This article examines the recent Court of Appeal ruling that the THA did not have the power to enter certain PPPs as had been done in the MILSHIRV project.
In November 2011, the THA entered a Public Private Partnership with the Rahael Holdings group for MILSHIRV, a new office building at the corner of Claude Noel Highway and Shirvan Road in western Tobago. I was heavily critical of that project as it was clear to me that the basic principles of needs assessment had been violated, as detailed later in this article. Continue reading “Property Matters – THA BOLT Appeal”→
The first article in this series set out the background to these proposed bonds and the implications of the HDC’s perennial problem with bad property titles. The second drew parallels between these proposals and the roots of the 2008 Wall Street crash, with some references to Jamaica’s National Housing Trust and its contribution system as an alternative for financing affordable housing. This week I conclude by delving into the heart of the matter, the HDC’s finances and its performance in terms of its existing bond portfolio.
One of my persistent complaints against many of our State Agencies, including the HDC, is the long-term failure or refusal to publish proper audited accounts as required by laws and regulations. I am pleased to report that my requests for NHA/HDC financial statements from 2003 to 2018 were satisfied in April this year. Once again, I thank the exemplary officers at the HDC for their assistance. Even if this time I had to engage my attorney to send HDC a pre-action protocol letter before the financial statements were released and what is more, they have not refunded my legal fees.
Those financial statements are for the NHA from 2003 to 2005 and the HDC after 2005. This article is focused on these proposed bonds so the first point to raise is the status of those financial statements. Continue reading “Property Matters – HDC Housing Bonds Part Three”→
Afra Raymond’s presentation on “State-owned hotels as a development option for T&T: Lessons for Small Islands Developing States” at the ISTT Caribbean Land Conference 2019 – Surveying best practices towards the sustainable development of Caribbean SIDS, at Hilton Trinidad Friday October 11, 2019.
Programme Length: 00:25:20 Programme Date: 11 October 2019
“…In 2008 we had established what we called an HDC Unit in anticipation of 3500 mortgages from HDC within three years. Three years later we had to disband that Unit because the HDC did not have the titles that would afford mortgages…”
—testimony of TTMF’s then Managing Director, Ms. Ingrid Lashley, at pg. 126)
The most frequent question arising from last week’s article was in relation to this issue of bad titles on homes built by NHA and HDC, which made it impossible to finance sales via the traditional mortgage lenders. This requires an explanation before getting to the root of my concerns over the parallels with the US financial collapse in 2008 – the Wall Street meltdown which extended to have global consequences. Beyond that, I will draw on Jamaica’s National Housing Trust as an example of an alternative system of housing finance, less dependent on the agents of financialization now looming in the current T&T proposals. Continue reading “Property Matters – HDC Housing Bonds, part 2”→
This article will examine the proposed HDC Housing Bonds announced by Finance Minister Imbert in Parliament on Friday, 20 September 2019. The proposal is to borrow $1.0 Billion via bonds in various tenors offering investors tax-free returns of 4.5%. The funds raised are to be used for purchasing HDC homes, which was stated to be of importance in addressing critical financial challenges in that State Agency.
Afra Raymond has a public meeting on affordable housing and questions whether the government is actually serious about proving affordable public housing based on the track record of high end and expensive construction projects over the last decade and a half.
Sad to say, but this bitter, bizarre HDC/CGGC contract and its reported cancellation requires that my Season of Reflection closes with further, more blatant, counterfactuals. Last week I quipped about the amazing scenes we were witnessing in this episode, but the more recent statements denote a sharp descent.
This recent barrage was an epic of Carefully Crafted Confusion.
For example, the important issue of whether the Attorney General advised on the contract has been serially evaded.
“...Mr. Indarsingh: Thank you, Mr. Deputy Speaker. Can the Acting Prime Minister state whether this contract for over half a billion dollars was vetted by the Attorney General of Trinidad and Tobago?
Mr. Deputy Speaker: I will not entertain that question at this time, Member…”
(pg 10)
“…Mr. Rodney Charles (Naparima): Thank you, Mr. Deputy Speaker. Can the Acting Prime Minister state whether any due diligence by the Office of the Attorney General was undertaken prior to the signing of the Framework Agreement between the China Gezhouba Group International Engineering Company and the Housing Development Corporation on July 13, 2018?
The Acting Prime Minister and Minister of Finance (Hon. Colm Imbert): Mr. Deputy Speaker, I am advised that the framework agreement did not require the Attorney General to give an opinion on the contract.
Mr. Charles: Thank you, Mr. Deputy Speaker. Is it the norm for state enterprises to enter into contracts in the order of this magnitude without reference to oversight by either Cabinet or the Attorney General?…
Hon. C. Imbert: Mr. Deputy Speaker, firstly, the Housing Development Corporation is a statutory authority, it is not a state enterprise. It has its own rules according to statute, and the Housing Development Corporation does have the authority to determine its own contractual affairs…”
(pg 15)
In the first case, the Deputy Speaker refused the question and in the second, the Acting PM simply said that the AG’s advice was not required. As yet, we have no idea if that advice was sought and provided. Did the AG advise? Yes or no?
Another aspect of this is that, as a Statutory Corporation, HDC is governed by its Act, which states at clause 12 –
“…12. The Minister may give to the Board directions in writing of a specific or general nature to be followed in the performance of its functions or the exercise of its powers under this Act, with which the Board shall comply…”
Clearly, HDC is legally bound to comply with any lawful instructions from its line Minister, so any statement to imply its independence is simply false and misleading.
I was intrigued by these parts of Dr Rowley’s statement –
“…The PM said Cabinet was unhappy with some aspects of the contract, including a conflict between the plan to sell apartments (which people may not be able to afford) and Cabinet’s desire to build rental units. He also lamented the old deal would have required the HDC to get help from several ministries and may have been too accommodating to a foreign entity…”
Could it be that we will see a move towards affordability and rental units?
Dispute Resolution
At pg 17, clause 1.4 states that –
“…The contract shall be governed by Law of Republic of Trinidad and Tobago…”
Apart from the awkward phrasing, that is sound.
At pg 34, sub-clause 20.6 states that –
“…Any dispute, controversy or claim arising out of or relating to this contract…shall be referred to and finally resolved by Arbitration under the rules of Arbitration of the International Chamber of Commerce…the arbitration award shall be final and binding upon both Parties…the place of Arbitration shall be London, England…the arbitration shall be conducted in British English…”
So far so good, but there is more.
The contract contained two payment guarantees. The first, in which the HDC guaranteed the full sum due to CGGC, and in the second of which HDC guarantees the retention held in respect of defects etc. Both those guarantees specify –
“…This guarantee shall be governed by the laws of the People’s Republic of China and shall be subject to the Uniform Rules for Demand Guarantees, published as No 758 by the International Chamber of Commerce…”
Given that our Public Money was to fund this huge project and support these guarantees, it is unacceptable that the governing law was not our own. Quite apart from the issue of the governing law, it is striking that these solid guarantees are seldom, if ever, enjoyed by local contractors.
ADDENDUM: Who signed what?
The Framework Agreement of 13 July 2018 was signed by HDC’s Managing Director, Brent Lyons (pg 11).
The Contract Agreement of 17 May 2019 was signed by HDC’s Chairman, Newman George (pg 6).
Afra Raymond was interviewed by Fazeer Mohammed on TV6’s Morning Edition on Thursday 19th September 2019, on affordable housing in light of the upcoming T&T budget. His insights, particularly into the Housing & Construction sector, were examined. Video courtesy TV6
The previous article opened with news of the unexpected and welcome cancellation of the huge HDC/CGGC contract to design and build 5,000 new apartments.
The barrage of stories on this issue in the last week has left one phrase ringing in my mind, VS Naipaul’s sardonic wit in his ‘independence novel’, A House for Mr Biswas – “…amazing scenes were witnessed when…”.
Two essential elements of the Season of Reflection are shown in the addenda –
On Thursday, 5 September 2019, the PM announced at the post-Cabinet media briefing that the large-scale HDC contract with China Gezhouba Group Company (CGGC) for 5,000 new apartments was now ‘cancelled’-
…That contract was reviewed extensively by the Cabinet and it has been stopped. HDC has been instructed to go back out to tender because there were some parts of that contract that did not meet Cabinet’s acceptance and approval, both structurally and legalistically. That contract has been stopped.
So, Cabinet has reviewed this contract (after its execution!) and has now cancelled it so as to re-tender and proceed in accordance with proper standards. Sad to say, a straight reading does not count for much in these matters. This is where we are, that is all.
The previous article explained the several serious aspects which were wrong with that HDC contract. In my view the entire contract was wrong, even if no laws were broken and all the necessary protocols were observed. ‘rong like a Crix Biscuit and this article will explain exactly how. Continue reading “Property Matters – In-Dependence? Part two”→
I am pleased to report that my requests for NHA/HDC financial statements from 2003 to 2018 were satisfied in April this year. Once again, I thank the exemplary officers at the HDC for their assistance. Even if this time I had to engage my attorney to send HDC a pre-action protocol letter before the financial statements were released and what is more, they have not refunded my legal fees.
Afra Raymond’s presentation on “State-owned hotels as a development option for T&T: Lessons for Small Islands Developing States” at the ISTT Caribbean Land Conference 2019 – Surveying best practices towards the sustainable development of Caribbean SIDS, at Hilton Trinidad Friday October 11, 2019.
Afra Raymond was interviewed by Fazeer Mohammed on TV6’s Morning Edition on Thursday 19th September 2019, on affordable housing in light of the upcoming T&T budget. His insights, particularly into the Housing & Construction sector, were examined. Video courtesy TV6
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