The previous article opened with news of the unexpected and welcome cancellation of the huge HDC/CGGC contract to design and build 5,000 new apartments.
Sad to say, but this bitter, bizarre HDC/CGGC contract and its reported cancellation requires that my Season of Reflection closes with further, more blatant, counterfactuals. Last week I quipped about the amazing scenes we were witnessing in this episode, but the more recent statements denote a sharp descent.
This recent barrage was an epic of Carefully Crafted Confusion.
For example, the important issue of whether the Attorney General advised on the contract has been serially evaded.
Here are Acting PM Imbert’s replies to Parliament on Friday 13th September 2019 –
“...Mr. Indarsingh: Thank you, Mr. Deputy Speaker. Can the Acting Prime Minister state whether this contract for over half a billion dollars was vetted by the Attorney General of Trinidad and Tobago?
Mr. Deputy Speaker: I will not entertain that question at this time, Member…”
“…Mr. Rodney Charles (Naparima): Thank you, Mr. Deputy Speaker. Can the Acting Prime Minister state whether any due diligence by the Office of the Attorney General was undertaken prior to the signing of the Framework Agreement between the China Gezhouba Group International Engineering Company and the Housing Development Corporation on July 13, 2018?
The Acting Prime Minister and Minister of Finance (Hon. Colm Imbert): Mr. Deputy Speaker, I am advised that the framework agreement did not require the Attorney General to give an opinion on the contract.
Mr. Charles: Thank you, Mr. Deputy Speaker. Is it the norm for state enterprises to enter into contracts in the order of this magnitude without reference to oversight by either Cabinet or the Attorney General?…
Hon. C. Imbert: Mr. Deputy Speaker, firstly, the Housing Development Corporation is a statutory authority, it is not a state enterprise. It has its own rules according to statute, and the Housing Development Corporation does have the authority to determine its own contractual affairs…”
In the first case, the Deputy Speaker refused the question and in the second, the Acting PM simply said that the AG’s advice was not required. As yet, we have no idea if that advice was sought and provided. Did the AG advise? Yes or no?
Another aspect of this is that, as a Statutory Corporation, HDC is governed by its Act, which states at clause 12 –
“…12. The Minister may give to the Board directions in writing of a specific or general nature to be followed in the performance of its functions or the exercise of its powers under this Act, with which the Board shall comply…”
Clearly, HDC is legally bound to comply with any lawful instructions from its line Minister, so any statement to imply its independence is simply false and misleading.
Then PM Rowley’s statements on Monday 16th September 2019 were intended to shield HDC Chairman, Newman George.
“…We didn’t put Newman George to run the HDC…” is a perfect counterfactual, since the HDC Board is appointed by Cabinet, of which the PM is Chairman.
On 3 December 2015, the government news service advised that ‘Housing Minister appoints new HDC Board’, inclusive of its Chairman, Newman George.
I was intrigued by these parts of Dr Rowley’s statement –
“…The PM said Cabinet was unhappy with some aspects of the contract, including a conflict between the plan to sell apartments (which people may not be able to afford) and Cabinet’s desire to build rental units. He also lamented the old deal would have required the HDC to get help from several ministries and may have been too accommodating to a foreign entity…”
Could it be that we will see a move towards affordability and rental units?
At pg 17, clause 1.4 states that –
“…The contract shall be governed by Law of Republic of Trinidad and Tobago…”
Apart from the awkward phrasing, that is sound.
At pg 34, sub-clause 20.6 states that –
“…Any dispute, controversy or claim arising out of or relating to this contract…shall be referred to and finally resolved by Arbitration under the rules of Arbitration of the International Chamber of Commerce…the arbitration award shall be final and binding upon both Parties…the place of Arbitration shall be London, England…the arbitration shall be conducted in British English…”
So far so good, but there is more.
The contract contained two payment guarantees. The first, in which the HDC guaranteed the full sum due to CGGC, and in the second of which HDC guarantees the retention held in respect of defects etc. Both those guarantees specify –
“…This guarantee shall be governed by the laws of the People’s Republic of China and shall be subject to the Uniform Rules for Demand Guarantees, published as No 758 by the International Chamber of Commerce…”
Given that our Public Money was to fund this huge project and support these guarantees, it is unacceptable that the governing law was not our own. Quite apart from the issue of the governing law, it is striking that these solid guarantees are seldom, if ever, enjoyed by local contractors.
ADDENDUM: Who signed what?
The Framework Agreement of 13 July 2018 was signed by HDC’s Managing Director, Brent Lyons (pg 11).
The Contract Agreement of 17 May 2019 was signed by HDC’s Chairman, Newman George (pg 6).