Property Matters – The Gap Analysis

Property Matters – The Gap Analysis

In the previous article, the most glaring lacuna in the procurement puzzle was identified as the gap between the recommendations made by the State Enterprises and the decisions taken by the Cabinet in relation to the award of large-scale contracts.

In this context, a lacuna is an informative, usually intentional, gap in a discourse. Just consider that, in all the many statements on these interlocking issues, not one person has actually said ‘Cabinet ratified this recommendation by that State Enterprise‘ or ‘Cabinet made that decision which was not recommended by this State Enterprise‘. Fascinating, really, almost as if there is a joint select decision not to discuss how they reach their decisions. In relation to the Invaders’ Bay imbroglio, I dubbed that kind of thing ‘carefully cultivated confusion‘. You see?

A gap analysis measures actual against desired performance so as to establish what are the changes needed to improve results. This article will sketch a gap analysis of this crucial stage in the public procurement process and suggest the implications of those gaps. Continue reading “Property Matters – The Gap Analysis”

Property Matters – Horses for Courses

horses for coursesAfter the imbroglio with NIDCO’s award last month of a $400M contract to KALLCO for a 5Km stretch of highway, we have once again been treated to a series of related high-profile announcements.

On Monday, 16 October 2017, Minister of Legal Affairs, Stuart Young MP, announced the counter-suit by State-owned Estate Management & Business Development Co (EMBD) against five contractors; former Minister of Housing and Urban Development, Dr Roodal Moonilal MP; and its former CEO, Gary Parmassar. The five contractors were:

  1. TN Ramnauth;
  2. Mootilal Ramhit and Sons;
  3. Namalco Construction Services Ltd;
  4. Fides Ltd; and
  5. Kallco.

According to Young, there was over 18 months of investigative work to ground those counter-claims which allege collusion and bid-rigging, resulting in over $200M defrauded from the State. The most decisive allegation seems to have been that then-Minister Moonilal was making the decisions on those contract awards. I have not yet been able to read the EMBD’s court filing.
Continue reading “Property Matters – Horses for Courses”

Property Matters – Tobago Sandals part two

This Season of Reflection closes with yet another Sankofa Moment in which I will contemplate our past efforts so as to better understand our future. This huge project is being promoted, at the highest levels, by highly-optimistic and quite ambiguous statements.

The entire effort is based on notions of government having nothing to hide and the huge benefits to be derived from this project, albeit on rickety estimates. My colleagues and I have been engaged in a research program on these very issues for the last year. Our preliminary results pose a serious challenge to the notion of there being nothing to hide. In my view nothing could be further from the truth, that is how serious this is.

3hotelsThe three largest hotels in our country are State-owned – Trinidad Hilton & Conference Centre; Hyatt Regency and Magdalena Grand – with the hotels operated via Management Agreements. Our formal attempts to obtain information were met with a type of evasion and unresponsibility which was staggering. It reminded me of the infamous ‘Code of Silence‘ which belies the CL Financial bailout fiasco. No room for surprise there, after all, ours is a small country. As one of my confidantes often quips – It is like an Eleventh Commandment – ‘Thou shalt not be found out!Continue reading “Property Matters – Tobago Sandals part two”

Property Matters – The Affordability Hoax

The Affordability Hoax. Drawing by David Cave.

AFFORDABILITY IS THE MAIN PILLAR OF THE HOUSING POLICY SINCE 2002
—Key quote from HDC’s Home Ownership webpage

“…Housing Minister Randall Mitchell says Government has made housing more affordable to low and middle-income families unlike the People’s Partnership government which catered for high-income earners…” December 2016

Randall Mitchell, MP, Minister of Housing and Urban Development

Once again, the HDC and the Minister of Housing and Urban Development, Randall Mitchell, have been in the news with strong claims based on the HDC’s program and new mortgage offerings by TTMF. The headline in this newspaper on 10 February 2017 was “More people to access affordable housing“. In my view those are baseless and misleading official claims which readily qualify as ‘alternative facts’. Bigly so.

These statements are not unique to Minister Mitchell, who is relatively new to this portfolio, but enough is enough. Given the importance of public housing in the nation’s welfare arrangements and the sheer lack of reliable information on the issues, it is now time to dismantle the myth of an increasing supply of affordable housing. Continue reading “Property Matters – The Affordability Hoax”

Property Matters – Invaders’ Bay

invadersbay-bw

On 28 October 2016, the Appeal Court delivered its majority ruling upholding the decision of Justice Frank Seepersad on 14 July 2014 to order publication, under the Freedom of Information Act (FOIA), of the legal opinions on which the Ministry had been relying. The JCC had won its case at both the High Court and the Appeal Court, so I called for immediate publication of the requested information. The JCC made no such call, neither did any of my erstwhile colleagues.

At an Appeal Court hearing on 21 November 2016, the State obtained leave, with the JCC’s consent, to appeal this matter at the Privy Council. Whilst in Opposition, the PNM made repeated complaints against the secretive conduct of the Invaders’ Bay development by the Peoples Partnership. Now in Government, the PNM has elevated secrecy in public affairs to a new prominence.

Since Dr James Armstrong was appointed JCC President in December 2015, that organisation has been silent on the Invaders’ Bay matter. This had previously been of high importance as a major development in our capital city, which was proceeding illegally and improperly. The JCC now seems to have reversed its earlier position of pressing for publication of those vital, suppressed documents. Continue reading “Property Matters – Invaders’ Bay”

Property Matters – Examining the PPP

The HDC launched its first housing Public Private Partnership (PPP) on 3 November 2016 at Mahogany Court, a 160-apartment complex at Eastern Main Road, Mount Hope. It is being designed, financed and built, at a cost of $145M, by NH International, led by my erstwhile friend and colleague, Emile Elias, with completion due in December 2018.
nh-hdc-ppp

The PPP approach to public procurement is one in which the private sector assumes the risks and constructs a project with repayment of that investment taking place over a period of time, usually from the State’s recurrent expenditure. This a controversial public procurement method, with the detailed reviews of completed projects being heavily criticised for the fact that the private sector has not actually taken much risk. It seems that these contracts often contain provisions which shield the private sector from serious risks. The introduction of PPP into our public housing program therefore deserves careful scrutiny, if we are to avoid the serious losses experienced in more advanced jurisdictions.

This PPP uses no Public Money, the State’s only investment being the value of the land, which was not mentioned thus far. The approach was outlined at pg 31 of the 2017 budget as being one in which the contractor will provide short-term finance to design and construct new homes, which will then be purchased by approved applicants on the HDC’s waiting-list. Those purchases will be funded by TTMF and the purchase prices will be used to repay the contractor. Continue reading “Property Matters – Examining the PPP”

Property Matters – 2017 Budget Prospects

The 2017 budget is due to be presented on Friday, 30 September 2016 to an anxious nation. Having had to endure the literally unbelievable optimistic economic claims of the previous government prior to the September 2015 general election, we were told by then Central Bank Governor, Jwala Rambaran, in December 2015, that the nation had been in recession for 6 months. I tell you. Of course that message has now been repeated after the messenger was dismissed for various alleged offenses, but that is for another column.

Our levels of public expenditure have moved sharply upward, with only a single decline in 2010, as shown in the graph and table for 2005-2016. Those totals are derived from the estimates stated in the various budget statements and do not represent the actuals. In that period, estimated revenue was $534.57Bn with estimated expenditure of $574.6Bn. That balance between revenue and expenditure yielded a combined deficit of $40.125Bn – 84% of which ($33.67Bn) occurred under the Peoples Partnership government, 2011-2015. Continue reading “Property Matters – 2017 Budget Prospects”