Category: Public Procurement Reform

Calcutta Settlement review

The simple, inescapable fact is that the State could have lawfully acquired the ‘Eden Gardens’ property for less than $40M.  The HDC paid $175M in November 2012 to Point Lisas Park Ltd (PLP) for that property, which is the reason I am calling this an improper use of Public Money.

Despite having available the advice of the Commissioner of State Lands, the Commissioner of Valuations and various attorneys at HDC and so on, the Cabinet approved this transaction.  This Cabinet, with two Senior Counsel at its head and several other seasoned legal advisers, appears to have been unaware of, or intentionally ignoring, the legal safeguards.

Some readers may be surprised at those assertions, so here are my reasons for making such.

The last two articles examined the steps leading to the HDC’s purchase of land at ‘Eden Gardens’ in Calcutta Settlement.  In my opinion that transaction, as well as the one which preceded it, are both highly improper and very probably unlawful.  The HDC purchase must be reversed and the responsible parties investigated/prosecuted as required by our laws.

This ‘Eden Gardens’ episode is an object lesson in what can go wrong when elementary policy is set aside for stated reasons of expediency.  Apart from the lack of any Needs Assessment, the unclear role of the Commissioner of State Lands is a source of serious concern.  That Commissioner’s role is to advise the State on the strategic implications of its land policies and transactions, so this is a straight example of a case which required a solid input from that critical State Officer.

So, what should have happened?  How would a proposal like the ‘Eden Gardens’ one have been handled if the various parts of the system were functioning properly?

When parties are in commercial negotiations, there is always a Plan ‘B’, to be adopted in case the main plan goes awry.  Each side has a different Plan ‘B’, since they have different interests.

What was Point Lisas Park’s Plan ‘B’ in case their negotiations with the State were unsuccessful?  While we can never know for sure, PLP being a private company, the fact that those lots were widely offered at $400,000 can allow us to form a view as to the benchmark they were likely using.

The State’s Plan ‘B’ is far simpler to establish, since there exists the legal power to compulsorily acquire private property for a public purpose.  That was the third unique facility enjoyed by the State as set out in the previous article.

In the case of a landowner making unreasonable demands, the State has the lawful option of compulsorily acquiring the property.

The Land Acquisition Act 1994 (LAA) establishes the right of the State to compulsorily acquire private property for a public purpose.  At S.12, the LAA specifies the rules of assessment used to arrive at the sum offered to the owners of private property interests being acquired.

S.12 (4) states –

“…(4) In making an assessment under this section, the Judge is entitled to be furnished with and to consider all returns and assessments of capital value for taxation made or acquiesced in by the claimant and such other returns and assessments as he may require…”

The point in this case being that, having registered a purchase at $5M in February 2010, PLP would have been unable to legally resist a compulsory purchase which adopted that price as its basis.  Even if the State, in recognition of the roughly $29M spent by PLP on building the infrastructure for ‘Eden Gardens’, were to add that sum, the final offer would only be about $34M.

Those provisions at S.12 (4) of the LAA are a critical safeguard against persons who might seek to under-declare their properties to evade taxes, then seek to make exorbitant claims if the State seeks to acquire compulsorily.  S.12 (4) prevents the State from falling victim to any such games, it is a critical safety-valve to protect our Treasury from those who seek to pay as little as possible when taxes are due, but boldly make huge claims from the Treasury when seeking to sell.

That is why I am calling for this matter to be swiftly investigated and the responsible parties prosecuted to the full extent of the law.

This was in reality a potent dilemma for PLP, in that if they were served with a proper compulsory purchase notice, they would have either had to stick with the $5M figure as a 2010 baseline, or reject that deed and incur the strong penalties at S.84 of the Conveyancing and Law of Property Act.

One of the three deeds executed on Wednesday 3 February 2010 recorded the purchase of ‘Eden Gardens’ for $5M, which is a massive understatement of consideration.  The true market value of that undeveloped property at that date would have been of the order of $50M, so the loss of Stamp Duty to the Board of Inland Revenue would have been in excess of $3.0M.  The underpayment of Stamp Duty is tantamount to a defect in title of a property.  Are we witness to the State making a massive over-payment for marginal lands with defective title?

Did the Cabinet and the HDC receive the proper advice from the Commissioner of State Lands and the Commissioner of Valuations, as well as the other legal advisers?  If yes, that advice was plainly not followed, so in that case the question would have to be ‘What caused the Cabinet and the HDC to abandon that sound advice?‘

If the true situation is that the proper advice was not provided, we need to know why.  If the advice was not sought, then we need to know why.  If the advice was sought, but not provided, those advisers need to be rusticated so that our processes are protected from more of this nonsense.

The State has an overriding duty to comply with the law and be exemplary in its conduct.  That is not negotiable, if we are to build a society which is orderly, progressive and just.

Episodes such as the ‘Eden Gardens’ sale and the THA/BOLT deal continue the erosion of Public Trust and the loss of that intangible, almost-forgotten, source of ‘soft power’, the Benefit of the Doubt.

This Prime Minister has made repeated statements that any evidence of wrongdoing will be investigated, so that the offenders can be prosecuted according to law.  These three articles have detailed the evidence and breaches of sound public policy, so it is now over to the authorities.

The ‘Eden Gardens’ transaction is a prime example of a large-scale economic crime against the State and the interests of its citizens.

Again, I ask – ‘Who were the beneficiaries?‘

The final point here is that the parties to the PLP purchase and improvement of ‘Eden Gardens’ are now in litigation, with the contractors – SIS Ltd. – suing Point Lisas Park Limited for various monies and demanding an account of the $175M.  Case CV 2012 – 5068, so we have interesting times ahead.

Calcutta Settlement again

163940In light of the many questions raised by readers after the last article on the HDC’s purchase of land at ‘Eden Gardens‘ in Calcutta Settlement, I am continuing there.

The previous article discussed the Calcutta Settlement scheme and its relation to implementation of national housing policy.  There is little, if any, connection between the provision of affordable housing and the acquisition of those ‘Eden Gardens‘ lands, at what is surely the highest price in Central Trinidad.  How we create and implement a progressive housing policy is a critical part of this discourse, but there is more.

Another important aspect of this episode is the fact that sound land administration policy appears to have been abandoned for expediency.  Expediency should never eclipse proper policy, especially when neither the process nor end-result advance the ultimate objective of serving our citizens.

The sidelining of sound land administration policy was essential in order to get the Calcutta Settlement scheme approved.  National Land Administration policy is important so that we can be strategic in using the country’s property assets for proper national development, as opposed to the enrichment of a select few.

The State is a unique player in our country’s land arena, so we need to place this Calcutta Settlement episode into proper context from a land administration viewpoint.

This is the framework –

  • Size – The State is by far the largest land-owner in the country, which means that there are only limited situations in which it will require private lands;
  • Wealth – The State is the wealthiest entity in the country, which means that it alone can bid at certain levels for the best properties.  Applied to this case, a reasonable question would be ‘Who would have purchased ‘Eden Gardens’ and at what price, if the State had not proceeded?‘;
  • Compulsion – The State is the sole entity in the country able to lawfully acquire land for a public purpose against its owner’s wishes, which means that if an owner of private property takes an unreasonable position during negotiations, the State can compulsorily acquire it;
  • Planning Authority – The State is the national planning authority, which means it has the power to approve its own designs and proposals;
  • Statutory undertaker – The State has ownership and control of the principal utilities, electricity and water/sewerage;

So, if the State intended to construct affordable housing in Central Trinidad, it could have chosen from the abundant State-owned property in the area, granted planning permission for its own proposed development and provided services.  The State could only have bought the ‘Eden Gardens‘ land by ignoring sound land administration principles.  Elementary policy was ignored in favour of sheer expediency, or worse, the enrichment of carpetbaggers at the expense of the Public Interest.

What was the advice of the Commissioner of State Lands on this transaction?  Was his advice sought?  Bizarre and expensive precedents are being set in situations of zero benefit to the Public Good.  This deal is detrimental to the Public Interest.

At a level of State policy, there was a collapse into expedience and a continuing silence as to the role of ‘Eden Gardens’ in the national housing policy.  But when I delved into the documents in my possession, there were even more causes for concern.

The Registrar General’s records show that there were three transactions executed on the same day for this property – It was Wednesday 3 February 2010 –

  1. Deed # DE2010 004276 02D001 rescinded the 2004 Sale Agreement (the one for $17M, registered in 2007), with the deposit returned and no claims made;
  2. Deed # DE2010 007816 95D001, Point Lisas Park Ltd (PLP) purchased the property from the owner, Sookdeo Deousaran, for $5M, paying Stamp Duty of $350,000;
  3. Deed # DE2010 003449 63D001, PLP mortgaged the property to said Sookdeo Deousaran for $18.5M at 8%, to be repaid on the last day of January 2012.

These purchasers were prepared to pay $17M for this undeveloped property in mid-2004, but ended up paying only $5M for it in early 2010.  On the same day, they mortgage it for $18.5M.  By happy coincidence, or otherwise, the property with infrastructure added was offered to the HDC at $200M in late January 2012, two years later.  Literally unbelievable.

What is more, the fact that the second and third of those deeds were executed on the same day is deeply perturbing as to the operation of the Stamp Duty section of the Board of Inland Revenue.  The second deed transfers the property for $5M and Stamp Duty is paid on that, yet the third deed shows a mortgage granted the same day on the same property for $18.5M.  Normal practice in the finance world is for a mortgage to be taken on a property at some fraction of its current market value.  Both those deeds were registered at the San Fernando office of the Registrar General’s Dept.

If there were a reasonable gap between the first sale to PLP and the new owners mortgaging the property, it might be possible to claim some increase in value due to its physical development or obtaining permission to develop.  But since both transactions took place on the same day, there is no way anyone can claim a genuine difference in value.

The 8% interest rate on the two-year mortgage is instructive, in that the actual rate at which finance was offered at that time for similar projects was in the 10.5-12.0% range.  The reasonable conclusion being that both sides had a high degree of comfort with each other, indicative of close collaborators.

S.84 of The Conveyancing and Law of Property Act (1939), states that the penalty for falsely stating the consideration in a deed is a modest fixed fine and a further penalty payment of 5 times the amount of the understatement.  Those penalties apply to both the buyer and seller, perhaps to discourage these dishonest practices.  The Act goes further to offer the penalty payment as a reward to the person making the report of the understatement.

S.86 of that Act also specifies a small fixed penalty for an attorney found guilty of “…knowingly and willfully…” recording a false consideration and mandates that the said attorney “…shall…” be disbarred.  Of course an attorney who had prepared only one of those deeds could reasonably claim to be genuinely unaware of the entire transaction, so we will see.

Sad to say this ‘Eden Gardens’ scheme is reminding me of the CL Financial antics. I am thinking about the the affidavit of the Inspector of Financial Institutions  stating that Clico Investment Bank did not file its Corporate Tax returns for 2007, 2008 and 2009 and the fact that, despite those lapses, they were able to obtain a bailout on ‘sweetheart terms‘.  The Eden Gardens chiefs were able to understate the property value to avoid the true level of Stamp Duty, but were also able to get Cabinet to agree to effectively bail them out, also on ‘sweetheart terms‘.

Always remember that the land at ‘Eden Gardens‘ cost $663,000 per lot as agreed by the Cabinet, seemingly unaware that the developers were offering lots there for sale at $400,000 only months before.

The HDC purchase was completed on 9 November 2012 and recorded in DE 2012 026026 11D001.  The para before the $175M sale price is the one which specifies the 2010 deed for $5M, just so.

I approved of the diligence of our AG in challenging the legality of the THA’s BOLT project.  This ‘Eden Gardens‘ scheme is also in need of urgent investigation, so we will see.

My final point is that all the information cited in this article is available on the internet, so where is the basic due diligence?  These sorts of schemes should not even get past the first gatekeeper, far less into the Cabinet for consideration.

From THA/BOLT to Calcutta – tangled webs: Part 2

Last week I set out my main concerns in relation to poor procurement processes with the THA/BOLT project.  A large amount of Public Money was being committed to a project with little apparent regard to Value for Money concerns in an arrangement which seems to expose the THA to the principal risks at a time of limited financial resources.

This article is a critical examination of the controversial proposed purchase of 50.6 acres of land at Calcutta Settlement by the Housing Development Corporation (HDC).

The HDC’s role is to build and maintain homes to satisfy the requirements of its main client, the Ministry of Housing and the Environment.  According to that Ministry –

The Corporation is mandated by the Act to:

  • Provide affordable shelter and associated community facilities for low and middle income persons and;
  • Carry out the broad policy of the Government in relation to housing.

With over 125,000 applicants on the HDC’s waiting-list, there is no doubt that, for many poor people, the HDC is their only hope of getting a reasonably affordable home of decent quality.  That means that the HDC is an important implementing agency in our nation’s welfare provisions, which is a role I fully support.

edengardensplanThis post is about ‘Eden Gardens’, which is on the western side of Calcutta Settlement Road No. 2 in Freeport, just north of Central Park, opposite to Madoo Trace.  The property comprises 264 residential lots at an average size of 5,600 square feet, 2 residential/commercial lots, 2 nursery school sites, 2 recreation grounds and 4 playgrounds.

In November 2011, the HDC obtained a valuation from Linden Scott & Associates at $52M.  In January 2012, the owners of Eden Gardens, Point Lisas Park Limited, offered the property to the HDC at $200M.

That is an intriguing sequence of events, since the HDC would hardly pay for a valuation on a property they were not interested in.  If we accept that the property was likely offered to the HDC before they ordered the Scott valuation, then one has to ask on what terms was it offered.  That letter of offer, the original one, must be disclosed now.

In April 2012 the Commissioner of Valuations advised the HDC that the current open market value of the property was $180M.  In June 2012 Cabinet approved the HDC purchase of that property for $175M, which is $663,000 per lot – at an average lot size of 5,600sf that equates to $118 per sf.

The normal professional and commercial practice when buying in this quantity, is to obtain a discount on the unit price.  It would be reasonable to expect that these lots could be sold for significantly more than the HDC agreed to pay.  We will see.

There was a lot of argument in the public about this transaction, so I was prompted to look closely at the deal.

I have these serious concerns –

  1. Point Lisas Park Limited (PLP)
    1. On 1 June 2004, Anthony Sampath, Patrick Soo Ting and Azad Niamat agreed with the owner, Sookdeo Deousaran, to buy the property for $17M. That Sale Agreement is registered as deed # DE2006 023638 20D001.
    2. On 26 April 2007, PLP was incorporated as Co. # P2956 (95), with the same three individuals who agreed to buy the property for $17M as its Directors.  On 6 May 2011, the Companies Register recorded that  Kayam Mohammed became a Director.
    3. On 3 February 2010, according to deed # DE2010 007816 95D001, PLP purchased the property from Sookdeo Deousaran for $5M, paying Stamp Duty of $350,000.

    These purchasers were prepared to pay $17M for this undeveloped property in mid-2004, but ended up paying only $5M for it in early 2010.  This is the same property which was offered to the HDC at $200M in early 2012, two years later.  Literally unbelievable.

    calcutta-timeline_v4

    The stated payment of $5M shown in that 2010 deed is a massive understatement of value, probably being only 10% of the true market value.  The Stamp Duty properly payable on a $50M sale of land would have been $3.5M.  The Stamp Duty Section of the Board of Inland Revenue has the discretion to refer transactions to the Commissioner of Valuations in cases where they suspect that the consideration shown on the deeds is understated.  I am reliably informed that in this case the BIR did not seek an opinion from the Commissioner of Valuations.

    I am calling for that 2010 transaction to be revisited immediately, with a view to the State recouping the proper Stamp Duty.  The Public Interest demands no less.

  2. The missing link 
    163940Between 2004 and 2012, the infrastructure for Eden Gardens was built, which included the roads, street lights, drains, water and electricity supply. Eden Gardens lots were available in 2011 via at least two real estate agents – Golden Key Real Estate Ltd. and Samko Realty – at $400,000 per lot.  This was widely advertised.
  3. The valuations
    • Linden Scott & Associates in November 2011 – $52M
    • Commissioner of Valuations in April 2012 – $180M

    Those lots were known to have been on sale at $400,000 in 2011, so the entire development of 264 lots could have earned its owners a total of say $106M.  Even if we allow a figure of $5M for the “2 residential/commercial lots and the 2 nursery school sites”, we are still in the range of $110M as the ‘Gross Development Value’.

    Given that these lots were clearly not selling at the $400,000 price-point, those estimates are at the upper end of possibility.  Which means that we have to adopt a lower ‘Gross Development Value’, say $95M-100M.

    If the entire development is to be acquired by a single purchaser in early 2012, that purchaser must deduct from the Gross Development Value to cater for –

    • Stamp Duty – at 7% of the Purchase Price;
    • Legal Fees;
    • Developer’s Profit – at a minimum of 25%;
    • Agents’ fees for the sale of the lots;
    • Cost of Finance to account for the cost of borrowing that sum until the lots are sold;
    • Time Value of Money, to account for the element of delay in recouping one’s investment.

    I estimate that those discounts would amount to 35-40% of the Gross Development Value.  If we adopt that approach, the maximum net present value of Eden Gardens in early 2012 as a fully-infrastructured property would be in the $60M range.

The meaning of it all

The usual accepted practice of residential development can be expressed by this ‘rule-of-thumb’, to spend less than twice the cost of the lot does not make best use of that land.

Even if we ignore the ‘rule-of-thumb’, one has to wonder

‘In what way does this transaction satisfy the HDC’s mandate?’

It is most disturbing that there has been this amount of debate without the issue of the end-user ever being mentioned.  How do the real needs of the homeless feature in this massive HDC transaction, if at all?

To my mind this Calcutta Settlement scheme resembles the HDC’s flagship project at Fidelis Heights in St. Augustine which created an elaborate, expensive multiple-family project with no allocation of new homes to the needy people on the waiting-list.

I have established via a separate enquiry that only about 2% of the HDC output of new homes is allocated to those who can only afford to rent and this project is likely to be a continuation of that detrimental trend.  The HDC continues to allocate vast sums of money to housing those who can afford to buy, while leaving the left-overs for those who can only afford to rent.  That policy is inimical to the interest of the poorest members of the public, to whom the HDC is literally the last refuge for decent housing.

In all the circumstances, it seems that we need to have the air cleared on these issues –

  • What is being done about the under-stated consideration in the 2010 deed for the sale of Eden Gardens?
  • How many of the 264 lots were sold at the 2011 asking-price of $400,000?  That is important since it establishes a benchmark for the proper value of these lots in the open market.
  • When did Eden Gardens receive all the required approvals?
  • When was the infrastructure completed at Eden Gardens?
  • On what terms was Eden Gardens originally offered to the HDC?
  • There is an abundance of develop-able State-owned lands in the vicinity, particularly since the 2004 closure of Caroni Ltd.  So why did Cabinet agree to buy private lands in Calcutta Settlement at these prices?
  • Who owns Point Lisas Park Limited?

I close by reminding readers of the corruption ratio set out in the first article.  As I wrote in June 2008, referring to the Manning government and its UDECOTT antics –

…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 naivete…

Declarations –

  • Raymond & Pierre Limited, under my leadership, provided certain professional advice on this property in 2007.  No aspect of that advice has formed part of this article.
  • Linden Scott is a former colleague of mine, having trained at Raymond & Pierre Limited.  He is now a rival professional.
  • Raymond & Pierre Limited have provided professional advice to the HDC in the past.

From THA/BOLT to Calcutta – tangled webs: Part 1

tha-bolt1
Artist Impression of THA Admin building courtesy Amera Caribbean Development Ltd.

With the THA elections having become a kind of national contest, the issues of governance and integrity loom large.  The two relevant controversial issues, both of which emerged late last year, were the THA/BOLT office project and the HDC’s proposed purchase of land at Calcutta No. 2 Settlement.

Both those projects have given me serious cause for concern in terms of proper public procurement practice, so much so that I see them as being two sides of the same coin.  Both these cases are models of inadvisable dealings in Public Money of a type which no prudent or reputable company would undertake.  I am choosing my words carefully since recent reports are that litigation has already started on both projects.

I do not at all agree with the widespread myth that corruption is a minor thing which adds maybe 10% or 15% to the cost of projects.  That misinformation is nothing but public mischief which has blinded us to the scale of the theft of Public Money, so it must be completely demolished.  In the case of the 1970s to 1980s ‘Government to Government Arrangements’ the then PM, George Chambers, told the nation that two out of every three ‘Petro-dollars’ was wasted or stolen.  In the ongoing imbroglio over the $1.6Bn Piarco Airport project, we learned from the DPP’s S.34 statement that $1.0Bn of Public Money had been located in offshore bank accounts.

The DPP’s S.34 Statement on Wednesday September 12, 2012

“…These cases involve allegations of a conspiracy to defraud the Republic of Trinidad and Tobago of over TT$1 billion by the fraudulent use of bonds and the rigging of the contracts for the various Construction packages for the Piarco Airport Project…”

The DPP’s full statement is here.

Also, from “Cops target MP in $1Bn airport scam” in Trinidad Guardian of Friday 5 March, 2004 –

“…TV6 News reported last night that Lindquist and Interpol officers had discovered more than $1billion stashed away in off-shore accounts, arising out of corruption in the airport project…”

This article deals with the THA/BOLT project, which is a Public Private Partnership. The PPP is a procurement model now being pursued by this government, according to the strategy outlined in the 2013 budget.

Build Own Lease Transfer (BOLT) is a subset of the PPP procurement method.  Under a BOLT arrangement a client has a facility built by the private sector at their expense – the client makes agreed rental payments so that the developer can cover the cost of building the project and a reasonable profit.  At the end of the agreed lease period, the facility is transferred to the client.

There has been effective use of PPP to produce Public Goods like the Brian Lara Promenade.  BOLT has also been used to procure prominent POS buildings such as NALIS, UTC HQ and Ministry of Works HQ (via Republic Bank) and the AG’s office at Cabildo Chambers (via NIPDEC).

The PPP can be a feasible method of procuring public goods, offices or other facilities in situations where the State is unable to commit to the capital expenditure and there is a pressing need.  The strong selling-point of the PPP is that the private sector takes the risks and is allowed to make a reasonable profit while the public sector can add to its stock of capital goods without the risks of project execution.

These PPP arrangements are now being intensely criticized in developed jurisdictions as having served the public interest very poorly.  The focal point of much of the criticism has been the fact that, despite the rubric, the private sector has seldom taken any genuine risk.

Turning to the actual THA/BOLT deal, I have to say that the decision to publish a large number of the important documents in relation to this arrangement is to the credit of the THA.

• The bundle of documents are here.

Orville London, THA Chief Secretary
Orville London, THA Chief Secretary

In response to the request from the Minister of Finance, THA leader Orville London said:

…that under the laws and the T&T Constitution the Finance Minister has no authority to instruct him to provide information to him within any timeframe.

However, London said, in the interest of public disclosure and considering that this particular transaction has generated so much discussion he believed that he had a responsibility to make the information available to the public and the Minister…

This is a bold and in my view admirable initiative by a leading Public Official and I have to say that it has tempered my scepticism over this project.  I only wish that Cabinet Ministers took a similar view of their responsibilities.

The THA ‘bundle’ details the ongoing financial shortfall in allocations from Central govt, the main point of which is the fact that the THA is definitely resource-starved in relation to the arrangements with Central govt.  When one considers the financial state of the THA alongside the national economic outlook – we are in our fourth year of deficit financing in relation to the national budget – it is a sobering background to this discourse.

I have spoken with all the main parties to this arrangement and this is a summary of the THA/BOLT deal.  The THA purchased a 3-acre parcel of land at the corner of the Claude Noel Highway and the Shirvan Road from private landowners for $12M and immediately leased it back to them for a 199-year lease at a nominal rent.  The private developers have agreed to erect an 83,000sf office building at a cost of $143M and the THA has agreed to lease it for 20 years at a fixed rent of $15.61psf – an annual rent of about $15.55M, totalling some $311M over the term of the 20-year lease – with the property reverting to the THA at the end of the lease.  Those offices are to be built for the THA’s Division of Agriculture, Marine Affairs, Marketing and the Environment.

There have been recent reports of the AG’s lawsuit to test the legality of the THA/BOLT arrangement, so this is not an attempt to pre-empt the Court in ruling on those submissions.

My concerns arise at the level of the Needs Assessment, which must be the first stage of any proper procurement process, public or private.  The purpose of the Needs Assessment is to determine the rationale for and scope of the project so that preliminary consideration can be given to the key elements before any high costs are incurred.  In this case, we are told that the developer approached the THA, which is unusual to the extent that best practice requires that extra care be taken with unsolicited proposals.

The main points concerning me are that once again we are seeing large-scale expenditure of Public Money without a proper business case having been made.  The opinion of Hamel-Smith & Co as to the legality of the transaction is of no comfort to me, this is a matter of making a sound investment decision.  A legal opinion is necessary but not sufficient.

Senate president, Timothy Hamel-Smith
Senate president, Timothy Hamel-Smith

That 6-page legal opinion,dated 3 January 2011,by Timothy Hamel-Smith (who was appointed Senate President on 18 June 2010) is at page 168 of the ‘bundle’.

  • Quantity of space – at pages 68 and 69 of the THA ‘bundle’ there is a ‘Note for Executive Council’ which summarises that the offices occupied by that Division – a total of 22,500sf is detailed, while a further 6,000sf can be reasonably surmised for the last Department.  The average rent being paid by the THA for this Division is $8.17psf, also please note that a total of 28,500sf is now occupied by the Division for which the THA is procuring an 83,000sf office building.
  • Quality of space – The cost of $143M for that space equates to $1,723 per square foot and I am reliably informed that the contract calls for a fully fitted and finished office building.  That figure is at the absolute upper end of the range of costs for office buildings.
  • Rent levels – According to the THA’s adviser on this project, Peter Forde, at the THA Press Conference on 10 September 2012 – see

    …the monthly payment of $15.61 per square foot per month was not an unreasonable rate because there were properties in Scarborough where tenants were paying as much as $10.00 per square foot. He stressed that even if there was inflation the rate will remain the same…

    The first issue I have with that is the attempt to use the $10psf comparable to justify the $15.61psf rent.  That is an unreasonable ‘stretch’ by my standards as a professional valuer.  Did the THA seek the opinion of the Commissioner of Valuations?  Secondly, the fact that the rent cannot be increased in the event of inflation is a distraction, since the likely effect of this new, huge THA office building is that the rental market in Tobago will become saturated with the offices they vacate.  The result of that is the decline in office rental values, so in the absence of any provisions for rent adjustments, the burning question has to be ‘What real risk is this developer taking?’.  Risk Allocation remains a real issue.

So, in summary, we have a semi-autonomous Public Authority contracting, at a time of tremendous financial strain, to build first-class facilities three times larger than the second-class ones it currently occupies.  Finally, please note that according to the ‘Note’ I cited earlier, the current monthly rent bill of the THA Division is $231,788, while the new monthly rent under this arrangement will be $1.295M – over five times more.

At the start of this article, I gave examples of the ratio at which Public Money was wasted or stolen, so just compare this project to those figures.

My next article will delve into the Calcutta Settlement land deal and its own peculiarities.

BLIND MAN’S BLUFF

“Blind man’s buff  [or Blind man’s bluff] is played in a spacious area, such as outdoors or in a large room, in which one player, designated as “It”, is blindfolded and gropes around attempting to touch the other players without being able to see them, while the other players scatter and try to avoid the person who is “it”, hiding in plain sight and sometimes teasing them to make them change direction.”

Wikipedia contributors, “Blind Man’s buff.” Wikipedia, The Free Encyclopedia, http://en.wikipedia.org/wiki/Blind_man%27s_buff  (Accessed October 7, 2012)

In this rounds, we, The Public, are ‘it’…you see?

The entire ‘section 34 fiasco’ is churning in my mind, so I am calling it the Plot to Pervert Parliament.

The way in which the country, its significant institutions and its legislature have been misled for the benefit of political financiers has given me pause.  The entire episode is truly revolting, even for those of us who have little faith in our political rulers.

Having listened to the PM’s address on this S.34 fiasco there are now more questions than answers.  The silence by the PM and other leading MPs on these documented facts during the Parliamentary debate on the repeal seems to amount to a calculated decision to withhold information.

The main questions for the PM are along two limbs –

  1. Firstly, how does the AG’s absence overseas for a few days exonerate him?  We need to stay with this line, given that it is the principal one advanced by the PM after her research into the issue.
  2. Secondly, there is the burning question of what is Volney’s true role in all this?  Did the PM ask him why he misled his Cabinet colleagues and the Parliament?  If so, what did Volney say?  If the PM did not ask Volney for his reasons, one has to be deeply skeptical about the idea that this single Minister outwitted the entire Cabinet.

The fact that this episode centred on the actual 50th Jubilee weekend was a powerful wake-up call to us all.  History is rich in irony.

For my part, there is no way we are lightly ‘moving on’ from this tragic place…this is the occasion to resolve a lot of this nonsense and put us on the road to a much improved system of governance. It is going to be a hard campaign, but we must have a realistic appreciation of our situation if we are to have any chance at prevailing.

After the PP’s election victory, the Steve-Ish issue presented a conundrum since the USA wanted them and the public wanted to see them face justice. The Extradition request was refused so that they can be tried here.  That ruling was not appealed by the AG, who stated that the reason is to allow them to be tried here.

The result of the sudden reversal in the face of mounting protest, is that the Piarco Accused can now say to the Court that Parliament exercised its powers to repeal legislation upon which they were relying to seek freedom.  Parliament acted to reduce the rights of two individuals and the Court may be asked to rule that those actions of the Parliament have oppressed these men.  The recent repeal of this section seems to have fortified the case of the Piarco Accused in seeking freedom.

Sidebar – Was S.34 the first time?

I am now recalling that the CLF bailout and shareholders agreement were never debated, they were both declared as fait accompli.  What is more, as I wrote in this space recently, the Ministry of Finance is claiming that the contents of the presentation to Members of Parliament on the new bailout laws is secret.  The S.34 fiasco involved an alleged stealing of $1Bn in Public Money and we are all now seeing the extent to which these white-collar criminals and their servants will go to cover their tracks.  It is truly revolting.  So, the question is ‘‘Given what we now know and the fact that the CLF bailout involves many billions of dollars in Public Money, is it reasonable to assume in good faith that our Parliamentarians and Public Officials will be responsible and honest in their dealings?’ I will be returning to this, it is turning in my mind.

Proper Priorities of our Parliament
Our Parliament has been on holiday since 11 July, but it has been reconvened twice in that period.  The first occasion was in mid-August to satisfy an upcoming evaluation by the Financial Action Task Force of our Financial Intelligence Unit.  All members voted in support of that Bill.  The second occasion was for the repeal of the controversial s.34 and that raised a question for me.  Why did the government agree to reconvene to repeal?  Was it because of our objections and criticisms, or was it the stated concerns of the USA?  In our 50th year of Independence, did the concerns of the USA outweigh our strong concerns?  A sobering reflection.

The Title of this article is a kinda medley, when you study that, in Whe Whe, #34 is ‘Blind Man‘, we have been outwitted.  One of my favourite moves, in those well-plotted spy thrillers, is the ‘Double-Bluff‘…This S.34 episode is a real cynical game of Blind Man’s Bluff….you see?

“…They’ve got 12 Aces up their sleeve!
So who the Hell can we believe?!
Steve?
Not even the love of your children’s enough…
To quell this cynical pain!
Can you show me a directing-sign?
Show me a sign!
On this Highway of Big-Tief and Fools…
You tief yours and I shall tief mine!
Leh we go down the Road an break the broken rules
So in this morning of another day
When decency will lose its way
Ray!
There goes another $100 Million again!
Back to the Same Ole Same!
….
The self-contempt is like a Badge of Hate!
Award yuhself!
It’s not too late!”
© Lypsoland Music. Lyric used by Permission. All Rights Reserved.
From the opening stanza of David Rudder’s ‘Back to the Same Ole Same‘ on the 2001 album ‘Autobiography of Now’

Where do we go from here?  That question is for the second part of this column.

AUDIO: The John Wayne Show Interview – 30 June 2012

Afra Raymond chats in ‘The Barbershop‘ with John Wayne Benoit on i95.5FM about the CL Financial bailout and Public Procurement issues and other topics. 30 June 2012. Audio courtesy i95.5FM

  • Programme Date: Saturday, 30th June 2012
  • Programme Length: 0:49:03 + 0:35:47

Part 1:
Part 2:

VIDEO: Early Morning Interview – 4 May 2012

JCC President Afra Raymond appeared on Early Morning with Hema Ramkissoon to discuss ‘Government fails to deliver?’; a question on the minds of the construction industry. 04 May 2012. Video courtesy CNC3

  • Programme Air Date: 4 May 2012
  • Programme Length: 0:16:18

VIDEO: JCC Press Conference – 02 May 2012

The JCC hosted a Press Conference recently to discuss issues in the country in the construction industry. Afra Raymond’s contribution to the press conference is here. 02 May 2012. Video courtesy JCC

  • Programme Air Date: 2 May 2012
  • Programme Length: 0:13:33

VIDEO: POS Rotary Luncheon Speech – 24 April 2012

On Tuesday 24 April 2012, JCC President Afra Raymond addressed the POS Rotary Club at their luncheon on ‘The Imperative of Public Procurement – The Government to Government Arrangements‘ – the Power Point presentation is shown here.

  • Programme Air Date: 24 April 2012
  • Programme Length: 0:32:36

Continue reading “VIDEO: POS Rotary Luncheon Speech – 24 April 2012” →