Category: Property Matters

Property Matters – The Needs Assessment

The Ministry of Planning & the Economy (MPE) announced last week that 10 proposals had been received in response to its RFP for Invader’s Bay.

Given that MPE has not carried out a Needs Assessment for this prime property, for whatever reason, I will continue to outline the relevant elements for the Invader’s Bay property.  This is not intended to be complete, just a list of what I consider to be the critical items a proper Needs Assessment would include –

  • Investment – This is a parcel of land estimated to be worth at least $1.0Bn, so any attempt to describe this process as ‘not being an investment’ would be completely wrong.  In the literal sense, it might not involve any expenditure of State money, but, in every other sense, the disposal of this $1.0Bn asset would constitute a major State investment in Invader’s Bay.
  • The National Interest – At this moment the imperative is to diversify our economy so as to find sustainable replacements for our declining energy revenues, so this is an apt point.  Following on last week’s column, it seems reckless that such an attractive State-owned property would be developed without consideration of the strategic issue.  Even on the conventional basis of announcements of construction jobs and permanent jobs etc., it is difficult on purely financial grounds to justify most types of development on that site, especially given the generally depressed market.  The decisive factor, given the level of interest such a unique offering is likely to attract, would be to have as an identified ‘Need’ that only projects which were net earners of foreign exchange would be considered.  Such a condition would eliminate any offices, apartments, foreign franchise restaurants or shopping malls and set the stage for a different development discussion.  A necessary discussion at this point in our country.  Please note that the RFP does state that the project should generate foreign exchange, but that is only expressed as an ‘expectation’, which is far too flexible, given the influence of the traditional property developers.  If the intention is genuinely to break with the past and set off in a new direction, the conditions need to be strong enough to break the grip of the past.
  • Balanced Development and Lagging areas – The RFP speaks to these concerns as follows – “…The Government recognizes the value of long term planning as well as problems created when long term planning is ignored. In order to ensure balanced development and restore lagging areas, care must be taken in the development of new areas…”  Those are real concerns, but they seem at odds with the intention of the RFP, since the execution of that plan gives us yet another major development in our capital.  We should consider if this is an area we want to develop at this time – bearing in mind that scarce private-sector resources may be required in other part of the country – for instance, the San Fernando Waterfront and other areas – so that development can be balanced instead of continuing the last administration’s emphasis on POS.  The sidebar contains a comparison of three large-scale ‘urban development’ districts which formed part of the budget.

There is always the question of who controls the terms of these public debates.  The intention from this side is to have that flawed RFP withdrawn.  To proceed as things stand is to continue on a path which lacks the necessary transparency and public participation.  The quantities of money involved and the absence of those critical elements means that we would be proceeding with all the ingredients for corruption.

This RFP amounts to an invitation to tender, so the bogus idea that this is just a discussion or consideration of proposals must be discredited.  It is nothing of the sort.   This RFP is a tender process to put these valuable public lands into private hands, which is quite different from a consultation.  We have to stop any attempt to mix-up the two processes.

The State and its agencies have an over-riding obligation to be exemplary in their conduct.

SIDEBAR – A budget comparison

The 2012 budget sets out three urban development projects, at pages 31 and 32 –

  • Invader’s Bay – “…significant interest has been expressed in the transformation of the waterfront along Invader’s Bay. This development has great potential for promoting commercial activities in the services sector and will benefit the country significantly. Such projects are meant to be private sector initiatives utilizing green building technologies and will assist in making Trinidad and Tobago an attractive destination for new investments…”
  • Sustainable City Project – East Port of Spain – “…This initiative, is part of a wider “Emerging and Sustainable Cities Initiative” supported by the Inter-American Development Bank of which Port of Spain has been chosen as one of the five pilot cities from170 eligible cities in the hemisphere…This project is being developed in partnership with the East Port of Spain Council of Community Organizations, the Caribbean Network for Urban and Land Management at UWI, the East Port of Spain Development Company, and other key stakeholders. This exercise has also engaged the Making Life Important Initiative of the Ministry of National Security…”
  • Chaguaramas – “…the Chaguaramus Development Authority is spearheading development in the North-Western region and a master plan detailing land use proposals for that region will soon be subject to public discussion…”

Of course those three proposals are favouring Trinidad’s north-west peninsula, which returns to the theme of balanced development, but a further description of their relative merits is beyond the scope of this article.  I am inviting readers to consider the varying approaches to an important long-term large-scale issue such as urban development.

In the cases of east POS and Chaguaramas, the commitment to widespread consultation is manifest, yet there is no such commitment evident in the case of Invader’s Bay, which seems to me to be ‘the jewel in the crown’.  The three current strategic plans for POS, all paid for by Public Money, are being ignored by the very Ministry responsible for Planning.

Good Public Administration requires actions which foster the confidence and trust of the public, that is indisputable.  Those policies and actions must be transparent, reasonable and, above all, consistent, if the public is to place real trust in the hands of the administration.

For all those reasons, it is unwise for any administration to operate in an inconsistent fashion.

In the case of Invader’s Bay, with the stakes so very high, it would be reckless to continue in this manner.

Property Matters – Proper Procurement Practice

My last column addressed the imperative of controlling State expenditure as an element in the national budgeting process. I made the point that a new Public Procurement system needs to come into effect to give us the tools to control these huge expenditures.

The Ministry of Planning & the Economy (MPE) published a Request for Proposals (RFP) at the end of August for the development of Invader’s Bay, a 70-acre parcel of State-owned reclaimed land – shown in this plan  below: invadersbay-sml

The Invader’s Bay lands are absolutely prime property – flat, waterfront land with easy access to highways and all the urban infrastructure of water, electricity and sewers. These are valuable public lands, with an estimated value of at least $1.0Bn.

That RFP invited proposals with a closing-date of 4 October, which is an entirely inadequate 6 weeks. The Joint Consultative Council for the Construction Industry (JCC) has taken a strong position against that RFP process, including writing the MPE and meeting with the Minister, Sen. Dr. Bhoendradatt  Tewarie and Minister of Trade and Industry Stephen Cadiz, MP.

The JCC wants work for its members, but that must be after a proper process, it is not our intention to stop any particular project

The JCC wants a proper participatory process.

The first “official” response to our publicity was an article in the Newsday of Monday 3 October – ‘Cadiz: JCC jumped the gun‘, the leading point being that the government was trying to open-up the procurement process so as to invite suitable proposals.

Cadiz is reported to have said

…What the Government has done is asked interested parties for proposals for concepts,” he said. “I don’t see that there is any issue at all. There were proposals made and the Government felt that this is public land and we should open it up and we gave people six weeks, we feel that is enough time…

Public Procurement can be described as the process which results in the spending or earning of ‘Public Money’.  Public Money is money which is due to or payable by the State, or any debts for which the State is ultimately liable.  Therefore Public Money must include the contracts entered into by the State as well as the disposal, by sale or otherwise, of State assets.  The Invader’s Bay RFP is the start of a large-scale Public Procurement process, since its stated intention is to lease land to developers who make ‘suitable proposals’.

The publication of the RFP and those statements all give the impression that a proper procurement process is underway at Invader’s Bay.

Nothing could be further from the truth.  Let me explain.

The first step in the Procurement cycle is the ‘Needs Identification’.  The two main questions in the case of Invader’s Bay would be –

  1. What do we want to do with this property?  That must also include ones assumptions as to what uses are not desirable there.
  2. Why do we want to do these things?

For example, the answer to the ‘What’ question could be that the property would be used for recreation or parkland.  The answer to the ‘Why’ question could be either for private profit or to create new recreational facilities as a ‘public good’, those being free facilities which increase the amenity of a district or city.  The Brian Lara Promenade and the San Fernando Hill facility are two examples of that.

Without a Needs Assessment it is impossible to objectively assess what is a ‘suitable project’.  To carry out a Needs Assessment, it would have been necessary for the MPE to have consulted widely with the public and stakeholders.  The Invader’s Bay lands are in our capital and are about one-third the size of the Queen’s Park Savannah.  My point being that any proper Needs Assessment must involve substantial public and stakeholder consultation.

There has been no consultation whatsoever.  None.

What is even more unacceptable is that the RFP, which was published by the Ministry of Planning & the Economy, is silent as to the 3 existing strategic plans for the Port-of-Spain area.  The 3 plans are:

  1. Final Draft Development Plan: A Strategic Planning Framework for Metropolitan Port of Spain (Volume 2 Implementation Plan – The Port of Spain City Corporation) [Main Link] [Alternate Link]
  2. A Strategy for the Economic, Social and Physical Transformation of East Port of Spain: East Port of Spain Strategic Development Plan – September 2007
  3. Port of Spain Waterfront Project Strategic Development Plan for lands from Sea Lots to the Mucurapo Foreshore, still unpublished.

All of those plans paid for with Public Money.  A straight case of – ‘nearer to Church, further from God’.

So, how are the proposals to be assessed?  How will the decisions be made?

At para 3.5 of the RFP, at ‘Project Assessment’, we read –

“Proposals will be scored using the “Invader’s Bay Development Matrix and Criteria Description”.

We asked for that document when we met with the Ministers, but were told that it would be completed after the closing-date.

In the absence of these rules, how can developers know the ingredients of a winning proposal?  Given that the evaluation rules are due to be completed after the closing-date, how can we be sure that this is a transparent process?

This could be an opportunity to demonstrate best-practice for public procurement, as promised by the People’s Partnership.

What is happening here is a recipe for accusations, blunders and confusion, just like in the previous decades of ‘old politics’.  All the ingredients for corruption are present and that is why the JCC has made this call for the immediate withdrawal of this deeply-flawed RFP and its revision, after wide consultation.

We need to move away from the pattern of the biggest projects being set-up in secret , so that by the time the public gets to hear about it, all the vital details are fixed.

Expediency taking precedence over proper process has long been a costly constant in the governance of our society.

We must do better and it is not too late to do the right thing.

Expenditure of Public money – Accountability – Transparency = CORRUPTION

SIDEBAR: Criticisms by Cadiz

stephencadiz
Minister of Trade and Industry, Stephen Cadiz, MP

It is instructive to consider the criticisms of the JCC which were reportedly made by Cadiz.The headline accused the JCC of ‘jumping the gun’, implying undue haste and thoughtless speed.  Cadiz is quoted as saying, “…I think the JCC jumped the gun,” he said. “If you cannot do it by six week then how long? Six months?”.

At another point in the same article, Cadiz is quoted as saying, “We need to get these things going,” he said. “The JCC only made representation of their disappointment four weeks into the RFP…”  The implication being that the JCC were tardy and should have acted more swiftly.

If this Invader’s Bay situation were not so serious, it would be comical. The question in my mind is ‘Which of those explanations does Minister Cadiz believe?’

What seems clear is the hostility with which the Minister views the intervention of the JCC.

Property Matters – Spending and Savings

Discussion is revolving around the country’s earnings from our energy resources and the likely size of the next year’s budget, expected to be delivered in early October.

Given the fact that our energy resources are reported to be declining in both quantity and value, it is very important that we make best use of that stream of resources to both sustain the existing arrangements and create a new series of industries to replace those declining earnings.

In my view, our focus in this critical transitional period has to be on making best use of those limited tax dollars.  Although that is an objective on which we can assume broad consensus, there seems to me to be far too little discussion on the ways in which that can be achieved.

When we consider that most of the capital expenditure in the country takes place via the State and its agencies, it is clear that proper control of that expenditure is key to making the transition for our society.  The other parts of State expenditure are recurrent, such as salaries and rents.

The growth of corruption in State expenditure is a clear danger to good order and national development.  White-Collar crime, as it is sometimes called, is a growth industry because there is almost zero chance of being detected or punished and huge rewards.

The danger to good order is the fact that merit has a declining role in the way State spending decisions are made.  It is clear that other factors have become dominant – things like friends, family and political affiliation are now well-understood to be the ingredients of success in getting work from the State.  That is the case for all political administrations so far in our country, but it must change if we are to make the transition to a sustainable economy in which different values and income sources take the lead.

The budget of the present financial year is the largest in our country’s history and it is true that the major part of that expenditure could be classed as exceptional items, having to deal with settling large debts of State Enterprises and the huge CL Financial bailout payments.  The point here is that those huge expenses arose in situations with a distinct lack of transparency and accountability, from the lack of accounts at UDECOTT and HDC to the naked corruption of the CL Financial bailout, there is a pattern.

If there is no transparency and no accountability, there will be corruption and that is inescapable.

Expenditure of Public money – Accountability – Transparency = CORRUPTION

Public Procurement
Public Procurement refers to any expenditure or receipt of public money, which is money due to, or ultimately payable by, the State.  That definition covers all the Ministries and State agencies as well as modern arrangements such as BOLT, PPP, concessions and so on.  In the PP’s first budget, there were disclosed plans to spend almost $14.0Bn in the capital program of the Ministries and State Agencies.  We need a proper Public Procurement system to manage these vast sums of money.

It is for this reason that the People’s Partnership commitment to implementing a new and effective Public Procurement system is to be welcomed.  The JCC and its partners – the Chamber of Commerce, the Manufacturers’ Association and the Transparency Institute – have submitted a draft Bill for consideration of the Joint Select Committee established by Parliament.

Finance Minister Winston Dookeran made good on the PP’s pre-election promise to lay in Parliament the new Public Procurement proposals within one month of the election.

The level of political support for this initiative has been encouraging, but there is the issue of priorities to confront in this matter.

I am referring to the fact that the second part of the PP commitment to a new and effective Public Procurement system was that it was to have taken effect on the anniversary of the election.

That target has been missed and the work of the Joint Select Committee has been preserved so that it can proceed when the Parliament re-opens at the Waterfront.

The challenge we have to confront is the race to implement public projects in a manner which reminds me of the phrase I had coined for the last administration – ‘Project Fever’, like a new strain of political dengue.

The need to stimulate economic activity is something everyone appreciates and the perceived competition between Ministers is becoming part of the new reality.  Provided that there are effective local content provisions, the more projects the country is doing, means more work for our professionals, contractors, workforce and suppliers.  No one would argue against an increase in economic activity.

The problem is that, in the absence of proper controls, those short-term imperatives can lead directly to the dire long-term consequences which I referred to earlier.  The State now has to spend immense sums to clear up debts which arose during an earlier spending frenzy, with operatives, who would have all said at the time that this or that project was essential.

These frenzied moments of activity are the correct place for the application of real leadership in terms of the national priorities, particularly in relation to the issue of expenditure.  I am calling on Finance Minister Dookeran to make this issue of controlling expenditure a number-one priority in this budget.

Given that the ongoing flow of projects is strong and constant, a proposed program would look like this –

  • New Public Procurement policy – Minister Dookeran must make this new system an absolute priority with a firm commitment to have the new framework made law by the end of this session of Parliament, which is in December.  That is an indispensable part of building a new economy going forward and it would definitely be a manifestation of New Politics.
  • Embargo new projects – In relation to projects which are not yet at the stage of Requests for Proposals, there needs to be an embargo until the new Public Procurement system is in place.  There will be appeals that the struggle is for economic stimulus over proper process, but those must be dismissed.  There is no way you can get to the right place after making a wrong turn.  No way.  Everybody knows that.  Expediency taking precedence over principle has cost our country enormously, both in cash terms and lost opportunity.
  • Projects ‘in the pipeline’ – Projects which are already at the stage of Requests for Proposals must conform with the principles underlying the new Public Procurement proposals – Transparency, Accountability and Value for Money.

Without proper control over expenditure, we will continue to lurch from crisis to crisis.  We need to stabilize the economy and restore the importance of merit in our public decision-making.

Property Matters – The EFCL Query part 5

On Wednesday 21st September I received this letter dated 15th September from EFCL’s attorney together with the Confidentiality Policy Agreement I had requested on 5 September 2011 under the Freedom of Information Act.

As readers can see, this is exactly the document posted as part of the first story in this series, published in the Sunday Guardian on 9th July 2011.  Which means that my essential assertions remain unanswered in that staff who are forbidden to disclose the existence of an agreement would be unable to get external advice on it, without being in breach.  Which has the real effect of giving this document an oppressive flavour.

Of course it also puts into question the assertion in Lalla’s first letter to me, that this new EFCL policy was “…consistent with what obtains in many companies…” Literally unbelievable.  Obviously.

I can only hope that this policy was not approved by our Ministry of Education.

But we will revert to EFCL after the budget season…readers can draw their own conclusions.

Property Matters – The EFCL Query part 4

On Friday 2 September, the EFCL’s attorneys delivered to my office this letter dated 8 August 2011.

That letter was written by Larry N. Lalla who warned me in his opening paragraph that EFCL was concerned at the tenor of my articles on their Confidentiality Policy. (Parts 2 and 3 here.)

The letter ended by warning me that EFCL would meet any defamatory statements with legal action…seeing that he never said “…further defamatory statements…” or identified any such, this appears to be yet another waste of taxpayers’ money in an attempt to avoid answering my five original questions.

The intention here seems to be intimidation.

It is sad and ineffective, let me tell you why.

Sad, because, according to clause d. of EFCL’s Staff Confidentiality Policy Statement which was sent to me, employees are forbidden to reveal the terms of the policy or even its very existence.  Lalla’s letter states at 2. that EFCL’s Confidentiality Policy is “…consistent with what obtains in many companies…”.  Both of those cannot be true, since it is simply not the norm that a normal commercial company forbids its employees from even disclosing the existence of a policy.  Those provisions are not at all consistent with what obtains.

The sad part is that the only way to settle this is for EFCL to release its Confidentiality Policy, as I have been requesting.  They have been reluctant to do so, for whatever reason.

EFCL prefers to spend money to obfuscate and intimidate rather than just answer these simple questions, originally contained in my email of 1 July –

  1. Is there a new EFCL Confidentiality policy?
  2. When did that come into effect?
  3. Would you please provide a copy of that policy?
  4. Was that policy approved by the Board of Directors?
  5. Is the Ministry of Education aware of this new policy?

There seems to be an attempt to change the reality that all these State Enterprises are spending public money and therefore ought to be responsive to our reasonable requests.

Earlier today I made a request under the provisions of the Freedom of Information Act and we will see what happens next.

EFCL’s warning letter

efcl-lalla-letterYes, Readers, I received this letter from Larry Lalla, attorneys for the Education Facilities Company Limited (EFCL).

The letter was hand-delivered to my office this morning, although it is dated 8th August – over three weeks ago.

I sent this email in immediate reply:-

From: Afra Raymond <afraraymond@gmail.com>
Date: Fri, Sep 2, 2011 at 4:57 PM
Subject: EFCL’s Confidentiality Policy
To: kiran.shah@efcl.co.tt
Cc: ronald.phillip@efcl.co.tt, larry.lalla@gmail.com

Good Day to you, Mr. Shah,

A copy of EFCL’s attorneys’ letter dated 8th August was hand-delivered to my office earlier today and I will soon be replying to those points in public.

In particular, I noted the third point in that letter –

“3. EFCL remains at all times committed to the principles of transparency in all aspects of its operations.”

Accordingly, I am again requesting a copy of the EFCL’s Confidentiality Policy.

Of course I am publishing this, in keeping with our shared commitment to transparency.

Thank you.
Afra Raymond

Property Matters – Taking Stock

As part of this pre-budget series, I am going to ‘take stock’ of some recent, significant happenings in relevant areas.

Given the unstable situation in relation to the State and its operations, many examples of which have been set out in previous ‘Property Matters’ columns, it is very important that a critical stance be maintained.  That said, it is also important that any progress be properly recorded and acknowledged.

The notable items were –

Housing Development Corporation (HDC)

hdc-logo
I was very pleased to read of the success HDC was having in collecting the serious rent arrears owed by its tenants, reportedly in excess of $240M.  Of course this is not the first time there has been an effort to rectify this situation, so hopefully this will be a sustained program as it is vital that housing be treated with proper responsibility.  That responsibility would extend from the quality of the designs and construction, the treatment of contractors and suppliers all the way to housing policies which respond to the needs of the needy.

Last week, there was a report in this newspaper that the Housing and Environment Minister, Dr. Roodal Moonilal, disclosed a new housing policy.  According to that report, the new policy will favour distribution of serviced lots, with foundation slabs, over the provision of new homes.  I have been calling for a review of our housing policy for some time now, so it was very disappointing to read that Cabinet had recently approved this important new policy without some formal process of dialogue or seeking wider views, much less a thorough examination of the shortcomings of the 2002 policy.  Yes, a new housing policy was sorely needed, but there are solid benefits to wider dialogue.

Housing is too important an element of our Welfare State to ever become solely a creature of Cabinet, whatever the credentials of the current crop of Ministers.

This leads directly into my point about the poor flow of basic information, which can be detrimental to the best intentions.  The 2002 housing policy disappeared from the internet about 6 months ago, but despite several written requests I have had no success in having those links restored, for whatever reason.  The new housing policy is also not available online.  In contrast, last month the Ministry of Finance issued a revised State Enterprises Performance Monitoring Manual and that is available online, together with the 2008 Manual it replaced.

Building code

Dr. the Honourable Roodal Moonilal, Minister of Housing and Environment
Dr. the Honourable Roodal Moonilal, Minister of Housing and Environment

The impending new Building Code is to be welcomed, having been developed in collaboration with key stakeholders.  There needs to be a solid commitment by all parties to establishing proper enforcement of those critical standards.  The Building Code will cover important areas such as earthquake and fire hazards as well as other quality issues.

The initiative is being piloted by Dr. Roodal Moonilal, Minister of Housing and the Environment.  UDECOTT and the HDC both form part of his responsibilities, so that is a good fit.  We will have to be vigilant to ensure that all State construction conforms to the new standards.

I can scarcely believe that the very Minister who understands the importance of collaborating with stakeholders on the new National Building Code, would state a week earlier that the new Housing Policy had been agreed by Cabinet, with no visible attempt at consultation.  Incredible, but true.

A Culture of Consequence

I have consistently stated that the absence of consequence is inimical to any development and that consequence has to be restored to a proper place if we are to progress.   Up to last Thursday, 11 August, I stated at a public meeting that I was unaware of any government in this country taking decisive action against its own appointees in the State Enterprises.  The pattern has been one of charging people from the last political administration in what almost always looks like revenge.

Dawn Annamunthodo, former chairman of the National Schools Dietary Services Ltd. Photo © Trinidad and Tobago Guardian
Dawn Annamunthodo, former chairman of the National Schools Dietary Services Ltd. Photo © Trinidad and Tobago Guardian

The Sunday Guardian headline of 14 August ‘Cabinet fires Chairman of School-feeding Programme’ was as welcome as it was surprising.  It was reported that the Cabinet had taken decisive action to fire a Chairman who had been appointed about 6 months before and that is a positive step, the first time any government in this country has done that, as far as I am aware.

According to that exclusive story, the fired Chairwoman of the National Schools Dietary Services Ltd (NSDSL)—Dawn Annamunthodo – had obtained extensive and expensive security guards for herself, due to some alleged death threats.  There were also details of what seemed to be deceptive attempts by that individual to become a signatory to the bank accounts of that State-owned company.  If those reports are true, there are two serious implications –

Firstly, it is extremely unlikely that this is the first time that this individual was involved in acts of that kind.  Grown people do not just change their behaviour in a few months’ time, we all know that.  My point being that this episode calls into question the screening which is carried out in relation to these appointments.  Whatever screening processes now exist, will definitely have to be made stronger, together with ongoing reviews of Board performance.

Given that the Prime Minister is widely reported to have approved the Chairpersons of State Boards, that screening process needs to be reviewed urgently so as to preserve the integrity of that office.

Secondly, this individual is reported to have attempted to convince Republic Bank’s Ellerslie Plaza branch to make her a signatory and that matter must be promptly investigated by the Fraud Squad, with charges to follow if those allegations are true.  It is an echo of the point I made here last week about a dutiful police officer allowing a motorist with a defective vehicle to just drive-off after a ticket is issued.  Not good enough, if we are serious about road-safety.  We have to restore a Culture of Consequence if White-Collar Crime is to be challenged.

But, even though no money appears to have been stolen in that School-Feeding episode, the saddest part was the bold-faced question that individual asked the Guardian reporter, when invited to give a comment

How did you get hold of those documents? Those are state documents.   These questions are state business.

It reminded me very much of the response of Jewan Ramcharitar, former PriceWaterhouseCoopers partner, who suddenly resigned as eTeck Chairman almost a month ago.  That entire affair remains mysterious, with Stephen Cadiz, the line Minister, stating that it was due to a ‘difference of opinion’ and the departed Chairman reportedly stating –

I am actually working on a project in the public service arena on a full-time basis and my time at eTeck is eroding the time and attention I pay to that.

“Just what that project is, he won’t say.”

I wonder if Ramcharitar would have found that dismissive answer to be acceptable when he was a partner at PWC?  Probably not, yet we are continually beset by these evasive attitudes in public affairs.  We need to hold our leaders to a high standard.

The latest twist is the sudden resignation of George Nicholas as Chairman of Caribbean Airlines and the opaque statement by the Minister of Transport, Devant Maharaj – “…Yes. I can confirm this. I am in receipt of his letter but I cannot say anything more…”

In the three cases, bare-faced conflation of State Business with Business which is private, personal or confidential.

Good steps are to be recognized and applauded, but we must always strive for better.  We need to continue onward and upward.  It would be good to have a statement from the Minister of Foreign Affairs and Communications as to the governments’ commitment to a progressive policy in these important matters.  The Housing policy needs to be published for comment and we also need to have a clear statement as to whether there can be any such thing as a confidential state policy.

Confidential State Policy may seem like an oxymoron, but readers will be aware of the reluctance of the Education Facilities Company Limited to publish its new Confidentiality Policy.  I don’t want to say refusal, but when this budget season is over we will be continuing to examine those EFCL operations.

Property Matters – State Enterprise Accounts

State Enterprise Performance Monitoring Manual
In the next few weeks, this column will cover some of the issues which are likely to have a bearing on the 2012 Budget.

In my view the State and its Agencies must perform in an exemplary fashion if we are to progress.  A good example is worth a thousand words.

At page 22 of the 2010-2011 budget statement, the Minister of Finance said –

…Mr. Speaker, no coherent, co-ordinated planning or strategy for state enterprises exists.  As a result we have begun to rationalise the state enterprises, including the special purpose companies, which will incorporate a new accountability system that goes beyond the presently operating company ordinances. It is these loopholes in public accountability that resulted in the UdeCOTT scandal. This must never again happen in Trinidad and Tobago…

The Ministry of Finance has now published a new State Enterprises Performance Monitoring Manual 2011, it is over three times longer than the previous edition, so it will be something to consider in weeks to come.

Certainly, there are stricter requirements in relation to the filing of accounts – at pg 30 of the 2011 guidelines –

3.2.5 AUDITED FINANCIAL STATEMENTS

State Enterprises are required to submit the following:

  1. Audited Financial Statements (2 originals and 120 copies) to the Minister of Finance within four (4) months of their financial year end. These reports are to be laid in Parliament and subsequently submitted to the Public Accounts and Enterprises Committee for consideration;
  2. Copies of their Management letters issued by Statutory Auditors…

At pg 16 of the 2008 edition –

1.3.10 Publishing of Financial Statements by State Enterprises

Government has agreed that State Enterprises be required to publish in at least one (1) major daily newspaper a summary of the audited financial statements within four (4) months to the end of their financial year and a summary of the unaudited half-yearly statements within two (2) months of the mid-year date.

Such summary statements must be in accordance with the requirements of the Securities Industry Act, 1995.

The new guidelines appear to be stricter, but the requirement to publish to the press seems to have been removed.

There are swirling issues on this –

  • No accounts for years – As I have pointed out before, some of the largest State Enterprises have published no accounts for years.  UDECOTT and NHA/HDC are just two examples of this flagrant breach of the shareholders’ instructions as set out above. In the case of HDC, there is a greater concern in my view, since sections 18, 19 and 20 of the HDC Act require the audited accounts to be produced and published.  Anyhow you try to spin it, those are terrible signs.  For a private company to have no accounts, for even a few months, is indicative of poor performance at the very least.  No accounts for years is unacceptable.  One can only wonder how clearly could anyone plan if basic information is being obscured in this fashion.  We expect better from the chiefs of these State Enterprises and certainly we expect better from the Peoples’ Partnership.  In his preamble to the 2010-2011 budget, Minister Dookeran said –

…We must at all times remember who we work for. We must make Government work for the people.  As our Prime Minister always says: serve the people, serve the people, serve the people…

  • Serious debts outstanding – There are continuing reports, despite some efforts, that contractors, consultants and suppliers are owed substantial monies by State Enterprises for extended periods.  That has a disastrous effect on our local economy both on an immediate tangible level and in terms of the more subjective element of confidence.
  • Ambitious new projects continue to be announced, even as the basic accounts are incomplete and substantial bills remain unpaid.

Apart from the evident confusion, at the very highest levels of the State and Government, the unacceptable part is that there is not even an attempt to explain what is the hold-up or what areas of the accounts remain unresolved.  The few times anyone in authority has attempted to explain the delays in those accounts, it has been a model of vagueness and ambiguity.  That uncommunicative behaviour does not augur well.  These State Enterprises are not building a wartime bunker or a new spy satellite, only new homes and offices.

But there is more, according to S. 99 (1) of the Companies Act 1995

  1. every Director of a company shall in exercising his powers and discharging his duties act honestly and in good faith with a view to the best interests of the company; and
  2. exercise the care, diligence and skill that a reasonably prudent person would exercise in comparable circumstances.

Those provisions make mismanagement of a company an offence.  It is literally impossible to manage or direct the affairs of a multi-billion dollar company in the absence of audited accounts.  So there must be serious concerns as to how the Directors of those State Enterprises without accounts could have properly discharged their obligations under S. 99 (1).

SEC logoApart from these points, there is now the fact that the SEC has made Orders in respect of Contraventions of the Securities Industry Act 1995 and the Securities Industry Bye-Laws 1997.  Those Orders are in relation to the failure of these huge State-owned Enterprises to publish their accounts –

  1. 19th March 2010 against HDC, with fines totalling $121,000 – see http://www.ttsec.org.tt/content/pub100326.pdf.
  2. 15th June 2011 against UDECOTT, with fines totalling $120,000 – see http://www.ttsec.org.tt/content/Order-for-settlement-re-UDECOTT.pdf.
  3. 25th July 2011 against HDC, with fines totalling $400,000 – see http://www.ttsec.org.tt/content/Order-for-settlement-re-Trinidad-and-Tobago-Housing-Development-Corporation.pdf.

I was pleased to see the SEC taking this firm action against these offending State Enterprises, it is an important and necessary intervention.  I am not at all sure what, if any, ongoing penalties are being applied.  If there are no ongoing punishments or fines, this important regulator needs to take a tougher stand.  It is simply not good enough in my view for the regulator to levy these fines and allow the companies to carry on with ‘business as usual‘.  That would be like a dutiful policeman ticketing a motorist for smooth tires, no seatbelt and no headlights – issuing the ticket and then letting that motorist drive off.  The SEC needs to consider heavy daily fines and banning orders against Directors of these companies in breach of the law, if such do not already exist.

The era of irresponsibility in high office needs to be brought to a close.  The role of the Treasury in supporting this grossly irresponsible behaviour is questionable.  The silence on the missing accounts is intolerable.  The chapter of getting away with it needs to be ended.

Expenditure of Public money – Accountability – Transparency = CORRUPTION

Property Matters – The EFCL Query part 3

On Thursday 14th July, the EFCL published a full-page response to the first article in this series – it was also the same day that the second article in this EFCL Query was published.  Although it was comforting to see the clear statements on EFCL’s ‘speak out’ component, Whistle-Blowing policy and procedure and Fraud Policy, the central concerns are greater, if anything.

I deliberately used the word response, since no reasonable person could consider that advertisement to be a reply to my emailed queries.

If EFCL were really replying to my query, it would have been no problem to provide a copy of the documents and answer the simple questions.

EFCL’s preferred course of action is to spend more taxpayers’ money on expensive artwork and advertising, so the further question is ‘Why?’.

Considering that all I was doing was questioning the existence and origin of an important policy of this State-owned company, it is perturbing to be having this level of challenge in getting a simple clarification.

As I wrote in this space last week – ‘So, what is the secret?’

What could be the delay or difficulty in providing a copy of the EFCL’s Confidentiality Policy, as requested?

In the first article in this series, I posted the documents which had been passed to me.  The simple question is whether these are the genuine documents.  There was no attempt by EFCL to even answer that important query.

It is important because the EFCL advertisement told readers that “…Employees were not asked to sign under threat of dismissal…”

The first sentence of the preamble of the Staff Confidentiality Agreement is –

“All new and existing employees will be given a copy of this confidentiality policy and will be required to sign a confidentiality agreement at the time of hiring or during their service to the company.”

The emphasis is mine – yes, it reads ‘required to sign’.

But there is more, because the EFCL advertisement also stated that –

“Staff who asked for time to get external advice, were allowed to.”

However, clause 1 d. of the Confidentiality Agreement states –

“The existence of this agreement and its terms are confidential and none of the parties to this agreement may disclose anything about this agreement or its subject matter or implementation to any person except if required by law to do so.”

It is clear that the EFCL advertisement and the documents sent to me cannot both be true.

So, which is true?

Why did EFCL not send or publish the documents?

Quite frankly, it appears that EFCL is making a great effort to conceal or obscure its true policy on confidentiality, for whatever reason.

If this is the kind of effort being put into obscuring the elementary policy of this State-owned company, I can scarcely imagine their reaction to queries on particular projects, Directors’ benefits or tender procedure.

The behaviour of the State and its agents must be exemplary.  Public Officials have an obligation, in my view, to behave in a fashion which fosters trust and good order.

It is all starting to resemble a tangled web, sad to say.

Again, I hope that my doubts are misplaced.

SIDEBAR

Five simple questions for EFCL…

  • Is there a new EFCL Confidentiality policy?
  • When did that come into effect?
  • Would you please provide a copy of that policy?
  • Was that policy approved by the Board of Directors?
  • Is the Ministry of Education aware of this new policy?

Property Matters – The EFCL Query part 2

efcl-confidentialDespite the first column in this series, I have had no direct reply or even acknowledgement from any of the EFCL officials to whom my initial queries were directed.

It seems that the people concerned would rather not write, on this matter at least.  A meeting has been indirectly suggested, which of course would have to be properly recorded and minuted – no word on that meeting as I write again.

What could be the delay or difficulty in answering the five simple questions posed last week –

  1. Is there a new EFCL Confidentiality policy?
  2. When did that come into effect?
  3. Would you please provide a copy of that policy?
  4. Was that policy approved by the Board of Directors?
  5. Is the Ministry of Education aware of this new policy?

Four of those questions require basic yes/no responses, while only one requires a date.

I closed Sunday Guardian’s article by reminding readers of the equation

Expenditure of Public money – Accountability – Transparency = CORRUPTION

The elementary accountability of a public company having its policies available for the public to consider seems to be either lacking or of low priority in the case of EFCL.  As we move along, it will be interesting to see how the Transparency part of the equation works out.

In researching this article, it emerged that our country is a signatory to two relevant international conventions.  As I understand it, the effect of our State having become signatory to those agreements is that the country has adopted those standards.

The first one is the Inter-American Convention against corruption, which was signed by our country in April 1998.  At that time, UNC was in power, under PM Basdeo Panday.  At Article III, clause 8, we are obliged to

“…consider the applicability of measures to…create, maintain and strengthen…Systems for protecting public servants and private citizens who, in good faith, report acts of corruption, including protection of their identities, in accordance with their Constitutions and the basic principles of their domestic legal systems…”

The second convention is the United Nations’ Convention against Corruption, which was signed by our country in December 2003.  At that time, PNM was in power, under PM Patrick Manning.  At Article 8 – Codes of Conduct for Public Officials, clause 4 obliges us to

“…4. Each State Party shall also consider, in accordance with the fundamental principles of its domestic law, establishing measures and systems to facilitate the reporting by public officials of acts of corruption to appropriate authorities, when such acts come to their notice in the performance of their functions…”

So, what is the big secret?

I do understand that staff at companies like this can jeopardize the integrity and effective operations of the organisation by leaking certain confidential information.  That would be a proper concern of management and a confidentiality policy is one of the ways that could be dealt with, just one.

During the Uff Enquiry, UDeCoTT claimed several times that this or that document was confidential and used its lawyers to protest strongly, sometimes even seeking the protection of the High Court.  That was outrageous conduct by a state-owned company, which appeared to be trying to frustrate the Uff Commission, appointed by the State, by seeking to conceal documents.  A case of ‘the tail wagging the dog’.

This situation is one in which it seems that the dangers of leaks in relation to tendering estimates, for example, has been conflated to cover all information in the company.  It appears to be part of a new policy which does not conform to either good labour relations or our country’s international obligations with respect to Whistle-Blowers.

Given the electoral promises made by this government and the importance of the struggle to reduce the menace of corruption in our society, it is very important for us to be attentive to these matters.

UDeCoTT wanted to conceal certain documents and one had to wonder why, given that they are not involved in secret work.  If it was not so serious it would be comical, they are not a spying, military or health institution.  UDeCoTT is just a facilitator for erecting buildings, yet their chiefs were able to pretend to the public that a large part of what they did was confidential. That kind of secrecy could never be in the public interest.  Not ever.

Similarly with EFCL, one has to ask – What is the secret?  That organisation is responsible for the repair and maintenance of schools, using Public Money to do so.

I wonder if that document, which a number of EFCL staff have now been required to sign, is legal and binding?  Could it withstand a challenge in the Courts?  Did EFCL take proper legal advice in this matter?  Was that advice followed?

The legitimate interests of taxpayers require that the management of State Enterprises take proper steps to handle these integrity challenges – Does the EFCL Confidentiality Agreement achieve this?

There is a certain kind of way in which this episode with EFCL is starting to remind me of the early UDeCoTT grappling, before Uff and so on, with tremendous difficulty in getting basic dialogue going, shadow-boxing and bizarre positions being taken.

I really hope that I am wrong, because the correct, encouraging attitude to Whistle-Blowers is essential for the success of the larger Public Procurement agenda.