agreement of 12th June 2009 is here – https://afraraymond.net/wp-content/uploads/2010/03/mou21.pdf – for your consideration.
I await your reply.

Afra Raymond

http://www.afraraymond.wordpress.com

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On Friday, May 23, 2014, Registrar, Integrity Commission <Registrar@integritycommission.org.tt> wrote:

Dear Mr. Raymond

Thanks for your understanding. However used the link provided but most of the pages of the Agreement are blank.

Regards

Lisa Phillips

Acting Registrar

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From: Afra Raymond [mailto:afraraymond@gmail.com]

Sent: Friday, 23 May 2014 09:06 AM
To: Registrar, Integrity Commission
Subject: Re: Compliance of CL Financial Directors with the Integrity in PublicLife Act

Hello Ms. Phillips,

The Shareholders’ Agreement is showing ok at my end, the scanned copy I was sent seemed a little faded, that was all.

The link I sent you yesterday was included in my original email of 10th September 2012, so it’s not clear whether that actually received proper attention.

I suppose that the Finance Ministry would provide a copy if you asked, seeing that they sent it to me.

Thank You

Afra Raymond

http://www.afraraymond.wordpress.com

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Registrar, Integrity Commission      May 23

to me

Mr. Raymond

Noted. Thanks

Lisa

 


The original complaint is here –


———- Forwarded message ———-
From: Afra Raymond <afraraymond@gmail.com>
Date: Mon, Sep 10, 2012 at 11:12 PM
Subject: Compliance of CL Financial Directors with the Integrity in Public Life Act
To: registrar@integritycommission.org.tt

To – Mr. Martin Farrell, Registrar of the Integrity Commission

Dear Sir,

The Integrity in Public Life Act requires that “Members of the Boards of all Statutory Bodies and State Enterprises including those bodies in which the State has a controlling interest” are required to file returns and declare interests with the Integrity Commission.

Clause 3.1. of the CL Financial Shareholders’ Agreement of 12th June 2009 – see https://afraraymond.net/wp-content/uploads/2010/03/mou21.pdf – specifies that the Board of Directors of CLF shall consist of seven Directors, four of which shall be nominated by the Government. The GORTT has a controlling interest and it is public knowledge that the GORTT has exercised those rights, amounting to strong influence evidencing control.

It seems clear that the directors of CL Financial Ltd are therefore persons who should file declarations, and therefore also the directors of subsidiaries under their influence and control, but having visited your offices earlier today to examine the Register of Interests it seems that these Directors have not been filing returns with you.

For your information, your staff confirmed to me today that none of these people have filed declarations or been required to file such for 2009, 2010 or 2011 –
Gerald Yet Ming (CLF’s current Chairman)
Hayden Charles (CLICO Director)
Ronald Harford (Republic Bank’s Chairman)
Dr Euric Bobb (former CLF Chairman)
Rampersad Motilal (Managing Director of Methanol Holdings Limited)

I am therefore requesting, in the public interest, your confirmation that Directors of CL Financial and the companies within its control are required to file declarations or your confirmation that those Directors are not required to file or such other informative response that will satisfy this complaint of apparent non-compliance.

I await your early reply.

Yours faithfully,

Afra Raymond
B.Sc. FRICS

http://www.afraraymond.com

The Elephant in the Room – part 2

Port of Spain
Port of Spain

The recent announcements as to the upcoming completion of the ‘Government Campus Plaza’ offices in POS and the relocation of significant State agencies to central Trinidad are charged with meaning for the office sector. The previous article on this topic examined the huge quantity of State-owned incomplete office buildings in greater Port-of-Spain, the impact of that on the incomplete private office projects and the role of the ongoing process of decentralisation.  For the purposes of this discussion, greater POS is the area bounded by the sea to the South, the WestShore Clinic to the West, the Queen’s Park Savannah to the North and the Lady Young Road to the East. This is going to be a closer look at those aspects, so that we might discern how this issue is going to be settled. There are interlocking issues which have created the Elephant in the Room –

  1. the incomplete State offices, which will impact on the private office rental market as they are completed;
  2. the existing offices leased by the State, which need to be re-examined;
  3. the trend towards decentralisation, with its own profound implications.

To understand the issue requires the reconciliation of these large, seemingly-conflicting, elements.  The first is of course, the ‘sunk capital’ in terms of the State-owned, incomplete office buildings in POS.  The second is the existing leases the State holds from landlords of office space in POS.  The third element is the ongoing programme to relocate significant Ministries and State Agencies out of POS, generally to Central Trinidad.   I am also of the view that we need to enquire into the progress of the ongoing decentralisation process.  The details we need are – Which Ministries/State Agencies are to be relocated from POS?  What are the preferred locations for these offices?  What progress has been made on those relocations?   Has land been purchased/leased?  Has State land been allocated? Has a building been identified?  If a new building is to be constructed, what progress has been made in terms of project scoping, design, tendering and construction?  When are these new non-POS State offices anticipated to be occupied? The key enquiries in this matter would be –

  • State Leases

    We need to know exactly what offices the State is leasing and that info would include – the Ministry or State Agency in occupation; the addresses of the buildings; the size of the office space and its facilities; the number of carparking spaces; the rent paid; the service charge paid; the parties; the extent of the lease/tenancy agreement (when did the lease start and for how long was it agreed).  Apart from the info being presented in that type of detail for each rental, the overall picture will be instructive, as it will show the amount of space occupied  and at what cost. That information will in turn disclose the average (mean) rent per square foot paid.  Without details on the present arrangements for State offices, we cannot properly judge the alternatives.

  • Empty Buildings

    Alexandra PlaceAn additional enquiry has to be raised on the particular instances where the State is paying a rent for property which remains unoccupied.  The same details listed above need to be sought in those cases, but in addition, we need to be told why those properties are still unused.  A great concern was raised recently on #One Alexandra, which concern was mostly justified in my opinion, but the fact is that it is not the only one.  The public needs to be told the full extent to which the State pays rent for unoccupied offices.

  • Re-location progress

    On 2 April 2014, Minister of Planning & Sustainable Development, Dr. Bhoe Tewarie, gave some details in the Senate on these relocations –

    • Ministry of Tertiary Education and Skills Training and some of its portfolio agencies are to be relocated to an ‘integrated administrative complex‘ 15-acre site north of the Divali Nagar on the eastern side of the Uriah Butler Highway. No size was given for the complex and construction was noted to have started in April 2014.
    • Ministry of Community Development is to be relocated to new offices at a 10-acre site near the Divali Nagar on the eastern side of the Uriah Butler Highway. No size or start-date was given for these offices.
    • Ministry of Food Production is considering relocating out of its long-established offices at St. Clair Circle, at the northern end of the Magnificent Seven strip, to either Chaguanas or Farm Road in Curepe.  That decision is pending.

    COSTATT2-595x340

    In the last week we have been told that the headquarters of COSTAATT, which is a part of UTT, is to be relocated from Melville Lane in POS to a location near the new Chaguanas Administrative Complex.   The main building occupied by COSTAATT is said to comprise 86,000sf, which is rented for $13.00psf – the total annual rent is $13.473M.  We were also told that COSTAATT’s POS operations require further rental space to the annual amount of $1.64M.  The new building is costing $168M inclusive of VAT, but no details were given as to its size or proposed completion date.  There are other relevant questions as to the convenience of the new location for students and faculty, but the fact that Chaguanas remains the fastest-expanding town in the country for the past 20 years is a part of that issue.

  • UDECOTT’s rollout

    governmentcampus
    Government Campus

    As per the previous article in this series, the State has built, but not completed, a total of 1,329,000sf of offices in POS.  According to Minister of Finance & the Economy, Larry Howai, on 5 May 2014 –  “Cabinet has approved a sum of approximately $1.5 billion to complete the Government Campus buildings in downtown Port-of-Spain,” said Howai. Once this is completed in the next 12 months I expect that the OSH problems being complained of at the BIR will be a thing of the past.”

    That Cabinet approval equates to $1,129 per sq ft, which seems high unless one considers that a significant part of that money is stated to be for remedial works and not strictly for fittings and finishes. The impending completion of those offices will be a sea-change in the fortunes of POS, since their occupation will force the landlords who were renting to the State to seek other tenants. In my estimation at least half the rented offices in the capital are occupied by the State, so that office market is largely driven by the public sector.

    I have heard many colleagues attempting to rationalise the coming change by reference to OSHA requirements which require more office space allocated to each worker and therefore those requirements would ease the impact of the impending new offices.  Another rationalisation I have heard is the one about how some landlords would be leaving their places locked-up so they will not actually be offering those on the market, so there will be no real effect and so on.

All of those are coping mechanisms for dealing with the reality of change on an epic scale.  This is the Manning Plan, in full effect.  To quote the CEO of leading private sector office developer, RGM, Gerard Darcy, in a May 2013 interview  – “…The Government Campus is still the 800-pound gorilla in the room because it is too large to ignore…”.  I expect a significant adjustment in office rent levels in POS in the medium term. The financial sector, especially those who have expanded their loan portfolios on the basis of the property boom, will need to take careful stock of the extent to which these rapidly-approaching changes imply severely impaired assets.

TSTT Inquiry

The Trinidad & Tobago Parliament is now conducting an Inquiry into TSTT and this article is an edited version of my submission to that Inquiry.

The Joint Select Committee’s (JSC) ‘Invitation for Written Submissions‘ was published on the TT Parliament website on Wednesday 23 April 2014, with the deadline for submissions set at 4:00 pm on Friday 2 May 2014. Only ten (10) days.

When one considers the far-reaching scope of the Inquiry as specified in its ten (10) objectives; the size and role of TSTT and the recent published reports as to the proposals for the State to relinquish a critical 2% of its share in TSTT, it is clear that these matters are of the utmost, long-term public importance. Placed in that context, the JSC decision to Inquire into these matters is commendable, but the time-frame is so short as to raise serious doubts as to the quantity and quality of submissions which could comply.

The deadline for submissions to this JSC Inquiry should be extended to allow a greater degree of public and stakeholder participation.

This submission is focused on the third of the Inquiry’s ten objectives –

  1. “ To determine the adequacy and effectiveness of the Company’s policies and procedures as it pertains to ensuring accountability, transparency and sound Corporate Governance in its operations and to determine whether these are being adhered to…“

It is my considered view that TSTT has engaged in a series of determined and long-range legal manoeuvres to place itself outside two of our Republic’s principal accountability and transparency laws. Those two laws are the Integrity in Public Life Act and the Freedom of Information Act.

The Integrity in Public Life Act

ictt-vs-tsttThe Integrity in Public Life Act established the Integrity Commission, which states its role to be “…to promote integrity, particularly among “persons in public life” – from the level of Ministers of Government and Members of Parliament to Permanent Secretaries, Chief Technical Officers and members of the Boards of Statutory Bodies and State Enterprises…

In 2005, the Integrity Commission applied to the High Court for an interpretation of its remit, the particular aspect of that matter which has a bearing on this Inquiry was specified at para 1. (2) of the Court’s ruling in that case –

“(2) What is the meaning of the expression ― “Members of the Boards of all Statutory Bodies and State Enterprises including those bodies in which the State has a controlling interest” in paragraph 9 of the Schedule to the Integrity in Public Life Act as amended?”

TSTT was granted leave to be heard on the application, according to paras 3 & 4 of that ruling.

In 2007, the High Court ruled, in relation to that aspect that the IPLA applied to Directors of State Enterprises and bodies in which the State had a controlling interest. The plain meaning of which was that TSTT’s Directors were required to comply with the provisions of the IPLA.

TSTT appealed that ruling, once again seeking to place its Directors outside the remit of the IPLA. That appeal was part of the deliberate, long-term series of legal actions by TSTT to challenge the stated intent of the Integrity Commission in relation to its Directors. The fact that the legal action proceeded that far is ample testimony to the support extended by the government (the Executive) to TSTT in this endeavour.

On 27 June 2013, the Appeal Court ruled that –

CONCLUSION

  1. TSTT is not a State Enterprise. The members of its Board are not subject to the Integrity Provisions.”

That ruling marked the successful completion of the TSTT campaign to remove itself from oversight by the Integrity Commission.

One could view these events as being the lawful exercise of various parties’ rights to seek the Courts’ interpretation of the law and the result as being the product of due deliberation.

That view is too limited, since the wider constitutional question is begged as to the true intent of Parliament in creating the IPLA. This situation represents nothing less than an open dismantling of the clear intentions of Parliament by the concerted actions of the Executive and its agents, together with the independent Integrity Commission.

On 6 October 2000, the Parliament passed the IPLA, but on 13 October 2000, the Parliament passed an amendment to the Schedule of the IPLA. The clear intention of the Parliament in approving that amendment was to include members of the Boards of State Enterprises and those bodies in which the State has a controlling interest.

The intended result of this TSTT litigation was to remove its Directors from Integrity Commission oversight and that was achieved. The intended will of the Parliament was effectively frustrated by these legal manouevres.

The Freedom of Information Act

The Freedom of Information Act 1999 is intended to give the public the right to obtain information about Public Authorities. The Freedom of Information Unit (within the Office of the Prime Minister) provides a list of Public Authorities which are subject to the provisions of the FoIA. TSTT is listed as the 145th on that list of 199 No. Public Authorities.

On 17 January 2006, Magdalene Samaroo filed suit against TSTT under the Freedom of Information Act to obtain publication of a copy of “…the letter from the Integrity Commission to the Directors of the Board of TSTT informing them that they are not required to give annual declarations…in accordance with the IPLA as amended…”.

The requested letter is itself astounding, given that it would appear to be a formal undertaking from the Integrity Commission intended to subvert the law requiring that Directors of State Enterprises submit declarations to the said Commission. As far as I know, the existence of that letter has never been officially denied.

On 19 July 2010, the High Court ruled that TSTT is a Public Authority (para 18) and further, that it was required to provide the requested documents (para 25).

TSTT filed an appeal against that ruling, which ended in a final hearing before the Appeal Court on 28 October 2013.

The appeal was compromised by consent, meaning that the parties agreed to end the litigation, so costs were not awarded by the Appeal Court. The Court, having accepted that the matter was at a close, went on to set aside the 2010 ruling by the late Justice Carlton Best. To cite the transcript of that final hearing

“…we can say that the appeal is compromised, we can set aside the decision of Justice Best and enter the Order that there be no Order to costs which does three things, or two things, at least: it meets your agreement; it removes the precedent that is creating some difficulty for you…” (emphasis mine)

The action of the Appeal Court in removing the difficult precedent facilitated TSTT in achieving its desired outcome of no transparency or accountability in relation to these issues.

Here again, we are witness to another determined effort by TSTT to seek the assistance of the Courts to frustrate the proper intentions of the Parliament.

I asked the Inquiry to recommend to Parliament that it –

  • Rectify the contradiction arising from the Appeal Court judgment in #30 of 2008 with respect to TSTT’s obligations under the IPLA. The Parliament must ensure that TSTT is formally and conclusively brought within Integrity Commission oversight, as is the case for all State Enterprises.
  • Ensure prompt publication of the Integrity Commission’s letters to the TSTT Directors exempting them from compliance with their obligations under the IPLA.
  • Ensure TSTT’s compliance with the provisions of the Freedom of Information Act, as lawfully required for all Public Authorities.

There is now the unacceptable contradiction of a JSC of our Parliament convening this Inquiry into TSTT’s operations, in the proper exercise of its supervisory responsibility for that State Enterprise, while the Appeal Court has ruled that TSTT is not a State Enterprise for the purposes of the IPLA. As I complete this column, TSTT officials are live on the Parliament channel giving evidence to this Inquiry on Friday 9 May.

To add to the brew, Cable & Wireless, the 49% shareholder in TSTT, is proposing that the State relinquish 2% of its shareholding into an arrangement which would effectively end State control of this important national asset.

How can we find out what is the true position of TSTT in our nation’s affairs if our lawful rights to accountability and transparency into its operations are being eroded in this fashion?

This unacceptable situation is a challenge to the Parliament to reassert its proper authority in this matter.

Submission to Joint Select Committee Inquiry into the administration and operations of TSTT

In response to an invitation for written submissions to the Joint Select Committee of Parliament on Ministries, Statutory Authorities and State Enterprises (Group 2) Inquiry into the administration and operations of the Telecommunications Services of Trinidad and Tobago, I delivered the following:

From: jscgroup2 <jscgroup2@ttparliament.org>
Date: Mon, May 5, 2014 at 9:32 AM
Subject: RE: Public Enquiry into TSTT
To: Afra Raymond <afraraymond@gmail.com>
Cc: Candice Skerrette <cskerrette@ttparliament.org>Dear Mr. Raymond,

On behalf of the Committee, I extend sincere gratitude for your response to the Committee’s request for submissions regarding its inquiry into the operations of TSTT. The Committee will consider your comments and if necessary, may seek to engage with you further.

In addition, the Committee is expected to convene a Public Hearing with officials of TSTT on Friday May 09, 2014 at 10:00am. This hearing will be aired LIVE on the Parliament Channel.

Best regards,

Julien Ogilvie
Secretary to the Committee

Parliament of the Republic of Trinidad & Tobago
G-7 Tower D, Port of Spain International Waterfront Centre
1A Wrightson Road, Port of Spain, Trinidad
PBX: +1 (868) 624-PARL(7275) Ext 2277 FAX: +1 (868) 625-4672 EMAIL: jogilvie@ttparliament.org

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G2G Policy

The current Government to Government (G2G) arrangements are a direct threat to our country’s fundamental interests.

The key element of the G2G arrangement is that a larger, more advanced, country will assist a smaller, less-advanced country by building or operating complex facilities which are beyond the reach of the smaller state.

One of the features the G2G arrangements have in common with the other large-scale projects is the high degree of secrecy with which the proposals are developed.  That secrecy raises doubts as to whether proper Needs Assessments are undertaken and as to the degree to which the views of citizens and stakeholders are sought, far less considered.  The fundamental issue as to the necessity for these projects is thus routinely sidelined, which is inimical to the public interest.

The main criticisms of the G2G arrangements are –

  • Sidelining of the elementary Tendering Process – the procurement process is effectively outsourced, since the more powerful country has the right to select the contractor;
  • Limited, if any, role for Local Participation in terms of labour, professionals, suppliers, or contractors;
  • Weak or nonexistent contract controls, due to the disparity in power between the parties;
  • Serious drain on Foreign Exchange;
  • Lack of the promised Transfer of Technology.

These arrangements have been heavily criticised in our country for almost 35 years, starting with Winston Riley’s October 1979 paper which identified many of the emerging problems.  As a result of that rising tide of criticism, an official enquiry was established by then PM, George Chambers.  In March 1982, the Ballah Report was published and the G2G programme was brought to a halt as a result of its dire findings.

Despite the learning, successive political administrations seem unable to resist the appeal of these G2G arrangements, so we have today’s situation as shown in the table.

Physical Development Projects via G2G – April 2014

Readers who access this article online can view the background info via the hyperlinks

COUNTRY PROJECT/S DATE AMOUNT COMMENTS
CHINA NAPA – North & South 2008
  • TT$818M as’final cost’
  • TT$207M for ‘remedial works’
NAPA (POS) completed in 2009, NAPA (San Fernando) completed in 2012stated final cost of both projects was $130M USD ($818M TTD). A further $207M was borrowed from EXIM Bank of China in 2011 for ‘remedial works‘ on NAPA (POS). Design & Build contractor was Shanghai Construction Group.
AUSTRIA San Fernando Teaching Hospital 2011 TT$739M Opened in January 2014
CANADA Penal Hospital 2012 Undisclosed Involvement with Canada’s nominated designer SNC-Lavalin was discontinued after serious concerns over that firm’s international banning for corrupt business practices.
CHINA
  1. Couva Children’s Hospital,
  2. three national sports facilities in Couva,
  3. three multi-sports facilities in other parts of the country.
2012 TT$1.8 Billion Loan Agreement signed in March 2013 with EXIM Bank of China, with Shanghai Construction Group selected as the contractor for all the projects.These projects include the swimming & cycling complex at Balmain and the sporting complex at Tacarigua Savannah in Orange Grove.
CHINA Lake Asphalt 2013 Undisclosed MoU, with a Confidentiality Agreement, signed on 30 May 2013 between Lake Asphalt T&T Ltd and a Chinese contractor. One of the official objectives of the February 2014 State visit to China, according to the Office of the PM, was “…Removal of asphalt from the Pitch Lake in greater capacities…”.
CHINA La Brea Port and seven industrial parks. 2014 US$750M (TT$4.83 Billion) Agreement signed in February 2014 to have these facilities built by China Harbour and China Construction.

The total cost of these projects is just under $8.4 Billion TTD.
That is the background, against which we must consider these further elements –

  • china-caricomRegional Strategy – As a leading nation within CARICOM, it is important for Trinidad & Tobago to give serious consideration to the role of the various bilateral G2G arrangements China is pursuing in our region and the implications of those arrangements on our aspirations for healthy regionalism.  I have been reading the February 2013 Research Note by UWI’s Dr. Annita Montoute – ‘Caribbean-China Economic Relations: what are the Implications?‘  The scope of Dr. Montoute’s research and her findings are sobering – at pg 115  “…CARICOM Trade with China is on the increase; however it is overwhelmingly in China’s favour…”.  The regional issue is a serious one to which we must address our energies.
  • Trinidad & Tobago’s Strategy – Now consider these statements by then Finance Minister, Winston Dookeran, at the September 2011 ceremony to sign the $207M TTD loan for NAPA (POS) ‘remedial works’ –

    “…Dookeran said it was now imperative that TT deepens its ties with China…’In the first instance China has now emerged as a very significant player, especially in light of the recent tremors and uncertainties in the world economy,’ he said. ‘China…is now an economy that we will have to rely upon. It is in that context that it is very appropriate and timely for Trinidad and Tobago to start to intensify its relationship with China.’..”

    Winston Dookeran is now Trinidad & Tobago’s Minister of Foreign Affairs.

  • The Uff Report – The 42nd and 43rd recommendations of the 2010 Uff Report deal directly with this  issue –
    1. The Government’s policy on the use of foreign contractors and consultants for public construction projects should be transparent and open to review.
    2. Local contractors and consultants who compete with foreign companies should be provided with the same or equivalent benefits as enjoyed by those foreign companies and should be protected from unfair competition through matters such as soft loans…

    Uff was calling for the establishment of a national policy on this series of issues and the JCC has been requesting a consultation between government and stakeholders, so that a proper strategy can be developed in open collaboration. That would include labour, professionals, the State, the contracting sector and all the associated elements such as suppliers of building materials, financiers, skills training and so on.  The JCC wrote to the PM on this in April 2012, but to date there has been no response to our calls for those consultations in the national interest.

  • NAPA, again – The Minister of Culture, Dr. Lincoln Douglas, told the Senate on 8 April 2014 of the serious issues arising at NAPA (POS), with an estimated further $100M being required for more repairs.  It is not certain if the issues of disrepair are all due to inadequate maintenance, but it is unacceptable for such issues to have emerged for a structure less than 5 years old.
  • Shanghai Construction Group – Despite the bad record at NAPA, the selected contractor for the $1.8 Billion Couva Children’s Hospital and the other sporting facilities is the said Shanghai Construction Group.
  • Proposed Public Procurement Law – most alarmingly, Clause 7 of the proposed Public Procurement & Disposal of Public Property Bill 2014 specifically excludes Government to Government Arrangements and projects funded by International Financial Institutions from oversight.  That proposed exclusion is entirely unacceptable as it further jeopardises our national interest.

The PM has made a call for a National Conversation and this is one topic which needs addressing. Our country cannot continue exporting our jobs, capital and skilled people in favour of unexamined and undisclosed foreign policies.

AUDIO: The Showdown Show Interview, i95.5FM – 6 April 2014

Afra Raymond is interviewed on the ‘Showdown‘ show on i95.5FM about the public procurement legislation recently laid in parliament. 6 April 2014. Audio courtesy i95.5FM

  • Programme Date: Sunday, 6th April 2014
  • Programme Length: 0:38:25 + 0:48:59

Part 1:
Part 2:


FAILURE to ACCOUNT

The main issue now arising in relation to the Beetham Water Recycling Project (BWRP) is the complete failure of our country’s system of Public Financial Management.

The $1.043 Billion BWRP was omitted from Trinidad & Tobago’s 2014 national budget.  By any standard that is an unpardonable failure to account for that mammoth sum of Public Money.  Although the national budget-making exercise is collective in nature, the ultimate responsibility for that function is held by the Minister of Finance & the Economy.  That Minister is Larry Howai, who is a Certified Management Accountant and was a career Banker, up until his appointment in June 2012.

The JCC have been long-time campaigners for Public Procurement Reform, together with our Kindred Associations – T&T Chamber of Commerce; T&T Manufacturers’ Association; T&T Transparency Institute; American Chamber of Commerce; Federation of Independent Trades Unions & NGOs and the Local Content Chamber.  In the preamble to our 2012 draft Bill we identified Public Procurement Reform as heralding the “stated intention to strengthen the quality of governance by promoting these principles of good governance by systemic re-engineering of the public financial management system. This Bill is thus one of a raft of relevant Bills for the re-engineering of the public financial management system.

Public Procurement Reform is therefore a fundamental part of the modernisation of our Public Financial Management system.  We need that system to map our pattern of income and expenditure in order to gather the basic information to allow us to plan how we are going to spend the future income.  Budgeting is a critical component of that system.

SIDEBAR: PNM’s Public Procurement Position

I was contacted last week by a senior PNM MP who shared with me certain of their ‘official stated positions’ on Public Procurement from 2009, in an attempt to rebut my assertion that there was no known PNM position on this critical issue.  In late 2006 PNM shelved the White Paper on Public Procurement and the accompanying draft Bill, which would have saved the country all of these ongoing losses of Public Money, so I remain unconvinced.  PNM left office after losing the May 2010 elections to the PP, so a 2009 position is not very persuasive.

The Private Sector/Civil Society group continues to extend its invitation to the Leader of the Opposition for dialogue on this critical issue of national development.

The government laid its long-awaited Public Procurement & Disposal of Public Property Bill in the Senate on Tuesday, 2 April, with a three-week period set for public comments before formal debate on that new law.  The fiasco of the BWRP being omitted from the 2014 budget is an inescapable example of both failure of Public Financial Management and questionable procurement process.

Our country must move out of this period of chronic waste and theft of Public Money.  It is important that we achieve that by a peaceful transition to adopt the advances used in other countries to control corruption in public transactions.

It is therefore necessary to closely examine this BWRP episode so that we can draw lessons for our collective progress.

The (*estimated) timeline is instructive –

  • February 2013* (reported in local media)– WASA obtains a $246M USD IDB loan for wastewater works, including this BWRP.  That loan is reported to be the largest granted by the IDB in the Western Hemisphere.  Exactly when and why that loan was rejected remains unclear. WASA is also collaborating with PUB-CPG Consultants of Singapore to provide technical support and services for the development of the Beetham Wastewater Treatment Plant Reuse Project. (p. 8)
  • June 2013* – NGC appointed CPG Consultants, to prepare the Request for Proposals (RFP).  [Hansard pp. 152] Given that the RFP was advertised on 2 September 2013, it seems reasonable to suggest that this appointment was in mid-2013.
  • 9 September 2013 – the budget statement is delivered by Minister of Finance & the Economy, Sen Larry Howai, with no mention of the Billion-Dollar BWRP, the RFP for which was published a mere seven days prior.  The 2014 budget contains statements relating to the adequacy of water supplies and the highlighting of five new waste-water treatment plants, as detailed in last week’s column.  Those statements are contrary to the rationale, given elsewhere of course, for BWRP.
  • 21 November 2013 – the Minister of the Environment & Water Resources, makes a formal statement detailing the expansion of Desalcott’s daily output from 32 million to 40 million gallons. [Additional link]
  • 10 March 2014 – BWRP contract was awarded to SIS Ltd and its subcontractors in the sum of $1.043 Billion. [Hansard pp. 150-161]
  • 14 March 2014 – WASA announces that Desalcott’s expansion programme is delayed and will take effect in April, instead of January as originally anticipated.

That timeline is worrying enough, but consider the other aspects.

It is worth repeating that the underlying commercial elements of the project remain undisclosed.  According to section 1.1 of the RFP issued by NGC

…NGC will be responsible for supplying Feedwater to the WRP at no cost to the Contractor. The Contractor will be responsible for the processing of the Feedwater into Product Water at the WRP and supplying the Product Water to NGC.

NGC will enter into a Water Sale Agreement (WSA) with WASA concerning the sale of the Product Water. WASA in turn will sell the Product Water to industrial companies at Point Lisas…

So, NGC will be supplying wastewater at no cost to BWRP, which seems to usurp WASA’s role.  WASA will then buy the recycled water (Product Water) from NGC, before selling that to industrial users at Point Lisas.

This raises questions as to the terms of those agreements and just who are the beneficiaries of this arrangement.  The answers will go to the very heart of this matter since the stated rationale for this entire exercise is the supposed inability of WASA to finance these works.  Will the new arrangements improve WASA’s financial position?  Are those critical figures also being deliberately suppressed?

All of which leads right back to the issue of the omission of BWRP from the 2014 national budget.  How and why did that happen?  No play on words here, but the Minister of Finance & the Economy needs to offer the public a clear accounting for this unacceptable position.

Are we witnessing a situation in which the entire Cabinet was aware of this huge BWRP and a deliberate, collective decision taken to omit that from our national budget?  Or are we seeing that a small group of high-level Public Officials were able to activate and implement a huge project out of the ‘line-of-sight’ of the Finance Minister.  Which is it?

One of the lessons from enquiries into the global financial collapse is the pernicious practice of ‘Regulatory Arbitrage‘, in which the players in the financial market were able to choose to which regulatory regime they would subject various products.  That practice allowed bad, ‘smartman’ practices to grow until the historic crisis exploded.  Those arose in some of the most advanced jusrisdictions due to the several financial market regulators in operation.  The same ‘smartman’ behaviour was evidently at the root of the CL Financial collapse here.  One of the important lessons from that global crisis, which our country seems to be adopting, is that the financial system is better regulated by a single entity.

The same solid lesson should also be fundamental in our efforts to develop an effective Public Procurement system for our country.  To my mind, this matter is also a notable example of ‘Procurement Arbitrage‘, in which major players in the State sector can choose to take less transparent paths to implement pet projects.  For whatever reason, this reminds me of TIDCO paving roads some years ago.  A little bit again and we might hear that NGC is undertaking road projects.

Clause 7 of the government’s Public Procurement & Disposal of Public Property Bill specifically excludes Government to Government Agreements and projects funded by International Financing Agencies from oversight by the new system.  That is an unacceptable exclusion since it would immediately place the greater part of State procurement outside of transparent and accountable oversight.  That exclusion will, in turn, spawn a fresh round of the detrimental ‘Procurement Arbitrage‘ identified in this BWRP issue.  The JCC is strongly objecting to that attempt at taking the path to obscurity.

The fact is, that as matters stand, we do not know what other ‘off-budget‘ projects are in play.  How can the public properly establish the extent of the State’s commitments?   This deplorable episode does little credit to the progressive notion of ‘Good Governance’ in our nation.

The Minister of Finance & the Economy must give a proper accounting for this glaring omission from the 2014 national budget and a clear set of details for the BWRP, to include the underlying commercial elements which are driving the entire arrangement.

CRYSTAL CLEAR

The title for this column is borrowed from the ongoing, expensive advertising campaign being mounted by WASA & NGC to promote the attributes of the Beetham Water Recycling Project. (Click thumbnails at right to magnify)

The Project is in two stages – to Design and Build a water recycling plant at Beetham and to Operate & Maintain that plant for a period of five years.  The recycled water is to be piped to Point Lisas for the cooling requirements of industrial customers, which we are told will ‘free-up’ about 10 million gallons per day of drinking water.  This Design & Build contract for $1.043 Billion was awarded to SIS Ltd and its sub-contractors on 10 March 2014.

Despite the attributes presented by this project, there are grounds for serious concern as to the process adopted and the actions of the various public officials involved.

The Leader of the Opposition, Dr. Keith Rowley, first raised this matter in the budget debate of September 2013, following that with a formal complaint, on 10 March 2014, to President Carmona.  In addition, Dr. Rowley’s Private Motion was to be debated in Parliament on Friday 28 March calling for the Prime Minister to stop the project and investigate the matter.

Having considered the available facts, the JCC issued a Press Release on 20 March 2014 calling for the project to be immediately halted. The JCC is also calling for an independent public investigation into this entire matter.

The JCC’s preliminary concerns are –

  1. The Budget?

    The project is not mentioned at all in the 2014 national budget.  It is not in the Budget Statement or any of the supplementary documents which record the figures for State Enterprises (such as NGC), Statutory Corporations (such as WASA) or the overall national accounts.That omission itself is grave enough to warrant a complete halt to this dubious operation, but that is not the worse of it.  Not at all.When one carefully considers the 2014 budget, two even more serious issues become apparent.

    1. The first is the timeline.  The NGC published the Request for Proposals (RFP) for this huge project on Monday 2 September 2013.  The 2014 budget statement was delivered by Minister of Finance & the Economy, Larry Howai, on 9 September 2013.
    2. The second is that the 2014 budget actually has a section dedicated to ‘Water Resources’ at pgs 31-32.  That section of the budget states that “In fact, Trinidad is making significant progress towards achieving water for all” and “Tobago is well within achieving water for all”.   Details of upcoming projects were also provided – “We are expanding and improving wastewater treatment, collection and disposal systems in Malabar, San Fernando, Maloney, Cunupia and Scarborough, Tobago.

    So, the Minister of Finance & the Economy assured the nation that we are well on the way to ‘Water for All‘, only one week after NGC published that RFP.  That sequence of events raise fundamental questions as to just what reliance we can place on our national budgeting process.  Reports which are silent on large-scale proposals are unreliable.  For our national budget to slide into that category of unreliable document is unacceptable.

    What is more, Minister Howai’s statement as to the nation’s water supply and WASA’s intended projects really give us cause for a pause.  If the Minister’s statements are reliable, why do we need this project?  If those statements cannot be relied upon, we are really at a sobering moment.

    The State Enterprises Investment Programme (SEIP) is an integral document in the national budget, which shows all capital infrastructure projects financed by State Enterprises and Statutory Authorities.  NGC’s projects are detailed at pgs 8-12 of the 2014 SEIP, but there is no mention of this Billion-dollar Water Recycling Project.

    The silence in the budget as to the Beetham Water Recycling Project is unacceptable.  It raises the direct question as to the reasons for the actions of these public officials.  It is unacceptable that a project of this size and consequence could be conceived and implemented as a ‘phantom project‘.  This is a mammoth ‘off-budget‘ expenditure to be funded by Public Money, via the NGC.

  2. The implementing Agency

    Apart from the ‘off-budget‘ issue, there is also the burning question as to the choice of the delivery agency.  WASA was reported to have obtained a $246M USD loan from the Inter-American Development Bank (IDB) in February 2013 for local wastewater management, to include this project.  No reason was advanced for the decision to resile from that course of action in favour of the current procedure.

    WASA is the Statutory Agency responsible for our country’s water supplies and sewerage, while NGC is the State-owned company established to manage the distribution and sale of our country’s natural gas. The JCC is questioning the reason for the participation of the NGC in this water treatment project. The Chairman of WASA, Indar Maharaj (who is also the CEO of NGC), stated that WASA did not have the money for the project as a way to explain how NGC came to procure these water treatment facilities.

    Sen. Larry Howai, Minister of Finance
    Sen. Larry Howai, Minister of Finance

    The role of the Minister of Finance & the Economy is crucial in this matter, as that Minister has the authority to secure funding from either the IDB loan or other State resources, such as NGC, to have the project implemented by WASA.

    The choice of NGC as the implementing agency for this Beetham Water Recycling Project is one which has serious implications in terms of oversight.  The implementation of this project by WASA would have required the involvement and supervision of the Central Tenders Board.  What is more, since the project would have been proceeding via a Statutory Authority, the tendering and appraisal procedure would have been open to challenge by means of a judicial review.

    As things stand, after the Appeal Court decision in NHIC v UDECOTT (#95 of 2005), NGC, as the State-owned Enterprise implementing this project, is shielded from judicial review in its commercial contracting operations, unless evidence of fraud or illegality can be produced.

  3. What are the Commercial fundamentals?

    Was a Needs Assessment carried out for this huge project? The 2014 budget detailed WASA’s significant pipeline renewal programme, which is expected to result in a significant reduction in the wastage of potable water. Desalcott is undergoing a 25% expansion in its output of potable water, from 32M gallons daily to 40M gallons, due for completion in April 2014.  So, just what is really the plan?

    The JCC is noting its grave concern that no Business Case seems to have been made for the advisability of this large-scale project on grounds of a value proposition.  The long-term, underlying contractual arrangements which are driving this project remain obscured.  Do these proposed arrangements improve or further diminish WASA’s financial standing?  Do they benefit NGC and to what extent? What is the financial impact of these proposals on our country’s fortunes?

    Despite the strong protests from the PNM on this matter, the JCC notes that the Opposition’s position on Public Procurement reform is unknown. The continued efforts by our Private Sector/Civil Society group to engage the PNM in dialogue on this question have been fruitless.

The lawful circumvention of our country’s oversight provisions in this matter is glaring.  This situation amounts to a deliberate choice by public officials to take the path to obscurity, with diminished transparency in the execution of this huge project.

As I wrote in June 2008, criticising the previous administration’s mega-projects via UDECOTT – “Either the Cabinet or its advisers are responsible. We are either dealing with a lack of rectitude at the highest level of our republic or a sobering naïveté.

Sad to say, that much is ‘Crystal Clear‘.

Guarding the Guards

Our country continues its perpetual grappling with the question of conduct in public office, but at this time we are faced with particular threats and opportunities in respect of the Public Interest.

Before getting to the present particulars, some critical facts and concepts must be stated. Trinidad & Tobago is a leading nation in the Caribbean region, so progress made here will be to the wider benefit of the region. That said, the particular shape of our economy is such that the State is easily the dominant player in the country’s commercial affairs. Given that reality, the question of illegal or improper conduct by the State and its Agencies, goes far beyond principled assertions. The State must be exemplary in its conduct, not just because that is a principled position, but because its regular misconduct and illegality will continue to distort the behaviour of non-State players.comics-elephantthere-big

The size and wealth of the State makes its control and oversight a continuing and seemingly-insurmountable task. Like the old proverb – ”…Where does an Elephant sit? Wherever it wants to…” It is essential that the State be subject to ongoing and timely oversight, so as to preserve the society’s stability and progressive development.

The State’s power emanates from its unique legal powers and the fact that it has more money than any other element of the society.

These two streams of power work together in a special relationship to which we must be most alert. We rely on the State to seek our collective interests, so we have a special duty to be most vigilant as to its operations.

That is the background against which the current threats and challenges must be viewed.

The main element driving the episodes of State misconduct and illegality is the ability to transact in Public Money, which is money due to or payable by the State, to include any money for which the State will be ultimately liable in the event of a default. Public Officials transact in Public Money, on our behalf. Those Officials are defined in the Schedule to the Integrity in Public Life Act (IPLA) – that list includes politicians, Permanent Secretaries and Board members of State Enterprises, Statutory Bodies performing a public function and bodies in which the State has a controlling interest.

Public Money must be managed to a higher standard of accountability and transparency than Private Money, because it is raised by coercion (taxation) and mostly spent in a manner which does not allow for real competition. Residents and companies are therefore obliged to pay taxes and consume public services with no real choice, hence our entitlement to that higher standard of accountability from the State in the delivery of public services.

Our country’s Integrity Framework is outlined in the sidebar.

SIDEBAR: The Integrity Framework

Our Republic’s Public Bodies and their officials act on our collective behalf, so it is fundamental that those operations are under the oversight of a series of legal requirements to ensure their proper functioning. I have called that series of arrangements and legal requirements, The Integrity Framework.

Our country’s Integrity Framework comprises these basic elements –

  • The Integrity Commission (IC), which is responsible for monitoring the integrity of Public Officials;
  • The Freedom of Information Act (FoIA), which gives the right to obtain unpublished information;
  • The Auditor General, the Independent body monitoring the financial reporting of Public Bodies;
  • The Investments Division of the Ministry of Finance, monitoring the operations of State Enterprises;
  • The two Parliamentary Accounts Enterprises Committees, providing Parliamentary oversight of Public Bodies
  • The Judiciary – The courts exercise a supervisory jurisdiction over the rest of the society to ensure that illegal acts do not prevail.

Obviously, those bodies which are part of the Integrity Framework are performing important public functions, so it is ironic that those bodies are not always accountable in the same way that the others are. For instance, the members of the Integrity Commission do not have to declare their assets, income & liabilities as do other Public Officials. Also, as a result of a 2007 High Court ruling the Judiciary do not have to provide declarations to the Integrity Commission.

The triple threat we face at this time is –

  1. The NHIC 2006 case – This is a disturbing Appeal Court ruling that UDECOTT, which is a State-owned company registered under the Companies Act 1995, in executing a large-scale project on State lands with State funds is not under the higher level of supervision which obtains in Public Law. UDECOTT was therefore able to proceed with that public project without the offended tenderer having the opportunity to obtain a Judicial Review of its actions in assessing those tenders. Of course, courts and boards have procedures to allow the recording of dissenting views in cases where unanimity is not achieved, but what is truly remarkable about this matter is that the dissenting judgment came from the then Chief Justice, Sat Sharma JA. This is an obvious loophole in that the ruling allows State Enterprises to function without the necessary high level of judicial supervision. That ruling attracted adverse comment from the late Karl Hudson-Phillips QC in 2008 and the 2010 Uff Report at its 55th recommendation “…There should be a review of the decision in NH International (Caribbean) v UDeCOTT and measures, if necessary legislative, put in place to ensure that bodies making decisions involving public money are open to challenge by Judicial Review…”. Despite the several promises, the Uff Report recommendations remain unimplemented, for whatever reason.
  2. TSTT’s exemption from the IPLAThe Appeal Court ruled in 2013 that TSTT was not a State Enterprise, with its Directors therefore exempted from the obligation to file declarations with the Integrity Commission. Quite apart from the damaging decision which appeared to exempt all Directors of State Enterprises, which I have covered extensively in this space, the Appeal Court made the ruling that indirect control of a State Enterprise amounted to an effective avenue for exemption. The fact that a State Enterprise is held via a holding company, such as National Enterprises Limited (NEL) was held to be good grounds for that exemption. This limb of that Appeal Court ruling jeopardises the public interest, since virtually all the profitable State Enterprises are held in NEL.
  3. TSTT exemption from the Freedom of Information Act – In 2010, the High Court ruled that TSTT was a ‘Public Authority’ and therefore subject to the FoIA. In 2013, the Appeal Court, in its final hearing on that matter – having agreed that the matter was compromised, since the parties were no longer proceeding – set aside the 2010 High Court ruling. The effect of that, it seems to me, is to further innoculate TSTT from public scrutiny.

All three of these positions effectively undermine the country’s Integrity Framework and all three are endorsed by our Appeal Court. The three, taken together, taste terrible.

The impending and long-awaited Public Procurement & Disposal of Public Property Bill, the continuing convulsions at the Integrity Commission and the deep hostility to the truth at the highest levels of our country’s rulers are the main elements which require our utmost vigilance at this time.

The Public needs to be on alert to the detrimental effect of these rulings. The Judiciary is now challenged to act in the Public Interest in these testing times.

The thing must not only be done, it must be seen to be done.