Category: Property Matters

Healing our capital’s Heritage buildings

I had intended to write on the Heritage Buildings in our capital for some time, but the UDeCOTT scandal and other public concerns kept me occupied.  The recent shocking collapse of a major part of President’s House eventually acted as a trigger for this article.  As I said at the time, that was a shame and a natural result of seriously misplaced priorities.

“The failure to repair or maintain so many essential buildings is a tragic symbol of our disdain for history and the simple sense of proper maintenance.”

The present position of the Heritage Buildings is one we can only make sense of by adding some context.  In my view, the background to the present situation is –

  • Economic Boom – We are at the tail-end of a 15-year-long and unprecedented boom in our national revenues.  No one could have predicted the huge growth in national fortunes.
  • Construction Boom – There has also been a corresponding boom in construction activity in our country with a large number of new buildings erected in that period.
  • ‘Monumental Architecture’ – Within that building boom, there has been a series of new buildings which could be classed as a modern thrust toward monumental architecture.  That phrase is used here to describe buildings which are long-lasting landmarks of a civilisation, by virtue of their location, size and use.  The recent examples of this Monumental Architecture are Piarco Airport Terminal, NALIS (National Library in POS), Prime Minister’s Residence and Diplomatic Centre, National Academy for the Performing Arts (NAPA, North), International Waterfront Centre.

Some of the Heritage Buildings in our capital have benefited from repair and renovation and those would include –

  • QRC restoration – The main eastern building has now been refurbished at a reported cost in the region of $44M.  This job took longer than expected and cost an extra $10M over the original budget of $34M, but it is a welcome sight, especially when floodlit at night.
  • Knowsley restoration – This was done recently and the program of works included the addition of a new block in the south-eastern corner of the site.  This building was formerly the Ministry of Foreign Affairs, but they have recently moved to the International Waterfront Centre.  The expanded and renovated Knowlsey is to become the new home of the National Museum, which is still at its original location, the Royal Victoria  Institute on the corner of Keate and Frederick Streets – see http://www.newsday.co.tt/news/0,115008.html.
  • Former Shell Sports Club – This is at the corner of Queen’s Park West and Cipriani Boulevard and is now under Petrotrin.  The building was restored over a long period at what must have been great expense and now that it has been completed about a year or so ago, it appears to be unoccupied.
  • Police Headquarters – This is at the corner of St. Vincent and Sackville Streets and was badly damaged during the 1990 coup attempt.  The building was repaired and renovated at great expense, but is now showing signs of poor maintenance.

There have also been these significant failures –

  • Mille Fleur – This is one of the ‘Magnificent Seven’ along Maraval Road. It was leased to the Law Association, which was revoked in 2004 by the State when they did not carry out the required repairs.  The building was then placed under the control of UDeCOTT for repairs and refurbishment, but there has been serious deterioration in its condition and no sign of the necessary work.
  • Stollmeyer’s Castle – This is the northernmost of the ‘Magnificent Seven’ and is also in poor repair; it is also said to be under the control of UDeCOTT for repair and refurbishment.  According to UDeCOTT’s website, both these projects were to have been completed in ‘late 2008’ – see http://www.newsday.co.tt/news/0,51637.html.
  • Boissiere House – This is on Queen’s Park West, about midway between All Saints’ Church and Cipriani Boulevard.  It is in poor condition and was the subject of the “Save the Boissiere House” campaign, which drew the State into negotiations with the property owners.  Those negotiations appear to have failed in terms of agreeing a price and the building continues to deteriorate.
  • National Museum Building – The original Royal Victoria Institute building is still in use and one hopes that it will not be allowed to fall into disrepair.

The failure to repair or maintain so many essential buildings is a tragic symbol of our disdain for history and the simple sense of proper maintenance.

These are the Heritage Buildings which really need urgent and high-quality attention –

  • Red House –
    The Red House
    The Red House

    This is the seat of our Parliament and it is a true failure of repairs and maintenance.  There has been an ongoing repair/replacement of the Red House roof for at least 10 years. There is an immense scaffold which is occasionally relocated and the project literally seems to have no end.  In addition to the roof repairs, which were originally being undertaken by NIPDEC, there is an ambitious program of Red House works set out on UDeCOTT’s website at http://www.udecott.com/index.php/cc/cc_project_item/restoration_of_the_red_house/.  Our Parliament deserves a no less than a solid restoration job and a proper maintenance program.

  • Trinidad Public Library –
    Trinidad Public Library
    Trinidad Public Library

    This historic building, at the corner of Knox and Pembroke Streets, is in a sad state of disrepair.  It is in need of a serious program of repairs and renovation.

  • President’s House –
    President's House
    President's House

    The western wing of the official residence of the Head of State of our Republic collapsed through lack of maintenance. President’s House is alongside the spanking-new, elaborate Prime Minister’s Residence and Diplomatic Centre, recently opened at a cost in the region of $200M.  This building has not been properly maintained for a long time and it was shocking to hear Colm Imbert stating to the media that it had been declared unsafe about 10 years ago.  Even the parts of the building which are still standing are now also condemned.  There had actually been official functions taking place there up to the day before the collapse.

President’s House has to be a priority project for high-quality repair and renovation.

SIDEBAR: A legal and financial framework

We do not have a legal and financial framework which will preserve our architectural heritage.  The Planning and Development of Land Bill (1997) piloted by the last UNC administration contained provisions which would have addressed many of the issues highlighted in this article.

We need to re-start our discussion on national development, including property and housing.  That discussion must include a place for our built heritage.

Learning the Lessons: Part 4

Last week I promised readers some details of the scale of the failure at the HDC and UDeCOTT.

The failure is systemic and exists at every level.

“That is nothing less than scandalous and deceptive behavior from those we trusted with our national wealth. It is like doing a business plan to open a ‘Chicken and Chips’ outlet and leaving-out the cost of the chicken. Bogus.”

The Special Purpose Entities (SPEs) were established to achieve a more rapid rate of national development.  The idea was that we, the public, would benefit from the ‘best of both worlds’, so to speak, in that the ‘best practice’ of the private sector would be used in the SPEs to satisfy the requirements of the public for better roads, housing or other goods or services.

Starting at the level of underlying purpose of these SPEs –

  1. HDC was established in 2005 as the successor agency to the NHA.  The target set in the 2002 National Housing Policy is for 100,000 new homes to be built in a decade, but that annual target was reduced in the first year to 8,000.housinginside

    In the seven years between 2003 and 2009, there should have been an output of 56,000 new homes, but the total output claimed was repeatedly given by the PM and the Minister of Planning, Housing and the Environment as being about 26,000.  In March, I publicly challenged the accuracy of those claims and the new MD of the HDC, Jearlean John, released revised figures – see http://guardian.co.tt/news/politics/2010/03/28/unc-claims-hdc-voter-padding-opposition-strongholds-marginals – which showed a total of 15,394 new homes built in the period.  An annual average of about 2,200 new homes, about a quarter of the reduced target.

    That is at least 10,000 less new homes than the HDC’s chiefs had been claiming.  What trouble is this?!  Now, at the same time as we thanked Ms. John for setting the record straight, just try to imagine the record-keeping and integrity of an organization which could repeatedly overstate its achievements in this fashion.

    That is the scale of the problem.

  2. UDeCOTT’s mission is to develop the structures that form part of Vision 2020 and which “…will be achieved in accordance with…commercially viable principles…” – see http://www.udecott.com/index.php/cc/cc_sub_level/C6.  Those claims are equally baseless, since Calder Hart admitted under my cross-examination that only one of UDeCOTT’s many projects had been the subject of a feasibility test.  Only one.  That was the International Waterfront Complex and my further questioning revealed that the value of the land had been omitted from the equation.  That is nothing less than scandalous and deceptive behavior from those we trusted with our national wealth.  It is like doing a business plan to open a ‘Chicken and Chips’ outlet and leaving-out the cost of the chicken.  Bogus.  Our PM went to great lengths when he addressed the Senate on 13th May 2008 to point out that UDeCOTT’s projects were all approved by Cabinet, after a thorough review process – see http://www.ttembassy.org/051308.htm.  Additional claims were also made as to the ways in which Cabinet monitored UDeCOTT’s operations.  As I wrote in this column, early in my critique of UDeCOTT – There is either a sobering naivete or a lack of rectitude in the highest chambers in our Republic.

    That is the scale of the problem.

In both cases, we are witness to fundamental dishonesty on a huge scale.

Moving on to the findings of the Uff Report –

Looking at the controversial Cleaver Heights project, at para 25.30, the Report states

“…The absence of a written contract was put in context in the cross-examination of Minister Dick-Forde when she confirmed advice from HDC to the effect that none of their large projects and none of the small projects either had a signed contract .   It was subsequently confirmed that as at January 2009 HDC had 64 large projects ongoing and 591 small projects, none of which had a signed contract. Large projects were those over $50m in value. Thus, while there appeared to be no good reason why a formal contract was not signed between NHA and NHIC, it seems clear that to have done so would have been a highly unusual step and one which was presumably regarded, both by NHA and HDC, as unnecessary.…”

Not one HDC contract has been formally drawn up or executed.    Not one.

My colleague, Ken Ali, put out a hard-hitting exclusive on the ‘HDC’s Silent Projects’, published in last Monday’s Guardian at http://guardian.co.tt/news/general/2010/04/26/capacity-firms-weak-non-existent.

UDeCOTT was also involved in its own widespread and unconventional practices, namely ‘back-fitting’ of data, as described in the sidebar.

On the blighted Brian Lara Cricket Academy (BLCA), being built by Hafeez Karamath Ltd. (HKL), we are told –

  • Para 16.16 – referring to advance payments to the contractor –

    “…As a result money was advanced in circumstances which do not appear to have been governed by any ascertainable rules and amounted effectively to very substantial loans to HKL. Such a procedure is quite unique in the experience of the Commissioners. It calls for explanation but none has been offered…”

  • Para 16.17 – referring to UDeCOTT’s accounting system –

    “…UDeCOTT’s administration and recording of the payment process was “appalling” and required a great deal of detective work to get to the bottom…”

  • Para 16.21 – referring to UDeCOTT’s attempts to explain its management of the BLCA –

    “…does not by any means explain why UDeCOTT staff had gone to such extraordinary lengths to ensure that HKL was paid as soon as the money became available; why UDeCOTT was seemingly so anxious to make payments substantially beyond the value of work carried out (and in circumstances where the contractor was already in default such that TAL had long since recommended termination); and why UDeCOTT chose to disregard the opinions of the appointed engineer (TAL)…”

  • Para 12.45, citing the work of MacCaffrey –
    1. Of 79 Certificates issued for advance payments, 39 were wrong in relation to the sum for payment of advance payment, 60 were wrong in relation to the amount of advance payment made to date and only 4 out of 79 correctly recorded the advance payment and the amount of repayment.
    2. UDeCOTT’s contemporaneous reporting of advance payment is materially wrong (i.e. under-reported) by tens of millions of TT$ for the vast majority of the duration of the project.
    3. UDeCOTT decided to back-fit Payment Certificates in February 2008. Those back-fitted Certificates also materially under-reported the amount of advance payments made. All the back-fitted Certificates have been endorsed by at least two signatories and in some cases three.

Little wonder that UDeCOTT’s audited accounts have not been published since the end of 2006.

The Cancerous Cozy Consensus

Given the scale of the bobol revealed in this single Enquiry, one can only wonder what else is taking place at other SPEs.  The relationships are so cozy that one seldom, if ever, hears of anyone being made to repay the monies stolen or even face the Courts.  I am repeating my call that it is time for us to review the performance and proper role of the SPEs.

It might also be useful at this stage, for those of us who exist in the ‘comfort zone’ of private sector superiority to reflect on how seldom, if ever, we act against ‘White-collar’ crime.

SIDEBAR: ‘Back-Fitting’ of Financial Documents

One of the hidden practices of UDeCOTT which was revealed in the Uff Report was that of ‘back-fitting’ of payment certificates so that various erratic and unsupported payments could continue, all under the veil of accountability.  For readers who are unfamiliar with this sort of practice or surprised that such could be the practice at the ‘best-performing SPE’, they might find it easier to understand if the colloquial phrase is used…Yes, ‘Ratchefee”…

Learning the Lessons of the UDeCOTT fiasco: Part 2

There has been a powerful and positive response to the first column in this series.  The reflections continue, as they must.  No time for distractions, in this election season.

Last week I paused with the promise to spend some time examining the Special Purpose Entity (SPE) model and its role in national development.  This week, I continue the reflection with focus on the Directors of these companies as key players in the sector.

One of the fascinating aspects of the Uff Report is its discussion of the nature and extent of the independence of the Special Purpose Entities.  Obviously, that discussion was mostly focused onto UDeCOTT and the reporting relationship with its line Ministry.

Some main points would be –

  • Multiple Directorships –
    Calder Hart. Photo courtesy Trinidad Guardian
    Calder Hart

    One thing which is clear from the Calder Hart episode is that one individual had control of a vast slice of State resources.  Hart was Executive Chairman of UDeCOTT, Chairman of the Home Mortgage Bank, Trinidad & Tobago Mortgage Finance, the National Insurance Board (NIB) and the National Insurance Property Development Company (NIPDEC).  He obviously enjoyed a tremendous level of confidence at the very highest levels of government.  It is equally clear, from the Uff Report, that that confidence was woefully misplaced.  Even in the early days of ‘Corporation Sole’ we have never had an individual invested with so much power.  It seems that this individual never had to answer to a Chairman, since he was head of all the Boards he sat on.  Is that a healthy precedent?  For those who would be quick to say that he has been found guilty of nothing, please note that this is the same individual who described himself to the Uff Commission as  –

    Q.      Yes.  But your lawyers misdescribed you in these proceedings as a financial expert.  You would not agree with that description?
    A.       I would not describe myself as an expert of anything.

    See – ‘End-notes on the Uff Commission‘ at http://www.raymondandpierre.com/articles/article77.htm

    Yes, that is the same individual who stated, under oath, that all outstanding issues with the audited accounts of UDeCOTT had been resolved and that we could expect those in February 2009. Yes, that is the man who was in charge of our national savings and pensions.  And yes, I will write it – He could not do such in Canada.  I am saying that no single individual could properly discharge all those functions.  No way.  The fact that so much trust was reposed in that particular individual is indicative of a distorted sense of values.  Time to think again.

    A similar set of contradictions exist with the outspoken Independent Senator, Michael Annisette.  See – https://afraraymond.wordpress.com/2008/01/12/an-unhealthy-choice/.  Incredible as it might seem, Annisette’s position is even more complicated than Hart’s.

  • Over-burdened Directors – Quite apart from the particular issues which beset these two individuals, there is broader issue to consider.  Do  we draw our Directors and leaders from a sufficiently broad cadre of people? In terms of both the State sector and the private sector, it seems to me that we have similarly narrow channels from which we make these appointments.  I am not at all sure that the private sector can claim a superior method or results in terms of over-burdened Directors.  The result, as was clearly the case at UDeCOTT, can be a poor quality of strategic decision-making and lax oversight of the company’s affairs.  That is a sorry result, given that those are core Board functions.One key lesson we should be able to draw from this is that there is no way people can function with this level of multiple responsibilities.  We now need to develop a new set of guidelines for these important roles.  The UDeCOTT episode must not only be used to critique the public sector, for there are surely examples of over-burdened within the private sector as well.
  • Under-development of our society – A paradoxical aspect of the situation is that the thrust to rapid development is given as the rationale for the Special Purpose Entity, yet the method of deployment is somewhat counter-productive.  I am saying that the cadre of people from which we draw our Directors and leaders needs to be wider if we are really to develop our potential as a nation.  That also applies to the private sector, since the prevailing instinct seems to be that we pick people with whom we are comfortable for these leadership positions.  Very understandable, whether we are speaking about the public or private sectors, but the act of restricting the ranks of leaders is itself inimical to our development.
  • The proper role of the State – I am also saying that the State must behave in an exemplary fashion.  That is very important, given the corrosion of proper standards we are living through.  The State has an indispensable role to play in national development and that is not just limited to  construction.

What we saw at UDeCOTT was rampant expediency, with good management and internal controls being violated at every turn.  All in the interest of achieving targets and developing the country.  Huge contracts granted via sole selective tendering, without competition. That means they gave the contracts to their chosen contractor and consultants.  Yes, just so.  Huge payments made before works were done or materials purchased.

Yes, expediency was allowed to eclipse good governance and accountability.  The interest of the taxpayer was jeopardised, supposedly all for the benefit of said taxpayer.

We can now soberly put the question – ‘What was it really all for?‘

SIDEBAR

The Ordinary citizen

I am also asking that our Prime Minister give details of his conversation with Calder Hart.  Of course, one does not seriously expect an answer.  That, too, is a big part of the problem we are trying to probe with only our wits and words.

UDeCOTT’s Audited Accounts

This column is to be published on 22nd April, four weeks after Jearlean John held her first meeting with the UDeCOTT Board.  Readers might remember that Ms. John, citing her adherence to good standards of governance and professional conduct, promised to publish UDeCOTT’s audited accounts.  Those were last published at the end of 2006.  No accounts for 2007, 2008 or 2009.  Worse yet, no explanation at all.  I have had to dismiss some absurd attempts to explain that the delay has been due to the Uff Commission itself.  Those attempts emanated from a member of the Cabinet who definitely ought to have known better.  Ms. John is now making me wonder ‘What is the mystery?’ Is this one of those cases which gave rise to our folk saying ‘More in the Mortar than the Pestle’?

VIDEO: First Up Interview – 17 March 2010

VIDEO: First Up Interview – 17 March 2010

Afra Raymond sits with Fazeer Mohammed and Jessie May Ventour to discuss, among other things, the “battle” between the Government & the construction industry in Trinidad and Tobago. Video courtesy CNMG

  • Programme Air Date: Wednesday, 17 March 2010
  • Programme Length: 0:38:03

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VIDEO: First Up Interview – 09 March 2010

VIDEO: First Up Interview – 09 March 2010

Afra Raymond sits with Fitzgerald Hinds and Jessie May Ventour to discuss an updated in-depth look at UDeCOTT subsequent to the resignation of its Executive Chairman, Calder Hart. Video courtesy CNMG

  • Programme Air Date: Tuesday, 9 March 2010
  • Programme Length: 0:43:23

Preparing for the worst – Some implications of a major earthquake on Trinidad & Tobago

Earthquake damage in Port-au-Prince, Haiti. Photo courtesy BBC.
Earthquake damage in Port-au-Prince, Haiti. Photo courtesy BBC.

We have all looked on in horror at the scenes of destruction and human suffering, experienced by our Caribbean neighbours in Haiti as a result of the strong earthquake on 12th January. Coming after the horror and attempts to assist, my mind shifted to the possibility of such a disaster in our country. That prompted me to attend the seminar organized by the Association of Professional Engineers of T&T (APETT) and the T&T Contractors’ Association (TTCA) at Crowne Plaza on Wednesday 3rd February. The seminar was excellent and such was the content that this week I am setting aside the other important matters with which I have been dealing.

The Structural situation

We heard several presentations from engineers and the President of the TTCA which set out the structural situation. Some of the main points emerging there were that we are at significant risk because –

  • “An approved national building code does not exist at this time, designers use building codes with which they are familiar,” Darryl Thomson, a standards officer at the Trinidad and Tobago Bureau of Standards (TTBS), said during his presentation.
  • “I would think generally we are not (prepared) and we need to seriously look at what we are doing and change the way we do business where the built environment is concerned,” President of TTCA, Mikey Joseph said.
  • Past-President of APETT, Mark Francois, told us of estimated multi-billion dollar damage to buildings if a natural disaster were to hit our main cities. “Potential building economic loss … in Port of Spain was of the order of US$5 billion and in San Fernando US$6 billion” Francois said. Francois went on to make 3 other important points – firstly, as a former British colony, our professionals had used British Standards up until the late 1960s, with the risk to us being that, since the British Isles are not prone, those standards did not take account of earthquakes. As a result, he stated that major parts of our civil infrastructure, upon which we would rely in a disaster, were not designed or built to withstand earthquakes. His example of the POS General Hospital being one such structure was sobering. Secondly, he stated that building plans are being certified by engineers who do not posses the necessary qualifications in structural work and that he had done assignments to re-design some of those ‘certified’ plans. Thirdly, he dealt with the well-known practice of engaging personnel employed with the regulatory authorities to draw plans for buildings and obtain permission. This begs the question as to how could a public employee on such a ‘PJ’ fail to pass their own plans.

These quotes were drawn from the Trinidad Express story on Friday 5th February – http://www.trinidadexpress.com/index.pl/article_news?id=161591595 .

The Seismic situation

The speaker on this aspect was Dr. Walter Salazar, Senior Research Fellow at the Seismic Research unit at UWI. The three main points from his presentation were firstly, that our country is indeed at similar risk as Haiti in terms of a strong earthquake. Secondly, the most likely areas for the strongest earthquakes are Tobago and the north-west peninsula of Trinidad, particularly Chaguaramus. Thirdly, we are now overdue for that strong earthquake.

The disaster-preparedness situation

The head of our Office of Disaster Preparedness and Management (ODPM), Col. George Robinson has confirmed, in light of natural public concerns, that our systems are in place to deal with such an earthquake. Knowing the individual, there is little doubt in my mind that the necessary diligence has been applied to developing solid systems.

What is the likely financial impact?

My concerns as to our level of earthquake-preparedness are rooted elsewhere and that is at the level of the ‘financial safety-net’ upon which we would rely in the event of such a disaster. Our low national savings rates have long been a concern of economists/financial experts. We do not save enough money, in the view of these experts, to propel our country’s journey to the next level of national development. My concern is the implied question of how we would cope with a destructive earthquake.

Add to that the fact that only a small fraction of our buildings are properly insured and a worrying element to the disaster-preparedness picture starts to emerge.

Aside from the structural concerns and seismic risks as outlined above, there is a question as to the nature and extent of our financial safety-net. Where will we find the money to rebuild? Our lending institutions need effective systems to ensure that the properties they hold as security are properly insured.

Such an earthquake would also damage our infrastructure – roads, water and electrical distribution systems, drains and so on.

As a consequence, even if your own property is undamaged or properly-insured, you could also suffer from the wider damage. If your entire neighbourhood is severely-damaged, apart from the issue of loss of life and physical injury, there would be a negative effect on the value of your property.

This issue affects everyone.

Some suggestions

I am suggesting that this is an issue which needs our urgent attention and that the private sector can take the lead. The Association of Trinidad & Tobago Insurance Companies (ATTIC) and the Bankers’ Association of Trinidad & Tobago (BATT) can take a leadership position here. One way forward could be for the insurance and banking sectors to agree, in their self-interest, a minimum code for design and construction with APETT and the TTCA. That would be one way to set a benchmark in terms of proper standards for all financed or insured construction going forward.

In terms of existing privately-owned building owners, the Central Bank should consider adding a component on the importance of proper insurance to their National Financial Literacy Programme.

The other urgent requirement is the retro-fitting of our major public buildings to meet the challenge of these overdue earthquakes.

Thank you to APETT and the TTCA for organising this important intervention.

PODCAST: RICS Americas Interview – 14 January 2010

PODCAST: RICS Americas Interview – 14 January 2010

RICS logo
This is a podcast Afra Raymond did while in New York on Thursday 14th January at the offices of RICS Americas, the regional HQ of the international professional body, the Royal Institution of Chartered Surveyors.

As you will hear, Afra Raymond was speaking from his positions as a Chartered Surveyor, Managing Director of Raymond & Pierre Limited and of course, President of the Institute of Surveyors of Trinidad & Tobago. He focused on 2 matters

  1. the new Property Tax recently passed by our Parliament and,
  2. the Uff Commission of Enquiry into the Public Sector Construction Industry.

He concluded by reminding listeners that the RICS’ principal cause was that of “serving the public interest” and that that was one of the main engines for him as a campaigning surveyor.

  • Programme Date: Thursday, 14 January 2010
  • Programme Length: 0:05:34

End-notes on the Uff Commission

The Uff Commission ended its hearings last week, amidst even more ‘amazing scenes’.

There are so many examples to draw on, but here are a few choices –

  • Dr. Keith Rowley, MP. Photo courtesy the Trinidad Guardian
    Dr. Keith Rowley, MP

    Cleaver Heights missing money – The entire reason this HDC project was included on the Uff Commission’s agenda is PM Manning’s $10M question to his former Housing Minister, Dr. Keith Rowley ‘Where the money gone?’ After months of evasion, the purging of an HDC Board, the resignation of the HDC’s CEO and the rustication of the UK-based expert, Gerry McCaffrey, the truth is out.  No money missing. Simple so. Given the denials by Noel Garcia, the then-CEO of the HDC, and his principal assistants, the question remains who informed the PM of that missing money. I do not expect our PM to either apologise to or re-appoint Dr. Rowley.

  • Cleaver Heights contract type – Another point which emerged recently is that Cleaver Heights started off as a Design, Finance and Construct and became a modified Design/Build contract without a financing component, seemingly without a corresponding adjustment in the contract sum.  If that is the case, it would be grounds for serious concern.
  • Carl Khan – The ‘surprise witness’, Carl Khan was unchallenged by either Calder Hart’s or UDeCOTT’s attorneys.  They adopted the ambiguous course of trying to cast doubt on that testimony, but yet declining to cross-examine Mr. Khan.  It seems that these attorneys are so ‘bright’, they want to have their dinner ‘both boiled and fried’.  We not so easy to destabilise.  We too have eyes.
  • The new creature – Lastly, it is interesting to consider the new creature all of this has laid bare.  There is now a species of Super State Enterprise, who seem to enjoy an exemption from the rules, norms and guidelines which would apply.  A State Enterprise which can mount a legal challenge to a Cabinet decision and the President of the Republic.  Imagine that.

More questions than answers – The open process adopted by this Enquiry was refreshing, so much so that it has yielded a real ‘windfall’ in terms of public awareness.  Even the least-interested or most-loyal citizens are now aware that something huge is wrong here.  We now see that our PM dismissed a Cabinet Minister on grounds which have all proven baseless, yet continues to publicly defend one of his key lieutenants, whose behaviour is now revealed to be questionable.  That outcome would have been entirely unthinkable to the government at the outset of this bizarre year.  It is a prime example of the Law of Unintended Consequences.

‘Who is Calder Hart?’

Calder Hart. Photo courtesy Trinidad Guardian
Calder Hart

Calder Hart is Executive Chairman of UDeCOTT, Chairman of the Home Mortgage Bank, Trinidad & Tobago Mortgage Finance, the National Insurance Board (NIB) and the National Insurance Property Development Company (NIPDEC).  He obviously enjoys the highest level of trust from the government.  So consider this extract from Calder Hart’s cross-examination, under oath, at the Enquiry on Wednesday 28th January 2009.  Hart is being questioned by Gilbert Peterson SC, attorney for Dr. Keith Rowley –

Continued Cross-Examination By Mr. Peterson:
Q.      Mr. Hart, I am examining your CV.  I see that you attended St. Francis Xavier University.  What degree did you obtain from that University?
A.       Bachelor of Arts in Economics.
Q.      Bachelor of Arts in Economics.  And I also see that you attended a course at MIT?
A.       That’s correct.
Q.      What was the scope of that course?
A.       Well, I think it’s down there as Urban Economics and Public Policy.
Q.      What was the duration of that course?
A.       I think it was either two or three weeks.
Q.      And the one at Alberta?
A.       The University of Alberta I gained managing human resources; the same amount of time, two or three weeks.
Q.      You would not describe yourself as a financial expert, would you?
A.       No, I would not describe myself as a financial expert.  But I would describe myself as a person with a body of experience.
Q.      Yes.  But your lawyers misdescribed you in these proceedings as a financial expert.  You would not agree with that description?
A.       I would not describe myself as an expert of anything.

That cross-examination can be found at page 53 of that day’s transcript – http://www.constructionenquiry.gov.tt/getattachment/6f957486-f0f4-4aad-b585-d644f3212806/COE-Construction-Industry-20090128-Merged-doc.aspx.

‘UDeCOTT’s accounts’

We have repeatedly been told that UDeCOTT is an exemplary and highly-efficient State Enterprise.  In light of those assertions, coming from the PM and his colleagues, we are entitled to be concerned as to their lack of financial transparency.  On 28th January 2009, Calder Hart was cross-examined, also under oath, by Alvin Fitzpatrick SC, attorney for the JCC.  Consider his testimony on the specific issue of UDeCOTT’s audited accounts –

Continued Cross-Examination By Mr. Fitzpatrick

Q.      Now, rather than go through all of them, would you accept that in respect of the audited accounts for the periods which are due at 31st December of each year and the all the accounts from 2003 to 2006 were signed off by your external auditors prior to the end of March of the following year?
A.       That’s correct.
Q.      That’s correct.  And your external auditors are Price Waterhouse?
A.       Yes.
Q.      Now, I notice that there are no audited accounts for the period ending December 2007?
A.       That’s correct.
Q.      Now, that is close to two years ago they are overdue.  Is that so?
A.       Just one year.
Q.      Just one year.
A.       Not quite a year.  Normally they would have been due in March.
Q.      They would have been due in March and they are now overdue?
A.       Yes.
Q.      Now, the period 2007 would have included a number of costs related to the Brian Lara Cricket Academy?
A.       Yes.
Q.      Would you agree that external auditors will not sign off on statements where they are not satisfied with the records or they have some concerns about the records?
A.       No, that’s not my understanding at all.  My understanding is that there were issues surrounding the notes to the accounts in terms of some of the areas where they wanted to change some of the interpretation of what we had been doing.  So there was a long discussion.  I think some of the problems had to do with getting all of the information reconfigured.  So my understanding is that probably before the end of next week we shall have our 2007 accounts.
Q.      I will be very glad to hear that.  So what you are saying is that the accounts have not been signed off by your external auditors, because they did not agree with the existing configuration of some of the figures?
A        Well no, I mean, you have to understand that PWC have been doing our accounts from day one.  But I think that what they wanted to do was to deal with some of the notes as well as the manner in which the structure of our operations—I think what has happened is that as we have moved to expand our financing in the international markets.  My understanding is that they are obviously ensuring that international standards are followed and in looking at them they want to restate some of the elements in it.
And my understanding is that has all been agreed between the accountants.  There were some issues surrounding some of the information and that sort of thing which they have now been satisfied with.  And we are expecting it obviously within the next couple weeks.
Q.      Let me see if I can summarize that.  It was quite a mouthful.  PWC have not signed off because there were some unresolved issues which have now been resolved?
A.       As I understand it, yes.
Q.      And, of course, PWC will not sign off on any financial statements unless they are satisfied that all the issues remain unresolved (sic)?
A.       Mr. Fitzpatrick, let me assure you, there is no flight of fantasy eh.
Q.      Thank you.  Well, I assume before we resume on the next occasion we will have those audited accounts?
A.       Yes.

This part can be found at pages 37 to 39 of the same day’s transcript.

No accounts yet for 2007, none for 2008 and we are near to the end of 2009.  If this is exemplary performance, what next?

Afra Raymond is Managing Director of Raymond & Pierre Limited and President of the Institute of Surveyors of Trinidad & Tobago.  Comments can be sent to afra@raymondandpierre.com.

The Uff Commission – The Final sitting

John Uff. Photo courtesy Trinidad Guardian
John Uff
The controversial Uff Commission is to start the final round of its hearings tomorrow. Please click here for the timetable. This Commission of Enquiry was established to examine and report on the Public Sector Construction Industry, with particular reference to UDeCOTT and the HDC’s Cleaver Heights housing project in Arima.

The huge sums of money involved and the egos of the parties all combined with irregular practices in this matter. The combination produced an unflattering and unforgettable picture of our nation’s leading players under the bright lights of the Uff Commission.

The legal challenge against and resulting resignation of Israel Khan as a Commissioner was just one outcome of the bold stance taken by the UDECOTT Board in this matter. The continuing legal challenges mounted by UDeCOTT against the Uff Commission have greatly diluted the credibility of this government, even in the eyes of its most loyal followers.

The failure to gazette the Enquiry was yet another strange aspect of the matter and, although that lapse has now been rectified, we are yet to hear a cogent explanation as to who was responsible and what was the reason for the failure. On this count alone, we are nurturing irresponsible behaviour by allowing this to pass quietly.

The Commission of Enquiry can only make findings based on the evidence which is properly submitted to it and that is where my concern is rooted. We are down to the final few days of hearings and it is my view that the proposed agenda for the final week of hearing is deficient since it leaves some seminal issues outstanding.

These are key points which could be addressed, even at this late stage, by the Commission issuing the necessary legal notices to have these items placed in evidence.

In order of importance, the outstanding issues are:

  1. UDeCOTT’s missing accounts – The main subject of the enquiry is the operation of UDeCOTT and we have not had their audited accounts for 2007 or 2008. The Performance Monitoring Guidelines for State Enterprises, published by the Investment Division of the Ministry of Finance, requires that these should have been published by now. UDeCOTT’s Executive Chairman, Calder Hart, while testifying to the Commission under oath on 28th January, stated that all the outstanding issues with the audit had been resolved and that those accounts would be published in “…a week or two…”. That testimony can be accessed from the CoE website at http://www.constructionenquiry.gov.tt/getattachment/6f957486-f0f4-4aad-b585-d644f3212806/COE-Construction-Industry-20090128-Merged-doc.aspx on page 43. For any Enquiry into the operation of UDeCOTT to make sound findings, those accounts need to be published now. At the least, UDeCOTT should write to explain the breach of the guidelines issued by its shareholder and the undertaking, given under oath by its high-performing Executive Chairman. Again, I ask, “Is UDeCOTT insolvent?”
  2. Bob Lindquist’s missing report – The original concern on the Cleaver Heights housing project arose when the Prime Minister raised concerns as to ‘Where the Money gone?’ and much was made of $10M or $20M which was said to be missing. The PM used the Budget debate in Parliament last year to ask the question of the former Minister of Housing – Dr. Keith Rowley. We were told that the Housing Development Corporation had appointed the respected forensic accountant, Bob Lindquist, to probe the project in question. The Minister of Planning, Housing and the Environment was reported to be silent on details when questioned on the results of that probe by reporters. [See – ‘Not me and the bacchanal’ published in Newsday on August 29th 2009 – http://www.newsday.co.tt/news/0,106338.html That is simply not good enough and the Commission needs to get Mr. Lindquist’s findings into evidence. We cannot have a satisfactory Enquiry if the government is able to control the flow of evidence.
  3. Housing Development Corporation’s output deficit – The Uff Commission’s terms of reference include ‘project delivery’ and the HDC has failed to account for this chronic deficit in satisfying its prime objective – Housing Development. The entire time spent by this Enquiry on housing has been only in respect of the Cleaver Heights project, but the HDC has never produced more than 50% of its target output in terms of the numbers of new homes built each year. The question remains as to whether the HDC is aware of the reasons for this continuing shortfall. This is a flagship state policy and the shortfall in numbers of new homes produced is itself deserving of proper attention from this Enquiry and the responsible State Enterprise. I submitted a series of written questions on this to the Enquiry and one would hope that some written response is forthcoming from the HDC or the Ministry.

The remaining Commissioners can take steps to preserve their reputations and have the key elements of outstanding information put into evidence. We await with interest.

Afra Raymond is Managing Director of Raymond & Pierre Limited and President of the Institute of Surveyors of Trinidad & Tobago. Comments can be sent to afra@raymondandpierre.com.

Property Matters – Property Taxes 2010

I have included my new series of articles on the proposed property tax here on my website. You can access the articles on it page by clicking the “Property Matters” stub above or by clicking the Title links to retrieve article.

Title Abstract
#1 – An overview The recent proposals for a revision of property taxes have met with a heavy round of criticism. Apart from the government, there have been few supporters for this new tax.

#2 – The Challenge for the TTRA The challenge for the newly-founded Trinidad & Tobago Revenue Authority (TTRA) is considerable, given the depth of criticism against the proposed review of property taxes.

#3 – The proposed 2010 Review This week the actual proposals of the Ministry of Finance are examined. The proposed review is formally set out in the Property Tax Bill 2009, which is to be tabled for debate.

#4 – The Central role of Local Government reform This week I am drawing some conclusions on the property tax proposals, together with a presentation of the corrected data.

Continue reading “Property Matters – Property Taxes 2010” →