Property Matters – Taking Stock

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

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

The notable items were –

Housing Development Corporation (HDC)

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

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

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

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

Building code

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

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

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

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

A Culture of Consequence

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Housing Policy Imperatives – Part 4

Having set out a framework for a more effective and equitable national housing policy, it is time to deepen the discussion.  In this week’s column, I will further analyse the existing housing policy so as to highlight those errors which we must avoid if we are to do better.

My proposed framework would quantify housing subsidy and allocate that in accordance with identified housing need, with the quality of the new homes also being monitored to ensure constant improvement.

To go further into the issues requires that we examine these aspects –

  • National Planning – It will be very difficult to achieve improved levels of housing quality if we proceed to build large numbers of new homes without reference to a national land-use plan.  1984 was the last time our Parliament approved a national land-use plan.  Over 25 years have elapsed and the position of the last government was that the national land use plan was being prepared for discussion in the next 2 years or so.  We have very limited developable land in this country – only about 9 to 10% of the total – so it is critical to plan and co-ordinate our future for best results with our limited resources.  Transportation, education, shopping, health-care, industry, housing and recreation are the main aspects which need to be fit onto those developable lands.  This ongoing housing programme has already had grievious cases of the alienation of agricultural lands for housing.  Alienation of agricultural lands is when we pave over farmland for non-agricultural development.  That land is permanently lost in terms of our food supply, but we need to preserve our agricultural lands.  That is vital in terms of maintaining our food security.
  • Intensity of development – An associated aspect that we need to reconsider is whether we can spare the land to continue HDC developments of  homes with gardens.  The HDC must publish its figures on the numbers of new homes built; the amount of land consumed; the numbers of houses versus the numbers of multiple-family homes and of course, the numbers of these various types of homes which have actually been occupied.  At this point the HDC has only built 15,394 new homes, compared to their annual target output of 8,000 new homes, which, if attained, would have been 60,000 new homes.  The HDC has only built a quarter of the intended number of new homes, which means that we still have time to adjust and improve the programme.
  • Pricing – The more I consider the dilemma in which this housing policy has been caught, the more it seems that the fundamentals were poorly-considered.  Just consider the issue of the pricing of the units – How did the pricing model evolve?  I have already, in part 2 of this series, critiqued the HDC’s cost-based model for its erroneous outputs in terms of assessing the quantities of housing subsidy being allocated.  One can go further to ask how these price points emerged.  Was any reference made to the incomes of the people on the waiting-list or were the HDC prices driven by the demands of the physical development agenda?  It seems to me that the latter was what took place, if indeed any conscious process of setting prices ever did occur.  If we are aiming for people-centred development, that entire misguided approach to pricing needs to be revised.  We need to give serious consideration to building more modest multiple-family homes for rental.
  • Quality – Another matter which has been in the news from both the last administration and now the new one, is the issue of the poor quality of some of the new homes.  We have been given various ‘horror stories’ about poor construction and the need for further works and so on.  But there is more to this story.  The fact is that the norm in the construction industry is that a contractor only has a valid claim to be paid in the case of ‘works properly executed’, so how did the HDC end up paying for all these defective buildings?  I am not seeking to exonerate the contractors from any wrongdoing, but the simple fact is that someone in HDC ought to have had the responsibility to inspect and approve the works before payment was authorized.  Either the HDC has a process for doing that or not.  If yes, what went wrong?  Who signed-off on those poorly-built homes?  If there is no such process, then the HDC system is one which exposes the Treasury and the neediest families in the land to real abuse.  These are serious questions which need to be answered, and soon.  If there are indeed civil servants and consultant advisers who have been approving defective work, they need to be dealt with.  If that were so, it seems to me that such actions would amount to grave professional misconduct, at the very least.  Such people should be banned from any State work for a period, as a minimum.  The real horror story is the official silence on the fact that someone from the HDC had to approve these very same defective works.  Lying by omission – see http://guardian.co.tt/commentary/letters/2010/06/03/don-t-blame-contractors-only-shoddy-hdc-work.  That continuing dishonesty is the real horror story.  To remind readers that this is no new issue, please see – http://guardian.co.tt/news/general/2010/04/26/capacity-firms-weak-non-existent.

I close this week by renewing my call for Minister Moonilal to take leadership on this burning national issue.  A conference on revising Housing Policy should include participation from the leading civil society organizations such as the JCC, the National Land Tenants’ and Rate-payers’ Association, the Sou-Sou Land group, Habitat for Humanity and the Salvation Army.

Basic facts need to be compiled and distributed to seed the discussion.  The framework and philosophy need to be clearly articulated, if we are to get it right this time around.

The continuing presence of over 10,000 empty homes is intolerable – it is solid proof of a seriously failed policy.  Our silence has to be broken on this issue.  We cannot continue this way.

Related reading:

VIDEO: First Up Interview – 18 May 2010

VIDEO: First Up Interview – 18 May 2010

Afra Raymond sits down with Jessie May Ventour and Derek Ramsamooj for a discussion of matters pertaining to the construction industry prior to the national elections. Topics include UDeCOTT, the controversial Guanapo church and the Uff Commission Report.

  • Programme Air Date: Tuesday, 18 May 2010
  • Programme Length: 0:40:33

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.