None So Blind

Property ownership is a critical ingredient of the society we are trying to build.  No one can deny that.   The wealthiest people and companies in this society have made a great part of their wealth through property dealings – buying, leasing, sub-dividing, selling, renovating and so on.  We all know that property is critical to amassing and holding wealth.

The single largest owner of all classes of property in the Republic is of course, the State.  Those properties are described as ‘Public Property‘ in the Public Procurement & Disposal of Public Property Bill 2014 which is now being debated in Parliament.  The penultimate paragraph of the Private Sector Civil Society group (PSCS) group statement of 13 June 2014, is clear –

“…Whilst very pleased with the progress to date and while not having sight of the amended bill we note two areas that remain of serious concern; the Role of civil society and the acquisition and disposal of public property…“.

At pg 7 of that Bill – “public property” means real or personal property owned by a public body;”

‘Real Property’ usually means real estate (freehold or leasehold), while ‘Personal Property’ usually means all other types of property such as licenses, concessions and tangible items of worth.

‘Owned’ usually means literally owned, as in the case of a freehold or leasehold interest, but there are other important types of property which are not literally in the ownership of a public body.  Public Property is important because it is extremely valuable.  The power of the State or its agencies to allocate those Public Properties must therefore be exercised in an equitable and transparent fashion if we are to foster proper conduct of our country’s public affairs.

Crown Grants

In relation to real estate, it is important to note that the system of Crown Grants was used during the colonial period to encourage immigrants of a particular type.  Immigrants who were of acceptable race, religious belief or station in life were allocated public lands for the purpose of agriculture.  The actual documents are called ‘Crown Grants’ and they can be seen in our country’s records.  The allocation of those lands to those selected people established a pattern of substantial wealth which took generations to displace.  Of course such a system of property allocation, on the basis of ones’ external appearance and belief system, would be incompatible with our Republican status.

That history and the important role which property plays in today’s society are both reasons why the  ‘disposal of public property‘ is an inescapable part of the new law, so that we can ensure good governance in these matters.

The Maha Saba Episode

This is a good example of a type of Public Property not literally owned by a Public Body.  The dispute was over the decision of the previous administration to allocate radio licenses overnight to the Citadel Group, which was owned by a PNM member, at the same time as delaying the grant of broadcast licenses applied for by the Maha Saba.   The Maha Saba had to take legal action all the way to the Privy Council to obtain a favourable judgment as to the breaches of principles of good public administration by that PNM government. 

A new law intended to control dealings in Public Property as defined above would be one which extended beyond those literally owned by Public Bodies to include species of property in the ‘care, custody or control‘ of those bodies.  That would allow future occurrences of a ‘Maha Saba episode’ to be rapidly rectified, also at less expense, by the Procurement Regulator as that type of property transaction would be within oversight of the new law.

In point of fact, it was reported that the Citadel group which comprised three radio stations was sold in 2012 to the CCN group (owners of this newspaper) in 2012 for a sum reported to be over $50M.  So it is clear that these species of property have serious value, quite apart from any other aspects.

Caroni Lands

When Caroni Ltd. was closed in August 2004, about 76,000  acres came out of cultivation and become available for alternative uses.  The Caroni lands stretch from Orange Grove at Trincity (near the large new Blue Water facility) as far south as Princes Town.

Given the fact that Chaguanas has been our fastest-growing town for almost 20 years now and the ongoing growth of investment in San Fernando and its outlying districts, it is clear that the Caroni lands have a critical role to play in our medium to long-term prospects.  But those possible outcomes would be conditional on just how the Caroni lands are allocated in the short-term.  As far as I am aware, a decade after abandoning sugar cultivation, there is still no strategic plan for how these lands are to be utilised.  In the absence of a proper strategy for the management of those important State lands, there is scope for missed opportunity in terms of development and re-distribution.

The decisive land allocation issues would include –

  • How does the allocation policy work together with the State’s broader economic policies?
  • To whom are the lands allocated?
  • On what terms are the lands allocated – i.e. for how long are the lands to be leased and with what restrictions? Some of the ex-Caroni workers are demanding grants of freehold interests from the State, but no decision seems to have been made on that.
  • Does the State have the right to repossess the lands upon expiry of the lease?
  • Does the allocation strategy have dynamic measures to control speculation?  This is to prevent the growth of ‘flippers’ who just acquire property to hold and re-sell.  There is a serious view that ‘flippers’ are a part of the market, but there is also a way that their presence can retard development as they do not typically improve or maintain their properties.

All of those issues must be located within equitable and transparent arrangements as required by the new  law.

State Leases of offices

When the State leases offices or other property it is in fact procuring property via a transaction in Public Money.  Those transactions must take place within a modern system which ensures good governance by attaining accountability, transparency and value for money.

There is a huge oversupply of offices in greater POS as a result of the State’s overbuilding during the last regime and the current administration is now shifting significant public offices out of POS.  The combined impact of those ought to be a steady decline in both the gross amounts paid to landlords via State leases and the amounts paid per sq. ft..  That kind of change can only be obtained and monitored if the State’s leases of offices and other property are also part of the new Procurement system, so that the details are published as part of the database of State contracts.

Invader’s Bay

The State-owned reclaimed lands at Invader’s Bay in west POS are another pregnant example of how the use of improper land allocation processes can injure the public interest.  The JCC has mounted a legal challenge to seek publication of the legal advice obtained by the Ministry of Planning & Sustainable Development as to the legality of their activity ‘thus far’ in respect of that 70-acre parcel of prime land.

It is interesting to recall that one of the legal opinions on which the State seems to be relying, notes that this proposal was to grant long leases (about 99 years) to the successful bidders at Invader’s Bay.  That was not considered a disposal since the State would have retained the freehold interest.  Now that is probably the best example of why these types of transactions must be controlled by these modern and effective laws.  The attempt to conflate a residual freehold interest with ownership, while at the same time denying the tremendous commercial value of a 99-year lease over prime lands was scandalous.

The most valuable properties in the capital are the leaseholds in St. Clair and Woodbrook, that much is indisputable, which is why we have guard against this kind of evasive advice to facilitate arrangements to escape proper oversight.

The Landed Interests

The ill-fated 2009 proposals for a new Property Tax would have required an updated and open database of the entire country’s property holdings.  The campaign to ‘Axe the Tax’ was successful and that database never saw the light of day, which entirely suited the Landed Interests who are wary of any system which would expose their operations to easy scrutiny.

We need to be vigilant to ensure that the Public Procurement & Disposal of Public Property Bill 2014 does not leave a gaping, purposeful loophole thorough which our Public Money will continue to pour.

Given that our political parties receive financing from business-people, how will those party financiers be rewarded?  In a situation which properly controls the award of State contracts for goods, works and services, how can they be rewarded?

The answer is Public Property.

Money is the Problem

One of the big unanswered questions arising out of the recent ‘grand corruption’ cases in relation to the Public Sector remains – ‘How can we lawfully punish those wrongdoers who are looting our country?‘

Most discussions proceed along the lines of what I call the ‘bag of money‘ idea, in which we are looking for the actual stolen money.  The belief being that the stolen loot can actually be located and linked to the thieves, who will then face a harsh penalty.  My preferred solution is for full disgorgement of all the stolen monies as a starting-point, even if that is a remote goal.

In re-examining the issue practically, one has to ask “Why do we persist in these ‘pipe-dreams’, while ignoring the ‘low-hanging fruit’ all around us?”  So I am considering a new strategy for action on these critical issues.

‘Public Money’ is the term used to describe money due to or payable by the State, including those sums for which the State would be ultimately liable in the event of a default.  Public Money is sometimes called Taxpayers’ Money, it is our Money. Continue reading “Money is the Problem” →

Paying the Price

On Wednesday 11 June 2014, the Senate unanimously approved the Public Procurement & Disposal of Public Property Bill 2014 and that Bill is soon to go to the House of Representatives for their deliberation. I was present to witness the collective efforts made by Senators on Tuesday 10 June and it was a really thought-provoking experience for me.  I started to wonder just how much we could achieve if the banal point-scoring and ritual picong was to become a thing of the past.  The basis of decision-making on public issues would have to shift to a fact-based one, which would be a huge, healthy step away from the sad formula of ‘might is right’.

What a day that would be for us all, just imagine.

But we have to exist in this place, as it is, with all its imperfections.  Which leads me to discuss the constant questions put by people who want to know if ‘this law we are fighting for‘ could prevent this-or-that corrupt practice.  So the two projects which I would use to give worked examples are –

  1. the THA/BOLT office project on which the High Court recently ruled;
  2. Calcutta Settlement/Eden Gardens land purchase by HDC.

THA/BOLT

tha-bolt1This project was analysed in a previous article, which set out certain questionable aspects of those arrangements.  In my opinion, the greatest areas of concern were  –

  • Size – THA stated that the Divisions for which this building was being leased now occupy 28,500sf, yet the completed project is to comprise 83,000sf – almost three times more space.
  • Quality – The new building is projected to cost $143M, which equates to $1,723 per sq ft and that is at the upper end of office costs, even when we consider that the contract was reported to be for a fully fitted building.
  • Rent – The current rent paid by the THA for the Divisions to be located in the new facility is an average of $8.17 per sq ft.  The rent for the new facility was agreed at $15.61 per sq ft, which is almost twice the rate now paid.  It was telling that the THA relied on the statements of a Civil Engineer, Peter Forde, who sought to justify that rent by reference to the fact that $10 per sq ft was being paid for some offices in Scarborough.  Mr. Forde is an esteemed engineer with whom I have worked well in the past, but that is like relying on my advice, as a Chartered Valuation Surveyor, as to the correct steel to use in some complex structure.
  • Total Costs – The total monthly rent now paid by THA for those Divisions is $231,788, while the new project is set to cost a monthly rent of $1.295M – more than five times more.

All of these arrangements being made by a public authority which makes a compelling case that the Central Government has starved them of financial resources over a considerable period.  The THA, starved of money, is justifying a deal which will hugely increase their monthly rent bill, for an office building three times larger than required at a higher quality than any other in Tobago.  That is the sense of this deal.

The recent litigation over this project was altered after it started, to two questions of ‘construction’, being ruled by the Court to be issues of public interest –

  • Finance Ministry approval – Is THA required to obtain approval from the Ministry of Finance before entering a BOLT arrangement?
  • Tendering procedure – Is THA required to follow the procedures of the Central Tenders Board Act (CTB Act) in entering a BOLT arrangement?

The High Court ruling on 30 April 2014 was claimed by THA to be an endorsement of their course of action, but this is what it actually meant.

ISSUES High Court Ruling Proposed Public Procurement Law
Preliminary considerations No ruling by the Court. A Needs Assessment would be required to take account of a life-cycle costing, which includes both initial and cost-in-use aspects.
Ministry of Finance approval At para 33, the Court ruled that THA is not required to obtain approval of the Minister of Finance.  In that respect, one can understand THA’s claim to have been vindicated.At para 29, the Court makes the inescapable point that since this is a 20-year recurrent commitment which would have to be paid for by financing from the Central Government, it would be prudent for the THA to consult with the Finance Ministry before entering such arrangements. This is a transaction in ‘Public Money’ via a ‘Public Private Partnership’ which is included in the remit of the proposed law.
Tendering Procedure At paras 48 through 51, the Court was emphatic that the THA was required to follow the provisions of the CTB Act. The proposed law abolishes and replaces the CTB Act and would include this kind of project under the oversight of the Office of Procurement Regulation.

In this case, the THA’s claims of victory appear unrealistic, but the good news is that the proposed arrangements will act to prevent a recurrence of this wasteful type of project.

EDEN GARDENS

163940This 2012 purchase of 50.5 acres (comprising 264 residential lots with ancillary uses) by the Housing Development Corporation (HDC) was also the subject of a series of articles in this space, which highlighted these questionable aspects –

  • Private sales as individual lots – Eden Gardens lots were being offered for sale in 2011 at $400,000.
  • HDC Valuations or Offers? – HDC obtained a private valuation of the property at $52M in November 2011.  In January 2012 Eden Gardens is offered to the HDC at $200M.  So why did HDC order a valuation in November 2011?  Was there an attempt to offer the site to HDC before November 2011 and at what price?
  • The State valuer exceeds the opinion of a private valuer? – Of course that is virtually unknown, but the fact is that the Commissioner of Valuations issued an opinion of value in April 2012 placing the property at $180M.
  • HDC Purchase – The HDC buys the property in November 2012 at $175M, which equates to $663,000 per lot.   Given that those lots were available in 2011 at $400,000, that is a 66% increase in the value of those lands within one year, which can make no sense.  It makes even less sense when one considers that HDC was buying the all that land at once, so a discount would be the rational and expected commercial practice.  So what was the basis on which this price was settled?
  • Plan ‘B’ – The State had the power to compulsorily acquire the land if it was required for a public purpose, which housing is.  The point being that the State could have lawfully acquired Eden Gardens for no more than $35M, if they had chosen to use their powers of compulsory acquisition.  So, why did they choose to go the Private Treaty route?
  • The ‘Ultimate Beneficial Owner’ – The basic business practice required of bankers and other finance professionals is to ‘Know Your Customer’ as a fundamental part of ‘Anti Money Laundering’ (AML) laws now in force in this country.  Those laws and professional practices have now extended to cover the activities of real estate agents, so anyone selling land would be required to conform.  The vendor of Eden Gardens was Point Lisas Park Limited, but from my research at the Registrar General’s Dept, it seems that PLP Ltd. has never issued shares.  Which means that we can only speculate as to who was the ‘Ultimate Beneficial Owner’ of Eden Gardens and indeed, who received $175M for that property.

The proposed new laws do not contain any provisions to govern the State in ‘acquiring public property’, which was the case in Eden Gardens, since the State was buying land.

This is one of the outstanding serious concerns as to the proposed new law, which would not act to prevent this type of corrupt practice.  Our Parliamentarians need to consider these aspects in finalising this law.

What Lies Beneath

The public is being told that the CL Financial bailout is being resolved, while at the same time the Minister of Finance & the Economy is withholding the fundamental information which any prudent person would need to make a decision.  So, what is the secret?

Apart from the details I have been asking for, there are other questions which occur to me –

  1. Directors’ Fees – What is the comparative level of Directors’ fees before and after the bailout on 30 January 2009?  In particular, what are the fees & expenses payable to CL Financial Directors?  Have those increased?  If so, to what level and on what rationale?
  2. Related Party dealings – We were told that one of the main causes of the CL Financial collapse was excessive related-party transactions.  Has that pattern of dealings has really changed? What are the contracts between the group and companies in which Directors hold an interest?  Does the group, or the Minister of Finance, keep a record of these connected contracts?  Does the group have a robust procurement procedure which would ensure value for money in all its significant transactions?
  3. Asset disposals – Which of the group’s assets have been disposed-of since the bailout and on what terms?  Were proper valuations obtained before these disposals?

The original complaint is here –

———- Forwarded message ———-
From: Afra Raymond <afraraymond@gmail.com>
Date: Mon, Sep 10, 2012 at 11:12 PM
Subject: Compliance of CL Financial Directors with the Integrity in Public Life Act
To: registrar@integritycommission.org.tt
To – Mr. Martin Farrell, Registrar of the Integrity CommissionDear Sir,
The Integrity in Public Life Act requires that “Members of the Boards of all Statutory Bodies and State Enterprises including those bodies in which the State has a controlling interest” are required to file returns and declare interests with the Integrity Commission.

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

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

For your information, your staff confirmed to me today that none of these people have filed declarations or been required to file such for 2009, 2010 or 2011 –

  • Gerald Yet Ming (CLF’s current Chairman)
  • Hayden Charles (CLICO Director)
  • Ronald Harford (Republic Bank’s Chairman)
  • Dr Euric Bobb (former CLF Chairman)
  • Rampersad Motilal (Managing Director of Methanol Holdings Limited)

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

I await your early reply.
Yours faithfully,

Afra Raymond
B.Sc. FRICS

http://www.afraraymond.com

IC-response2013-full
Click image to enlarge

SIDEBAR: Integrity and the CL Financial bailout – the nexus as noted by Afra Raymond on 28 May 2009

There is an interesting nexus between the Integrity in Public Life Act (2000) and the CLF bailout.

The Act obliges that public officials make a declaration of their income, assets, liabilities and interests to the Integrity Commission on or before 31 May of each year.  There are penalties for non-compliance.  We have seen high-profile investigations and prosecutions with the proposed amendments to the Act now being debated in the Senate.

The Integrity Commission website lists ten classes of persons in public life who must file declarations with them.  That list can be found at http://www.integritycommission.org.tt/whofile.html.  The ninth class of person is “Members of the Boards of all Statutory Bodies and State Enterprises including those bodies in which the State has a controlling interest.”

CL Financial has already signed over its shareholdings in Republic Bank Ltd. (55%) and Methanol Holdings Trinidad Ltd (56%) to the State under the MoU, and the State has taken complete control of CLICO.  Will CLICO, MHTL and Republic Bank Directors be filing returns on or before 31 May?

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

Dear Mr. Farrell,

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

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

I await your early reply.

Regards

Afra Raymond

http://www.afraraymond.wordpress.com

pointing-finger-md

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

Dear Mr Raymond

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

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

Registrar

pointing-finger-md

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

I appreciate your early attention to my query.

Regards

Afra Raymond

pointing-finger-md

From: Afra Raymond <afraraymond@gmail.com>

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

 

Hello Mr. Farrell,

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

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

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

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

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

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

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

Afra Raymond

http://www.afraraymond.wordpress.com

pointing-finger-md

Registrar, Integrity Commission
May 22
to me

Dear Mr. Raymond

 

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

 

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

Yours respectfully

Lisa Phillips

Acting Registrar

Integrity Commission

pointing-finger-md

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

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

Hello Ms. Phillips,

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

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

Afra Raymond

http://www.afraraymond.wordpress.com

pointing-finger-md

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

Dear Mr. Raymond

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

Regards

Lisa Phillips

Acting Registrar

pointing-finger-md

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

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

Hello Ms. Phillips,

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

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

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

Thank You

Afra Raymond

http://www.afraraymond.wordpress.com

pointing-finger-md

Registrar, Integrity Commission      May 23

to me

Mr. Raymond

Noted. Thanks

Lisa

Everything but the Truth

On 1st June 2014, my former colleague and Business Guardian Editor, Anthony Wilson,  made a call for a ‘national debate’ on the proposed disposal of CLICO’s traditional portfolio of insurance business.  This is the first of my responses.

We are now entering the chaotic endgame of this epic CL Financial bailout fiasco. Some of the recent official statements are –

  • CL Financial’s other assets, including majority shareholdings in Republic Bank Limited and Methanol Holdings to be sold;
  • Full repayment of Public Money advanced in this bailout is expected.
  • CLICO’s traditional insurance policy portfolio is being professionally valued prior to its intended disposal;
  • Atrius Ltd., set up in 2013 as an alternative vehicle for CLICO’s continuing business, is to be effectively abandoned;
  • All of CLICO’s sales agents are to be terminated by the end of this month, June 2014;

jwala-howaiThe recent statements of both the Minister of Finance, Larry Howai, and the Governor of the Central Bank, Jwala Rambarran, could give the public an impression that this financial disaster has now been mostly resolved and we are on some kind of smooth track to a complete solution.

I remain sceptical as to the extent to which these problems have been resolved. The complete lack of detailed information, despite many requests by myself and others, leaves one to wonder just what is the basis for these serious decisions.

So, why am I saying this?

The money being used in the CL Financial bailout is ‘Public Money’, which we sometimes call tax-payers’ dollars. The leading learning from which we have to draw serious lessons is Lord Sharman’s 2001 Report to the British Parliament ‘Holding to Account‘, which was a thorough examination of the definition, role and need for control of ‘Public Money’. In the Public Procurement campaign we expanded on Sharman’s definition of ‘Public Money’ so as to capture the full range of possibilities, but we have accepted his key finding as to the requirement that ‘Public Money’ is to be managed to a higher standard of Accountability and transparency than Private Money – see 2.23 on pg 15.

The contemporary, best-practice position in respect of the management of and accountability for Public Money being that the private sector rules are the bare minimum.

CL Financial Ltd. is a holding company for the Duprey empire, comprising major companies such as Republic Bank Ltd.; the Angostura Group; Methanol Holdings Trinidad Ltd; Home Construction Group of Companies; British-American Insurance Company Ltd; Lascelles-Mercado Ltd. (the Jamaican owners of Appleton and Wray & Nephew rums).

The last audited accounts for the CL Financial group were published on 18 November 2008, for the financial year ending 31 December 2007. The function of consolidated audited accounts is to give investors and management the necessary information with which to make decisions as to the future of the company.

Since 2009 I have been making requests under the Freedom of Information Act for these items of information –

  • Audited Accounts for the CL Financial group, or the basis of the various statements by successive Ministers of Finance;
  • Senate Briefing – details of the high-level briefing given to Independent Senators in September 2011 prior to the vote on the two new laws – one to allow the State to borrow an additional $10.7 Billion to settle the bailout and the Act to shield the Central Bank from the supervision of the Courts;
  • Payments – details of the payments to the various claimants under the terms of the bailout, in particular EFPA-holders;
  • Integrity Commission – confirmation of whether the Minister of Finance was requiring the CL Financial Directors to file declarations as required by law.

I have effectively withdrawn the last of those requests and am now in litigation against the Minister of Finance & the Economy for the first three items. The State has resisted those claims and the litigation continues. I have continued my quest on the compliance of CL Financial’s Directors with the Integrity in Public Life Act with the Integrity Commission, despite the serial delays and unresponsiveness which have beset those requests.

The question before us now is, “How can the State and our government be making these serious, long-term decisions in the absence of the basic information?” Put another way, “How can we continue to allow these serious decisions to be made in our name on our behalf and supposedly, for our benefit, while the State continues to withhold the basic information?”

We have now entered the unimaginable territory of unexamined State power being exercised on an unprecedented scale in the pursuit of an unknown agenda.

This is the big picture and it is an ugly one.

Try to imagine the Board of a major, privately-owned, holding company proposing to its Shareholders that its major assets be disposed-of without the basic information, such as audited accounts or details of meetings with major stakeholders. Such an action would be seen as a gross violation of elementary norms of corporate governance and quite likely be rejected with swift, high-level dismissals. Yet, here we have our government (the Board of Directors) proposing these actions while refusing the reasonable requests of shareholders (citizens such as myself and others) for the rationale for and basic information underlying this process.

The fundamental, best-practice principle that Public Money is to be managed to and accounted for to a higher standard than Private Money has seemingly been rejected. Rejected by the Minister of Finance & the Economy and the Governor of the Central Bank.

That is the scale of this ‘thing without a name’. I tell you.

We, the citizens and taxpayers of this Republic, are being told that this unprecedented expenditure of Public Money of $25 Billion is to be resolved by a questionable process. The long-time saying is buzzing through my head – ‘What eh meet yuh, eh pass yuh‘.

Some points to remember in thinking about this issue –

  • CL Financial Shareholders’ Agreement expires at the end of June 2014;
  • Asset Sales have continued with the unadvertised sales of Valpark and Atlantic Plazas;
  • No Interest was charged on the huge sums of Public Money spent to settle the indebtedness of the CL Financial group. The Board of Inland Revenue is a Division of the Ministry of Finance & the Economy and annual interest of 20% is charged to taxpayers who are late in their payments.
  • ‘Fit & Proper’ regulations have never been applied to this CL Financial collapse, as mandated by Central Bank’s regulations, despite my continuing calls. One has to wonder if the stage is being set for a return of Lawrence Duprey & his cohorts to our country’s high-level corporate lifestyle.

On 28 May 2014, the Business Express ‘Opinion‘ was entitled ‘Bringing closure to the CLICO debacle‘ and one of the statements in that editorial was stunning –

“…Thus far, Rambarran and Finance Minister Larry Howai have been forthcoming in their handling of the CLICO issue…”

I could not agree less. The taxpayers and citizens of Trinidad & Tobago are being abused in this entire process.

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

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

Dear Mr. Farrell,

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

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

I await your early reply.

Regards

Afra Raymond

http://www.afraraymond.wordpress.com

==================================================================================

 

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

Dear Mr Raymond

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

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

Registrar

===================================================================================

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

Hello Mr. Farrell,

I appreciate your early attention to my query.

Regards

Afra Raymond

===================================================================================

From: Afra Raymond <afraraymond@gmail.com>

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

 

Hello Mr. Farrell,

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

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

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

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

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

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

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

Afra Raymond

http://www.afraraymond.wordpress.com

===================================================================================

Registrar, Integrity Commission
May 22
to me

Dear Mr. Raymond

 

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

 

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

Yours respectfully

Lisa Phillips

Acting Registrar

Integrity Commission

===================================================================================

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

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

Hello Ms. Phillips,

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

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

Afra Raymond

http://www.afraraymond.wordpress.com

===================================================================================

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

Dear Mr. Raymond

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

Regards

Lisa Phillips

Acting Registrar

===================================================================================

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

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

Hello Ms. Phillips,

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

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

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

Thank You

Afra Raymond

http://www.afraraymond.wordpress.com

===================================================================================

Registrar, Integrity Commission      May 23

to me

Mr. Raymond

Noted. Thanks

Lisa

 

The original complaint is here –

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

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

Dear Sir,

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

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

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

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

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

I await your early reply.

Yours faithfully,

Afra Raymond
B.Sc. FRICS

http://www.afraraymond.com

The Elephant in the Room – part 2

Port of Spain
Port of Spain

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

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

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

  • State Leases

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

  • Empty Buildings

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

  • Re-location progress

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

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

    COSTATT2-595x340

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

  • UDECOTT’s rollout

    governmentcampus
    Government Campus

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

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

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

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

TSTT Inquiry

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

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

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

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

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

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

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

The Integrity in Public Life Act

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

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

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

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

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

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

On 27 June 2013, the Appeal Court ruled that –

“CONCLUSION

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

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

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

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

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

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

The Freedom of Information Act

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

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

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

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

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

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

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

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

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

I asked the Inquiry to recommend to Parliament that it –

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

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

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

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

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

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

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

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

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

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

Best regards,

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

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Disclaimer: This email, any file(s) it may contain or have attached and transmitted with it are the property of the Office of the Parliament of the Republic of Trinidad and Tobago and therefore deemed private and confidential. It is intended solely for the use of the individual(s) listed in the address. If you have received this email in error please immediately notify the sender and permanently delete the email. Further, as you are not the intended recipient, you are hereby notified that any review, dissemination, disclosure, alteration, printing, copying or transmission of this e-mail or any file(s) contained is strictly prohibited and might have legal implications if treated with, in any other manner than stated prior.

G2G Policy

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

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

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

The main criticisms of the G2G arrangements are –

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

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

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

Physical Development Projects via G2G – April 2014

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

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

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

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

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

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

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

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

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

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