Tag: construction industry

Invader’s Bay part 2: All the Ingredients for Bobol…

Since my previous article on this controversial proposal, we have seen that certain legal advice reportedly considered by the government has been featured in another newspaper.  If that is the advice the State is relying upon in advancing their Invader’s Bay proposals, we are seeing a large-scale act of intentional illegality and a worrying return to the ‘bad-old-days‘.

My main concerns are –

CONSULTATION?

Compare the lack of consultation at Invader’s Bay with what happens elsewhere.  In particular, the large waterfront lands near the city centre of San Fernando at  King’s Wharf, which has been the subject of ongoing public consultations over the years.  The press reports that various design and redevelopment concepts were presented to and discussed with a widely-based audience.

Whatever the criticisms one might make of the King’s Wharf proposals, it is undeniable that views have been sought from the public/stakeholders and various proposals have been made for consideration.

The JCC and its Kindred Associations in Civil Society met with Ministers Tewarie and Cadiz on 26 September 2011 to express our serious concerns.  Yet, when Minister Tewarie was challenged by the JCC and others as to the complete failure to consult with the public, the only example of consultation he could cite was the very meeting we had insisted on, which took place after publication of the Ministry’s Request for Proposals (RFP) and just about one week before the closing-date for proposals.

This Minister obviously does not consider public consultation to be a serious element in real development, notwithstanding the lyrics about innovation, planning and, of course, Sustainability and the Cultural Sector.  Just consider the way in which East Port-of-Spain is being discussed within that same Ministry.  The prospects for sustainable economic development of East POS must be linked with the Invader’s Bay lands, there is no doubt about that.  What is more, to carry-on as though the two parts of the capital can enjoy prosperity in isolation from each other is to trade in dangerous nonsense.  When criticising the large-scale physical development plans of the last administration, ‘dangerous nonsense’ is exactly what I had accused them of dealing in.

Public Administration must be consistent, reasonable and transparent if the public is to be properly-served.  To do otherwise is to encourage disorder and a growing sense that merit is of little value.  The decisive thing has become ‘Who know you’. 

We need to be informed now what planning permissions or environmental approvals have been granted on Invader’s Bay and on what terms.

The Legal advice

I have seen the two legal documents reported on in another newspaper and have to say that those are remarkable documents.

A critical undisputed point, is that the evaluation rules – the “Invader’s Bay Development Matrix and Criteria Description” – were only published after the closing-date.  The JCC made that allegation in its letter of 14 December 2011 and that was confirmed by Minister Tewarie in his Senate contribution on 28 February 2012.  That is a fatal concession which makes the entire process voidable and therefore illegal, since the proposers would have been unfairly treated.

Note carefully that in writing to seek legal advice in response to that challenge of December 2011, the fact that the tender rules were published ex post facto does not seem to have been the subject of a query as to its legal effect.

In one of the legal documents I saw, the penultimate para is chilling in its directness –

“…A simple answer to Dr Armstrong’s question on whether the RFP conforms to the (Central) Tenders Board Act is that it does. In reality, the entire tender process was not brought under the CTB Act and the matrix and criteria were forwarded to the tenderers AFTER they submitted their initial proposals to the MoPE…”

The ‘simple answer‘, which is what Senator Armstrong got from Minister Tewarie, is that the Central Tenders’ Board Act had been conformed with.  The next sentence is where we enter the other place…let us deconstruct it –

Phrase

Meaning of the phrase
‘In reality‘ The prior sentence is the official version we are going to tell Senator Armstrong, but here is what really happened.
“…the entire tender process…” Minister Tewarie has consistently held that there was no tender process, this is the State’s senior legal adviser calling that process by its correct title, two weeks before his statement in the Senate.
…“the entire tender process was not brought under the CTB Act…” The tender process was required to be brought under the CTB Act, since it was being done via a Ministry…but that did not happen.
“…the matrix and criteria were forwarded to the tenderers AFTER they submitted their initial proposals to the MoPE…” The State’s senior legal adviser is confirming here that the elementary good practice rules of tendering have been violated, rendering the entire process voidable.

There are two clear findings of illegality in that single paragraph by the State’s senior legal adviser.  Yet a ‘simple answer‘, which was ultimately deceptive, was suggested for Senator Armstrong.

The advice which featured in the press was from Sir Fenton Ramsahoye SC, seemingly obtained after the initial opinion just discussed.

The Ramsahoye opinion was reported to have ‘given Bhoe a green light‘ and so on, but I have serious doubts on that.

  1. Firstly, if there had been clear-cut, solid advice which would have exonerated its actions, the government would have published that so as to silence its critics.
  2. Secondly, having read it myself, their game is a lot clearer.

Ramsahoye’s mind seems to have been directed to the prospect of UDECOTT being granted a head-lease of the entire Invader’s Bay property and then granting sub-leases to the developers selected by the Ministry of Planning.  Those developers would then carry out the proposed development/s.

If that is the way this is proceeding, then there are two serious issues arising on UDeCoTT’s involvement –

  1. The Switch – While it is true that UDeCOTT can lawfully grant the subleases and operate outside the CTB Act, the burning question has to be when was this decision taken to give UDeCoTT that role?  Minister Tewarie has been adamant, since November 2011, that Cabinet took a decision that the Invader’s Bay project be removed from UDeCoTT’s portfolio to be placed within his Ministry.  When did that purported switch back to UDeCoTT take place?  Has Cabinet actually approved such a move?  The first advice looked at the development as it had proceeded and made the conclusions which I criticised above.  The second advice, contemplated a procedure which had been vigorously resisted by the responsible Minister.
  2.  The role of the Board – One of the most vexatious issues to be probed in the Uff Enquiry is the question of to what extent can Cabinet instruct a State Board.  That issue of undue Cabinet influence was also a large contention during the Bernard Enquiry into the Piarco Airport scandal.  Uff concluded, at para 8, that the scope of Ministers’ power to give instructions ought to be clarified.  There are several significant challenges if one accepts the formulation put onto the Invader’s Bay process in Ramsahoye’s opinion. Cabinet would have to instruct that UDeCoTT implement decisions taken by the Ministry of Planning etc.  As we have seen and as the legal advice has clarified, those decisions emerged from unlawful processes.  Is UDeCoTT obliged to follow unlawful instructions?  In the event of litigation, which is increasingly likely, will the members of UDeCoTT’s Board be indemnified by the State for their unlawful acts?   If that were the case, it would be repugnant, with deep echoes of the two earlier large-scale episodes of wrongdoing at Piarco Airport and UDeCoTT projects as cited above.

I stated earlier that this Invader’s Bay matter had all the ingredients for corruption.  I stand by those views.

Invader’s Bay payday?

invadersbay-smlInvader’s Bay has re-emerged from the shadows via PNM Senator Faris Al-Rawi’s budget contribution on Monday 23 September 2013 (pp. 168-175).  The twists and turns in this controversial proposed scheme are detailed at JCC’s webpage.

Invader’s Bay is a 70-acre parcel of reclaimed State land off the Audrey Jeffers Highway – just south of PriceSmart & MovieTowne – in the western part of Port-of-Spain.  Its value was estimated by the State in 2011 to be in excess of $1.2Bn, so these are prime development lands, possessing these attributes –

  • Water, Electricity and all urban services are readily available;
  • Flat/gently-sloping terrain;
  • Direct access to Audrey Jeffers Highway;
  • Waterfront location.

Before proceeding to the latest revelations, it is important to restate the main objections raised by the JCC and others with respect to this proposed development –

  • The Request for Proposals (RFP) was published by the Ministry of Planning in August 2011 seeking Design-Build proposals for the development of these lands and specifying an entirely inadequate 6 weeks for submissions;
  • There has been no public consultation at all, so the public has not been involved in this, the largest proposed development in our capital in living memory;
  • The RFP was silent as to the other three, extant strategic plans for the POS area, all paid for with Public Money.  Given that the RFP was published by the Ministry of Planning, that is a tragic irony, to say the least;
  • EIA – The RFP is silent as to the requirement for an Environmental Impact Assessment in a development of this scale;
  • The proposals were to be evaluated against the “Invader’s Bay Development Matrix and Criteria Description”, which was only published after the closing-date for submissions.  That is a clear breach of proper tender procedure, which renders the entire process voidable and therefore illegal.

Continue reading “Invader’s Bay payday?” →

VIDEO: Time to Face the Facts about Caribbean Corruption – 26 May 2013

This is the interview on Caribbean Corruption for ‘Time to Face the Facts‘ which was broadcast out of Barbados-based Caribbean Media Corporation on Sunday 26th May 2013.

The audience was regional via cable and global via their Facebook page. The interviewer is Jerry George and the format was a live call-in. Video courtesy Jerry George

Part 1:


Part 2:

Part 3:

‘Time to Face the Facts’

Afra Raymond is on ‘Time to Face the Facts‘ to discuss Corruption with host Jerry George…

Time to Face the Facts Show

This is a live telecast on Sunday 26th May 2013 – today being the 50th anniversary of the establishment of Africa Liberation Day, for those of us who still remember…- from 7pm to 9pm on Cable TV as CaribVision or streaming on the internet via their FaceBook page –https://www.facebook.com/timetofacethefactsshow?fref=ts

Please spread the word and be sure to tune-in…

Silence is the Enemy of Progress!

Best Wishes

 

Afra

Charting our losses: ‘A picture is worth a thousand words’

The last four articles in this series have focused on what I call ‘two sides of the same coin’ – the coin being the large-scale and improper use of Public Money.

I examined the THA/BOLT office project called MILSHIRV being undertaken with the Rahael group and the Calcutta Settlement land scheme in which the HDC acquired developed lands at several times the proper price the State could have paid.

Throughout this type of critique one has to strive for effective balance and fundamental integrity.  The extent of the waste and/or theft is never easy to pinpoint when one is working from outside and relying solely on published documents, but my best efforts to establish those facts is what is presented.  Of course it is impossible to say for sure that any amount of money was stolen in a particular project, hence the phrase ‘wasted or stolen’.

Objectively, it does not matter whether the money is wasted or stolen, if it is ultimately unavailable for the benefit of the Public.  Once spent, that Public Money is gone forever, which is why Value for Money is of such importance in any proper Public Procurement system.

Subjectively, however, the errors of inexperience or poor process must be differentiated from an active conspiracy to defraud.  Although the objective measure of loss might be identical in terms of the dollar-amount, there are different long-term consequences.  Innocent errors and miscalculations can be rectified over time by ongoing review processes.  Deliberate conspiracies to defraud require concerted and well-grounded attacks in order to be eliminated.  What is worse about the deliberate conspiracies is that they affect the very atmosphere in which public business is conducted.

We end up with a situation where it pays to pay a bribe and the decision not to pay is to suffer delay.

That is why we are where we are today.  Simple so.

One of the important lessons emerging from the Wall St disaster is that the variety of financial regulators with their varying rules and experiences allowed financial players to engage in ‘Regulatory Arbitrage’. That was  the scenario in which financial players shopped for pliable or suitable regulators within which to channel their products, resulting in the unprecedented financial disaster we are all living through.

Here in T&T we have seen a similar pattern in our financial markets, but the point being made here is that it has also emerged in the Public Procurement arena, with TIDCO paving roads; the rising profile of State-owned entities which were deliberately excluded from the formal procurement controls; those same companies breaking their own rules and so on. That is the emergence of a toxic kind of ‘Procurement Arbitrage’, which is the reason why we must have over-arching regulations to control all transactions in Public Money.

So, there are two types of losses being charted here –

  1. Firstly, inexperienced officials or poor processes can approve wasteful uses of Public Money through sheer ignorance.
  2. Secondly, there is deliberate conspiracy to defraud the Treasury of our precious Public Money.

Only a Court can establish whether the lost Public Money was wasted or stolen, so I have ventured no opinion as to which is which. Readers can reach their own conclusions.

These charts illustrate the extent of the waste or theft of Public Money in the THA/BOLT and Calcutta Settlement projects.

‘A good example is worth a thousand words‘

THA/BOLT – MILSHIRV Project

Rental Rates THA- BOLT chart
Occupancy Excess THA-BOLT
Rental increase chart with table THA-BOLT

 

Click on the charts above to see full size version

Calcutta Settlement Land sale – Eden Gardens

stamp duty Eden gardens Chart 1 20130405-1
Acquisition options HDC chart 2 20130405

 

Click on the charts above to see full size version

Calcutta Settlement review

The simple, inescapable fact is that the State could have lawfully acquired the ‘Eden Gardens’ property for less than $40M.  The HDC paid $175M in November 2012 to Point Lisas Park Ltd (PLP) for that property, which is the reason I am calling this an improper use of Public Money.

Despite having available the advice of the Commissioner of State Lands, the Commissioner of Valuations and various attorneys at HDC and so on, the Cabinet approved this transaction.  This Cabinet, with two Senior Counsel at its head and several other seasoned legal advisers, appears to have been unaware of, or intentionally ignoring, the legal safeguards.

Some readers may be surprised at those assertions, so here are my reasons for making such.

The last two articles examined the steps leading to the HDC’s purchase of land at ‘Eden Gardens’ in Calcutta Settlement.  In my opinion that transaction, as well as the one which preceded it, are both highly improper and very probably unlawful.  The HDC purchase must be reversed and the responsible parties investigated/prosecuted as required by our laws.

This ‘Eden Gardens’ episode is an object lesson in what can go wrong when elementary policy is set aside for stated reasons of expediency.  Apart from the lack of any Needs Assessment, the unclear role of the Commissioner of State Lands is a source of serious concern.  That Commissioner’s role is to advise the State on the strategic implications of its land policies and transactions, so this is a straight example of a case which required a solid input from that critical State Officer.

So, what should have happened?  How would a proposal like the ‘Eden Gardens’ one have been handled if the various parts of the system were functioning properly?

When parties are in commercial negotiations, there is always a Plan ‘B’, to be adopted in case the main plan goes awry.  Each side has a different Plan ‘B’, since they have different interests.

What was Point Lisas Park’s Plan ‘B’ in case their negotiations with the State were unsuccessful?  While we can never know for sure, PLP being a private company, the fact that those lots were widely offered at $400,000 can allow us to form a view as to the benchmark they were likely using.

The State’s Plan ‘B’ is far simpler to establish, since there exists the legal power to compulsorily acquire private property for a public purpose.  That was the third unique facility enjoyed by the State as set out in the previous article.

In the case of a landowner making unreasonable demands, the State has the lawful option of compulsorily acquiring the property.

The Land Acquisition Act 1994 (LAA) establishes the right of the State to compulsorily acquire private property for a public purpose.  At S.12, the LAA specifies the rules of assessment used to arrive at the sum offered to the owners of private property interests being acquired.

S.12 (4) states –

“…(4) In making an assessment under this section, the Judge is entitled to be furnished with and to consider all returns and assessments of capital value for taxation made or acquiesced in by the claimant and such other returns and assessments as he may require…”

The point in this case being that, having registered a purchase at $5M in February 2010, PLP would have been unable to legally resist a compulsory purchase which adopted that price as its basis.  Even if the State, in recognition of the roughly $29M spent by PLP on building the infrastructure for ‘Eden Gardens’, were to add that sum, the final offer would only be about $34M.

Those provisions at S.12 (4) of the LAA are a critical safeguard against persons who might seek to under-declare their properties to evade taxes, then seek to make exorbitant claims if the State seeks to acquire compulsorily.  S.12 (4) prevents the State from falling victim to any such games, it is a critical safety-valve to protect our Treasury from those who seek to pay as little as possible when taxes are due, but boldly make huge claims from the Treasury when seeking to sell.

That is why I am calling for this matter to be swiftly investigated and the responsible parties prosecuted to the full extent of the law.

This was in reality a potent dilemma for PLP, in that if they were served with a proper compulsory purchase notice, they would have either had to stick with the $5M figure as a 2010 baseline, or reject that deed and incur the strong penalties at S.84 of the Conveyancing and Law of Property Act.

One of the three deeds executed on Wednesday 3 February 2010 recorded the purchase of ‘Eden Gardens’ for $5M, which is a massive understatement of consideration.  The true market value of that undeveloped property at that date would have been of the order of $50M, so the loss of Stamp Duty to the Board of Inland Revenue would have been in excess of $3.0M.  The underpayment of Stamp Duty is tantamount to a defect in title of a property.  Are we witness to the State making a massive over-payment for marginal lands with defective title?

Did the Cabinet and the HDC receive the proper advice from the Commissioner of State Lands and the Commissioner of Valuations, as well as the other legal advisers?  If yes, that advice was plainly not followed, so in that case the question would have to be ‘What caused the Cabinet and the HDC to abandon that sound advice?‘

If the true situation is that the proper advice was not provided, we need to know why.  If the advice was not sought, then we need to know why.  If the advice was sought, but not provided, those advisers need to be rusticated so that our processes are protected from more of this nonsense.

The State has an overriding duty to comply with the law and be exemplary in its conduct.  That is not negotiable, if we are to build a society which is orderly, progressive and just.

Episodes such as the ‘Eden Gardens’ sale and the THA/BOLT deal continue the erosion of Public Trust and the loss of that intangible, almost-forgotten, source of ‘soft power’, the Benefit of the Doubt.

This Prime Minister has made repeated statements that any evidence of wrongdoing will be investigated, so that the offenders can be prosecuted according to law.  These three articles have detailed the evidence and breaches of sound public policy, so it is now over to the authorities.

The ‘Eden Gardens’ transaction is a prime example of a large-scale economic crime against the State and the interests of its citizens.

Again, I ask – ‘Who were the beneficiaries?‘

The final point here is that the parties to the PLP purchase and improvement of ‘Eden Gardens’ are now in litigation, with the contractors – SIS Ltd. – suing Point Lisas Park Limited for various monies and demanding an account of the $175M.  Case CV 2012 – 5068, so we have interesting times ahead.

AUDIO: The John Wayne Show Interview – 30 June 2012

Afra Raymond chats in ‘The Barbershop‘ with John Wayne Benoit on i95.5FM about the CL Financial bailout and Public Procurement issues and other topics. 30 June 2012. Audio courtesy i95.5FM

  • Programme Date: Saturday, 30th June 2012
  • Programme Length: 0:49:03 + 0:35:47

Part 1:
Part 2:

VIDEO: Early Morning Interview – 4 May 2012

JCC President Afra Raymond appeared on Early Morning with Hema Ramkissoon to discuss ‘Government fails to deliver?’; a question on the minds of the construction industry. 04 May 2012. Video courtesy CNC3

  • Programme Air Date: 4 May 2012
  • Programme Length: 0:16:18

VIDEO: JCC Press Conference – 02 May 2012

The JCC hosted a Press Conference recently to discuss issues in the country in the construction industry. Afra Raymond’s contribution to the press conference is here. 02 May 2012. Video courtesy JCC

  • Programme Air Date: 2 May 2012
  • Programme Length: 0:13:33