Tag: Uff Commission

State Enterprises and Public Procurement

procurement cycleState Enterprises were created to enhance the pace and quality of Public Procurement, yet they are now the scene of the most bedeviling paradoxes in the entire system of public administration.

Some of the key procurement issues which arise in this arena flow directly from the split character of the governance model.

The basic rationale for the existence of State Enterprises is they can be more effective because they are not bound by the strict rules which control the conventional civil service.  The absence of those rules is supposed to allow more latitude in terms of hiring, borrowing and contracting.  State Enterprises can hire professional staff at market rates, enter complex commercial arrangements and borrow on commercial terms, all of which should amount to significant improvements in public services.

The typical State Enterprise is owned by the State, with the shareholding held by the Corporation Sole, an exceptional legal creature which exists within the Ministry of Finance.  Apart from its owner, the State Enterprise will sometimes have a ‘line Ministry’, which would be its sole or main client.  For example, the Ministry of Housing & the Environment is the sole client of the Housing Development Corporation (HDC) and the Ministry of Education is the sole client of the Education Facilities Company Limited (EFCL).

State Enterprises can operate within the existing Companies Act or be established by a separate Act of Parliament, as is the case with the HDC.  That legal framework ought to ensure that a satisfactory standard of corporate governance and accountability is maintained.

The fact is that many of the Directors and Officers of State Enterprises are political appointees, which puts the entire rationale onto a doubtful footing.  Because the salaries and perks are so attractive, not to mention the commercial opportunities, the State Enterprises are prize targets for political appointments and favours.

Some of the main issues which arise when one is considering this sector are –

  • the number of State Enterprises – there needs to be a reduction in the number of State Enterprises.
  • If the politicians can instruct the State Enterprise, via the Permanent Secretary, on specifics, what is the purpose of the Board?
  • Given the preceding point, do the Board members of State Enterprises have the same duties under the Companies Act as in the case of other registered companies?
  • In terms of our proposed Public Procurement legislation, what is the boundary between the fiduciary responsibility of the Directors and the contracting powers of an ‘authorised officer’ – i.e. someone identified as having the power to enter certain contracts?

Proceeding along the Procurement Cycle and using the International Waterfront Centre (IWC) as an example –

  1. Needs Identification – This is the first stage of the Procurement Cycle and it ought to be an objective assessment of needs.  In this case, the IWC was part of a huge, disastrous boom in building new offices in POS – this is all detailed at ‘Capital Concerns – New Office Buildings’ – here.  Before the boom started in 2005, there was 6.5M sq. ft. of offices in Greater POS, at the start of the boom some 3.2M sq. ft., or an additional 50% of the capital’s office supply was approved for construction.  Please remember that Nicholas Tower, which took 5 years to fill, is only 100,000 sq. ft.  Just under 2.8M sq. ft of new offices was actually built in POS in the last 5 years, with 2.3M sq. ft. of that space (82% of it) actually built by the State.  Every State project identified at the outset was executed, but in stark contrast, virtually half the private sector projects stopped before construction began.  The obvious consequence of that over-building by the State has been a collapse in the office rental levels in the capital, which is detailed in the next point.
  2. Reconcile Needs with Funds – This is the stage at which a developer ought to consider critical questions such as the cost of funds, the cost of the project and the returns from it.  That is sometimes called a feasibility test and this is where the IWC dissolves into utter confusion.  When then PM Manning addressed the Senate on 13May 2008, he emphasized that every UDeCOTT project was approved by Cabinet and had been vetted by a Finance Committee on Financial Implications.  That is the most important address if we are to see the depth of the problem with these State Enterprises – see here.  The break-even point on such projects is the rent at which the project can repay its costs of construction – at minimum, those costs would have to include for land, design, construction and finance.  On that ‘bare-bones’ basis, which makes no allowance for maintenance or periods when spaces are vacant, the break-even rent for the IWC is in the $30 per sq. ft. range.  This is the largest single office building ever built in our capital and the best rents ever achieved for space of comparable quality is about half the break-even figure.  There is no way that the IWC project could ever have satisfied any proper feasibility test.  Every new office project started in our capital only increased the supply of offices, which reduced the market rent, which, in turn, increased the gap with the break-even rent.  Under oath at the Uff Enquiry, Calder Hart tried to rationalize the confusion when he confirmed that only one of UDeCOTT’s projects had been subject to a feasibility test and that one was the IWC.  He was even so bold-faced as to estimate a break-even rent in the $20 range, but, when pressed, had to admit that he had left the cost of the land out of the calculations!  That is the extent of the deformed thinking which typified the best schemes of the leading State Enterprise.  Only one of the State’s many office development projects tested for feasibility and in that case, the cost of the land is omitted, yet that same land is included as a part of UDeCOTT’s Assets at $224M in that very financial year.  Political imperatives were allowed to pervert a process which exists to protect the public interest from this kind of empire-building.  But it is in the next part that the full confusion comes to bear.
  3. The rest of the procurement cycle – This is the stage at which tenders were invited for design-build and the winning bidder selected, the project built and the complex opened.  According to UDeCOTT’s statements, the IWC project is its flagship and an outstanding success, having been built on time and within budget.  Even if one accepts those assertions as being true, the IWC project is an example of the tragic consequences of a limited application of proper procurement processes.

As a result we have a completed project which is said to have been built on time and under budget, yet makes no economic sense and has a break-even point at some uncertain point in the future, if ever.

Some collateral damage needs to be noted, to quote one of the former PM’s notable phrases.  Contrary to his statement to the Senate which is cited here, UDeCOTT did not publish its accounts since 2006, which is a breach of both the Companies Act and the Ministry of Finance guidelines.  A total breach of the elementary norms of good corporate governance, which is the protection the private sector structure was supposed to give us taxpayers as a safeguard.  Because of the political element in the operation, we can see clearly that UDeCOTT was carrying-out the instructions of the Cabinet and those Directors have not been punished or censured in any way, apart from their public dismissal.  The consequence of those breaches being condoned at the largest State Enterprises – UDeCOTT and HDC – how does one get the smaller and less-visible State Enterprises to conform to good governance?

If the priest could play, who is we?

This is why we need a complete review of our procurement controls.

An Overview on the CIVIL SOCIETY submission to the Joint Select Committee on PUBLIC PROCUREMENT

This special publication is dedicated to the important issue of Public Procurement.  It is written by the a private sector group, headed by the Joint Consultative Council for the Construction Industry (JCC).  The JCC consists of:

  1. Association of Professional Engineers of Trinidad & Tobago (APETT)
  2. Trinidad & Tobago Institute of Architects (TTIA)
  3.  Board of Architecture of Trinidad & Tobago (BOATT) – observer status
  4. Trinidad & Tobago Society of Planners (TTSP)
  5. Trinidad & Tobago Contractors’ Association (TTCA)
  6. Institute of Surveyors of Trinidad & Tobago (ISTT) comprising Land Surveyors, Quantity Surveyors and Valuation Surveyors.

The private sector group consisted of –

  • Joint Consultative Council for the Construction Industry
  • Trinidad & Tobago Chamber of Industry & Commerce
  • Trinidad & Tobago Manufacturers’ Association
  • Trinidad & Tobago Transparency Institute.

The members of that Private Sector group were part of the Working Party on the Public Procurement White Paper, which was published in August 2005 and laid in Parliament the following month.

The Peoples’ Partnership’s manifesto, at page 18, commits to –

Procurement

  • Prioritise the passing of procurement legislation and appropriate rules and regulations
  • Establish equitable arrangements for an efficient procurement system ensuring transparency and accountability by all government departments and state enterprises…

In keeping with those campaign promises, the Minister of Finance tabled two legislative proposals in Parliament on 25 June 2010.  Those were a Bill to amend the Central Tenders’ Board Act (originally prepared in 1997, when Ramesh Lawrence Maharaj was Attorney General) and the Public Procurement Bill (originally prepared in 2006, after publication of the White paper).  A Joint Select Committee (JSC) was established on 1 October 2010 to examine those proposals, invite submissions and make recommendations.

The stated target of the PP government is to have the new Public Procurement legislation in place by the first anniversary of their electoral victory – i.e. by 25 May 2011.

Our Private Sector/Civil Society group reconvened last year and made a joint submission to the JSC in December 2010 – it is available here from the JCC‘s website.  Our Private Sector group has had several meetings with the JSC – which was chaired by Education Minister, Dr. Tim Gopeesingh – but the results of those are not featured in this publication.

This special publication is intended to inform readers of the necessity for new Public Procurement legislation in our country and to set out the objectives of our proposals.

The guiding Principles

 These are –

  • Transparency
  • Accountability
  • Value for Money

The broad picture

One of the most serious findings of both the Bernard Enquiry (Piarco Airport Project) and the Uff Report (UDeCOTT and HDC) was the extent to which the largest State projects were being executed outside of any normal system of accountability.  The very purpose of setting up these companies and procurement methods was to bypass the Central Tenders Board.  The natural consequence of that way of proceeding being that if the CTB could be sidelined as a deliberate act of public policy, then other important elements of the regulatory framework are violated as a matter of course.  In the case of both UDeCOTT and NHA/HDC, accounts were not filed for years – since 2006 for the former and 2002 for the latter – in flagrant violation of the rules and laws.

These were the largest State projects – often described as being the flagship or centre-piece of this or that government’s policy – yet they were breaking the main rules and getting away with it.  The ‘getting away with it’ is the cloudy part of the picture, because we never hear of any penalty being sought against those State Enterprise Directors who broke the governance rules.

But that is the very centre of the puzzle and we need to understand it before we can try to unlock it.  So, we are told, time and again, that the only way to really get important and urgent projects done in the correct fashion is to go outside the rules.  The stated reasons are that the old rules are too cumbersome, slow etc… and yet, we end up, time and again, in the same mess.

Some of the features of these fiascos are –

  • Huge cost over-runs on virtually every project.
  • Unfinished projects which virtually no one can make sense of – to date there is no proper rationale for the huge and loss-leading International Waterfront Project, apart from Calder Hart’s bogus explanation to the Uff Enquiry.
  • A gross burden on our Treasury going forward – The continuing delay in completing the accounts for these State Enterprises shows how difficult it is to work out exactly what the State owes and to whom.

What all that tells us is that the existing rule-book seems to be blocking progress and the attempts to bypass it have done little better, if not far worse.

The dismal picture on public procurement is not limited to construction projects and can be found in all the other areas.

A new approach is needed and that is what is at the foundation of these legislative proposals.

What is Public Money?

Central to the new proposals is that any new Public Procurement system must be in full effect whenever Public Money is spent.

‘Public Money’ is defined at page 5 of our proposals as money which is either due to, or ultimately payable by, the State.

Our proposals are intended to form part of a financial management reform package to include for a National Audit Office and a Financial Management and Accountability Bill.

The intended move is towards a greater transparency and duty of care in terms of how taxpayers’ money is spent.  Our citizens, particularly the unborn ones who will have to pay for some of the wasteful schemes which are littering the landscape, deserve no less.

The new equation confronting us is –

Expenditure of Public Money
minus            Accountability
minus            Transparency
equals         CORRUPTION

We must fix that.

So, what is at stake here?

Our society is beset by large-scale corruption, which sustains wrong-headed decision-making.  The wider social consequences of that toxic culture are now hatching, with a vengeance, in the naked violence and wily crimes which pre-occupy our head-space.

The killing-fields of East POS, the decimation of African urban youths, the URP and CEPEP gangs and the battle for turf are all part of this picture.

As long as our society continues to applaud and reward dishonest, corrupt behaviour, we will continue sliding downhill.

The structure of our economy is that most of the country’s foreign exchange is earned by the State in the form of oil & gas earnings.  The rest of the society relies on the State and its organs to recycle those earnings for the benefit of those of us not directly engaged in the energy sector.

For that reason, the State casts a very long shadow in our country, far more so than in other places.  Virtually every substantial business relies on the State and its organs for a significant part of its earnings.  A healthy connection with the State is essential for good profits.

But that is where the particular problem is, since the conduct of the State and its organs is often found to be lacking in the basic ingredients of fairplay, accountability and transparency.

If the State is the biggest source of funds in the place and the State is not playing straight at all, a serious question arises – How can we hope to uplift our society?

The State has an over-riding duty to behave in an exemplary fashion in its policy and operations.

Due to its tremendous footprint, the State has to behave in that exemplary fashion if we are to move out of this mess.  A positive shift in State conduct will have a salutary effect on the commercial culture and wider society, one that is long overdue.

So, who spends Public Money?

We have a vast, expensive and confusing array of organs, all of which are authorized to spend our money.  For a country of about 1.4M people, we have 26 Ministries.  Just consider that the UK, with a population of about 65 million, has 19 Ministries and the USA, with a population of about 300 million, has 16 Ministries.  For a Caribbean example, Jamaica has twice our population and 16 Ministries.

Quite apart from the number of Ministries, there are two further layers of agencies which also have the power to spend – our country has 73 Government Bodies and 58 State Enterprises.

Given the vast range of operations undertaken by these agencies, any new system would have to be flexible in order to cover all those types of transactions.

The main features of the new system

Three new independent organs will be created –

    1. The Procurement Regulator (PR), with the duty to create overall Guidelines and a common handbook to guide the public procurement process.  The Regulator is appointed by the President in his own discretion and reports only to the Parliament.  Agencies can create their own procurement handbooks, once these conform to the overall Guidelines, as approved by the Procurement Regulator.
    2. The Public Procurement Commission (PPC) will be the investigative arm of the new apparatus to which complaints will be directed.
    3. The National Procurement Advisory Council (NPAC) will be purely advisory and comprises 14 members from a broad range of named private sector/civil society organisations – the JCC, Manufacturers’ Association, Chamber of Commerce, Transparency Institute – as well as the Ministry of Finance and the Tobago House of Assembly.

All expenses are to be drawn on the Consolidated Fund, with the Procurement Regulator and Advisory Council required to report annually to Parliament.

A vital part of our proposals is that Cabinet, Government Ministers or politicians are prohibited from instructing or directing these new agencies in any way.

They are intended to be entirely independent of political influence, which conforms to the proposals in the White Paper.

That freedom from political influence was also specified in both the 1997 and 2006 draft legislation.

A Complaints Procedure

The proposed system will create clear rights to make complaints or report wrongdoing.  Those rights are an important aspect of any modern procurement system and we propose three types of complaints/investigations –

  1. Potential tenderers/suppliers can complain, in the first instance directly to the Agency with which the tendering opportunity resides, then, if that is not dealt with satisfactorily, they can complain to the Public Procurement Commission.  Ultimately, the right to seek the protection of the High Court is preserved, once the established complaints procedure has been followed.
  2. The Whistleblower – We are proposing that whistleblowers be given legislative protection and practical means to bring their complaints direct to the Public Procurement Commission.
  3. The Public Procurement Commission can also, on its own initiative, start an investigation into an area of concern.

There are strict time-limits for acknowledgement and resolution of complaints.

Our proposal is for the Public Procurement Commission to have powers to punish both frivolous complainants as well as parties found to be in breach of the new system.  Those can range from fines to embargoes, during which offending parties can be banned from tendering opportunities.  Offending public officers can be subject to both fines and/or imprisonment.

The concern over the cost of the new apparatus

One of the most frequently expressed criticisms is that as critics of the rationale and operations of significant State Enterprises, we seem to be proposing a new series of state-funded agencies.  Some people have pointed out that these offices are unlikely to be cheap, particularly the PPC, which is to be constituted as a standing Commission of Enquiry under those existing legal provisions.

Yes, there will be new agencies and yes, they will cost money.

Given the recent revelations as to the cost of the Uff Enquiry – already estimated to exceed $50M – there are genuine concerns that we could soon have three new state-funded agencies which could absorb maybe $100M a year.

The challenge here is to move beyond the obvious and factual observations so that we can consider the decisive factors.  Our proposals have the promotion of Value for Money as one of its founding principles and that is good for the public.  So, how can we measure the value for money of these proposals, at this stage?

The scale of public procurement spending

In the case of expenditures direct out of the Ministries, the 2011 Budget has an anticipated capital expenditure for the Ministries of $7.050Bn, as per para 8 at page 4 of the Public Sector Investment Program (PSIP).

Also in that Budget there is an anticipated capital expenditure for the State Enterprises of $6.725Bn, as per the Foreword at page 4 of the Supplementary Public Sector Investment Program (Supplementary PSIP).  The combined figure of $13.775Bn is only for projects, so it excludes the salaries, rents and normal running expenses.  Please note that other elements in public expenditure, beyond just capital projects, will be covered by these proposals.  The guiding principle being that those activities involve the expenditure of Public Money.

There are very limited exemptions from the proposed provisions and those can be viewed at the JCC website.

I am also sure that there are other ways in which Public Money is being expended which are not shown in the national Budget, so the amounts are surely larger than that estimate.

The potential for savings

The scale of the public transactions, involving Public Money, which will come under the control of this new system is huge, at least $14Bn in size.  Even if the new system only saves 5% of that sum every year, we can easily justify an annual running expense in the $100M range, as mentioned earlier. 5% of $14Bn is $700M.

In the next 30 days, we expect our Legislators to make the crucial decisions on this series of proposals and we all need to be vigilant to preserve the key points.

Those key points would include –

  • Heads of Independent organs to be appointed by the President
  • Separation of the Regulator from the Investigator
  • Regulations laid in Parliament for negative resolution, with no Ministerial or Cabinet approval required.
  • Independent Organs funded from the Consolidated Fund, with no requirement to seek a Ministerial approval or Budget vote.
  • Accountability is ensured by the requirement to report annually to Parliament.
  • Private Sector/Civil Society oversight via the National Procurement Advisory Council.
  • Proper provisions for complaints and Whistle-Blowers.

The ultimate question, given what we know now, is – Can we afford not to take this step?

At this unique and challenging moment in what has been a long, twisted journey, the prospects of more corruption and waste are grim.

For these proposals to succeed, the legislators will have to vote in favour of a new law which reduces their power and discretion.  To some, that might be an impossible contradiction and an unreasonable thing to expect, but there will be considerable political credit to the account of those who make this change happen.  Our citizens deserve no less.

2010 Review

This is the time to reflect on the changes we have witnessed in the last year and the several challenges arising from those. This column will attempt to combine the ‘Property Matters’ concerns with the ongoing examination of the CL Financial fiasco.

The Uff Report

Professor John Uff. Photo courtesy Trinidad Guardian
Professor John Uff

For me, the largest single event this year was the completion of the work of the Uff Commission of Enquiry into the Public Sector Construction Industry, with particular reference to UDeCOTT and the HDC.  The controversial Commission of Enquiry was at the centre of widespread public concerns as to the level of corruption in the State construction sector.  To his credit, the Enquiry Chairman, Professor John Uff QC, PhD, insisted that the proceedings be televised and the results of each day’s hearings were also posted to its website.

The Uff Report made history in this country, since it is the first time that a government has published the Report of a Commission of Enquiry.  That is no small accomplishment and despite the fact that these massive wrongdoings took place under the last PNM administration, the act of publication has to be welcomed.

But there are still challenges, because, for whatever reason, the Uff Commission’s website, www.constructionenquiry.gov.tt has now been shut down, which is a real pity, since it contains the important testimony of many witnesses on the issues in this area.  That website needs to be re-opened and I am calling on the Attorney General, under whose Ministry the Enquiry was operated, to ensure that takes place.  It is no large expense to have these important documents made available to the public.  In light of their educative content, I would suggest that the actual documents be housed at UWI, as they have a direct bearing on the deliberations of the Engineering and Social Sciences Faculties.

Of course we had the sight of a fleeing Calder Hart and a defeated Patrick Manning, his PNM cohorts drinking  bitter tea for his fever, all attributable in my view to the groundbreaking Uff Commission.

Looking forward, we have the fact that the 91 recommendations of the Uff Report were adopted by the Peoples Partnership in the run-up to the 24th May General Election.  We have now been promised that those are to be implemented by Minister of Justice, Herbert Volney.  We await Volney’s early report as to the implementation.

In that connection and taking from the PNM example, I am, once again, calling for the publication of the report of the Commission of Enquiry into the Piarco Airport project.  The Bernard Report must be published now.

CL Financial bailout
A Bailout Cheque payed by taxpayers to CLICO was stoppedThe other huge event of the year was the budget speech on 8th September 2010, in which Finance Minister, Winston Dookeran, disclosed publicly that he was revising the terms of the CL Financial bailout.  That bailout was a hugely suspect act, the largest financial commitment ever undertaken in this country, without proper due diligence or even any proper ventilation in the Parliament.  Our Republic had never been so financially violated and in broad daylight.  It was encouraging to see the Finance Minister take the point to its logical conclusion and of course that brought about the large-scale organisation of various aggrieved groups to put their point.

That series of organisations, committed to the doubtful mantra of the guaranteed investment – whatever that is – took on a series of bizarre and increasingly combative stances.  The signature theme being that ‘We are not responsible for our decision’.  We were being treated to a spectacle worthy of any of the ‘Ole Mas’ presentations of yore, in which successful investors – on average at least $700,000 was invested by each of these ‘protestors’ – having benefited from the operation of the capitalist system were seeking 100% redemption from the State.

The entry of the Prime Minister into this debate on 1st October was in my view a turning-point in our development.  For the first time in my memory a politician, who had the majority, to achieve the significant changes which had been tabled, stepped back from that act of sheer power to attempt an act of persuasion.  It was a signal lesson in the reality of possibility in our lifetime.  Even if one is amongst the Clico Policyholders’ Group (CPG) and feeling aggrieved, the calm audacity of the Prime Minister’s decision must be respected.

Most importantly, we now have a one-man Commission of Enquiry established with the eminent UK jurist, Sir John Colman QC sworn in.  That Commission is to examine the causes of the CL Financial and Hindu Credit Union collapses.  The Colman Commission is expected to start sittings in January 2011 and the Attorney General has directed that its report be delivered in 6 months’ time.

The Manning Factor

Patrick Manning
Patrick Manning

The most comical event of the year is the bold-faced attempt by the former Prime Minister, Patrick Manning, to shift attention away from the PP’s revelations as to the illegal spying activities of various State agencies.  Manning, the original PM, attempted to show-up the Prime Minister, Kamla Persad-Bissessar, with a series of allegations on the status of a house being built with private funds on private lands for a private purpose.  The Prime Minister effectively dismissed Manning’s concocted concerns with the telling observation that all the refutations she quoted were available from the public record, if the accuser had ever been interested in examining that open source.

Having stirred to life and found his voice, it is important to note the several matters on which Manning maintains a stony silence –

  • Calder Hart – Where is Calder Hart?  The nation was told solemnly by Manning that he knewCalder Hart’s whereabouts and further, that Hart was not a fugitive.  We are now told that Calder Hart cannot be located and Manning needs to speak on this.  Is it true that Hart gave Manning his location?  Has Hart changed locations?  Or is it that Manning has not shared that information with the correct authorities?
  • Election rationale – What, if any, was his rationale for calling the general election at mid-term?  I am not sure that anyone knows the answer to this one, but it is surely of continuing interest.
  • Guanapo Church – What is the truth behind the ill-fated Guanapo Church?  It is not my habit to wax scriptural, but that was a ‘house built on sand’ if ever we saw one. The reason for the State Grant of this land and the rapid grant of full planning permission – a record of only one month between the date of application and the grant – remains unexplained.  As for the architect’s plans for this huge church in the grounds of the PM’s residence, the mind boggles.  Where is Pastor Pena? We need to insist that Manning tells us more about this miraculous church.
  • Cleaver Heights – Another area is the wild allegation Manning made, at the close of the 2008 budget debate, as to a ‘missing’ $10M at an HDC project at Cleaver Heights in Arima.  Or was it $20M?  After inserting that case into the ongoing Uff Commission and having the embarrassment of having the allegation evaporate under cross-examination, Manning needs to tell us just how he came to learn of this allegedly missing money.
  • CL Financial bailout – Manning’s conduct in this matter has been the crowning-point of his administration, in my view.  The then Minister of Finance, Karen Nunez-Teshiera, was accused of using ‘inside information’ to make early withdrawals of her own funds from the CL Financial Group and to compound the mischief, being a shareholder of the CL Financial group in the sum of over $10M.  Manning’s steadfast defense of his beleaguered Minister of Finance was a display of loyalty which is seldom seen in higher political circles.  We need to know if the Minister told her colleagues that she was indeed a shareholder of the troubled group.  Did she or did she not recuse herself from the Cabinet’s deliberations?  My reading of the events, as told by the very Minister, is that she did not.

For Manning to fail to come clean on these questions, he would run the risk of damaging his hard-won reputation for upstanding values and leadership.

White Collar Crime
white-collar-cartoonThe obvious connection between these various events is the fact that White Collar Crime – which is sometimes, mistakenly, called victim-less crime – is  afflicting our country in a big way.

The year ahead holds significant challenges as we try to go forward in this morass, to escape the conspiracy which I have titled The Code of Silence.

The only way political rulers can carry on as they do, wasting the country’s money for the benefit of their friends and family, is because they are sure of each other’s silence.  The people in the private sector who were responsible for the financial collapse are no different.  The financial collapse is not, as some have falsely claimed, in any way connected with the Wall Street crisis.  That is only a handy coincidence.  If our regulators and politicians were doing their jobs we would not be in this position.

Please remember that the alarm bells on CL Financial were sounded by Trevor Sudama, since the 1999 budget debate.  More to the point, many of the people who still inhabit the Parliament were there at the time.  Again, I give this administration credit for appointing a Commission of Enquiry into this sordid affair.

Also, please remember that both UDeCOTT and the HDC failed to file accounts for years, in breach of the law and State guidelines.  That failure was not remarked upon by members of the then Opposition.  More to the point, we have now had a change in administration, with no word on the UDeCOTT accounts.  I do acknowledge that certain HDC accounts have now been published and that is to be the subject of upcoming commentary.

The Code of Silence must be broken if we are to progress.

VIDEO: Morning Edition Interviews

VIDEO: Morning Edition Interviews – March 2010

AfraRaymond.com, at this time chooses to re-issues these interviews on Morning edition on TV6 CCN, Trinidad and Tobago, to keep readers up-to-date on issues surrounding Uff Report and UDeCOTT Affair respectively.

  1. Afra Raymond sits with senior journalist Andy Johnson to discuss the “UDeCOTT/Calder Hart Affair” on Morning Edition television show on TV6.
    • Programme Date: 10 March 2010
    • Programme Length: 0:28:16

  2. Afra Raymond sits with guest host, William Lucie-Smith on the Morning Edition television show as part of a panel with senior counsel Israel Khan, to discuss the leaked Uff Report.
    • Programme Date: 31 March 2010
    • Programme Length: 0:26:52

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

Seeing the Big Picture – Learning the Lessons of the SPE fiasco: Part 5

I have set out the key findings of the Uff Report, insofar as the elements of governance go.  Those were combined with recently published news to offer a picture of the manner in which our leading Special Purpose Entities (SPEs) are being governed.

The picture is an unflattering one, which few could seriously seek to emulate. It brings to mind the question raised here some time ago – ‘What was it really all for?‘  I continue to believe that the State must behave in an exemplary fashion, but that is not all.

The concerns over governance being raised in this series ‘Learning the Lessons’ are part of an attempt to query the true purpose and effect of the SPEs.  The point I am making in this final installment is that there are pre-conditions which ought to eclipse even important points like missing years of audited accounts, unsigned contracts, ‘back-fitted’ financial documents, publication of massively-inflated achievements, bogus feasibility studies and the like.  Just listing the important principles which have been violated, the whole situation seems incredible.

Important as it is to eradicate those unprofessional and dishonest practices, there has to be more to the development process.  Yes, even if the main ingredients of good corporate governance were practiced at our SPEs, it would all be for naught, unless those companies are operating in accordance with a sound strategy for national development.  Good corporate governance is necessary, but not sufficient, if we are to achieve the sound development which every right-minded citizen would desire.

nidcoTo illustrate this point as to the importance attached to strategy, I am going to shift focus from UDeCOTT and the HDC.  I am going to consider the operations of NIDCO in terms of examining this issue.

In her maiden budget speech on 22nd September 2008, the Minister of Finance set out the main elements of this government’s ambitious transportation plans.  These were in four parts – the rapid rail project, the coastal water taxi, the building of more highways and a significant expansion of PTSC’s fleet.  The Rapid Rail, Coastal Water Taxi and Highway building program are all being handled by NIDCO.

“…another slew of ambitious, extremely expensive and long-range plans being carried out supposedly for our benefit, but once again, we are witness to fundamental dishonesty on a huge scale.”

 

In ‘P3 and the Proposals’- published in this space on 23rd October 2008, see http://www.raymondandpierre.com/articles/article58.htm – I wrote –

“The National Infrastructure Development Company’s (Nidco’s) high-profile advertisements for rapid rail are now giving one pause. Hear this: “As part of a holistic plan to ease traffic congestion and create a more modern, efficient, transportation network, the Ministry of Works & Transport…signed a design-build-operate-maintain contract on April 11, 2008, for the implementation of the Trinidad Rapid Rail Transit System.

Where is this holistic plan?

Were public comments ever invited on that plan?

Where can the public see that plan?”

It was plainly the intention of NIDCO, in this series of advertisements, to promote the belief that these four huge, expensive initiatives are all part of a comprehensive strategy.

I was very sceptical and continued to call for the ‘Holistic Plan’ to be published.  All to no avail.

On 27th November 2008, I submitted my application, under the provisions of the Freedom of Information Act (FoIA), for a copy of the said ‘Holistic Plan’.  My application was sent to both the Ministry of Works and Transport (MoWT) and NIDCO, its implementing agency.

That FoIA application and NIDCO’s reply also dealt with the Rapid Rail contract, but that is for another time.

On 2nd January 2009, I was ‘phoned by a civil servant from MoWT, who advised that they were ‘working on my application’; she confirmed by email later that day that “…we are still gathering the information and working on your request…”.

Just imagine that.  9 months after signing a major contract, reportedly ‘…as part of a holistic plan…’ and three months after publishing advertisements to that effect, I get an email from MoWT to say they are putting the plan together.

On March 6th 2009, the Permanent Secretary of MoWT wrote me to apologise for the delay (these FoIA applications are supposed to be dealt with in a month) and direct me to pursue NIDCO for a reply.

On 4th August 2009, NIDCO’s Vice-President Legal, Nirad Samnadda-Ramrekersingh, wrote in reply to my application for the ‘holistic plan’ –

“…please note that same does not exist either as a formal document or series of documents and that the term as used in the newspaper advertisement to which you have referred is simply a descriptive reference to the Rapid Rail Transit System, the Water Taxi Service, the Interchange Project and the existing PTSC and Maxi Taxi networks also described in the said advertisement.  We are satisfied that this is the case…”

“…simply a descriptive reference…”  Take that.

So there we have it, another slew of ambitious, extremely expensive and long-range plans being carried out supposedly for our benefit, but once again, we are witness to fundamental dishonesty on a huge scale.  Just like UDeCOTT, with its bogus feasibility studies, we can see that NIDCO’s claims are also highly questionable.  In the absence of real development strategy, we can only hope for a lucky accident.  That is no proper road to national development.  Particularly in the arena of physical development, where decisions have long-term physical, environmental and financial consequences.

As our servant with special responsibilities, the State is responsible for carrying out those developments in accordance with some sound strategy.  We must raise questions which are fundamental if we are to do better.  If we are to do better, we have to think and act differently.  Big changes are essential if the State is to deliver the future we need.

SIDEBAR: National Infrastructure Development Company (NIDCO)

NIDCO is a State-owned company, established in 2005 and under the control of the Ministry of Works and Transport.

According to its website – www.nidco.co.tt – its vision is –

Vision
To be a key enabling vehicle for the development of infrastructure that enhances and sustains Trinidad and Tobago’s economic development and quality of life.

Its core values are –

  • Transparency.
  • Professionalism & Quality.
  • Integrity, Trust, & Honesty.
  • Meritocracy.
  • Teamwork.
  • Commitment.
  • Communication & Participation.

No reasonable person could object to those principles.

The Chairman of NIDCO is Professor Chandrabhan Sharma, of UWI’s Engineering Department; Professor Sharma is also a Director of Republic Bank Limited, TTEC and several other companies.

NIDCO’s President is Kaisha Ince, Attorney-at-Law.

Learning the Lessons: Part 4

Last week I promised readers some details of the scale of the failure at the HDC and UDeCOTT.

The failure is systemic and exists at every level.

“That is nothing less than scandalous and deceptive behavior from those we trusted with our national wealth. It is like doing a business plan to open a ‘Chicken and Chips’ outlet and leaving-out the cost of the chicken. Bogus.”

The Special Purpose Entities (SPEs) were established to achieve a more rapid rate of national development.  The idea was that we, the public, would benefit from the ‘best of both worlds’, so to speak, in that the ‘best practice’ of the private sector would be used in the SPEs to satisfy the requirements of the public for better roads, housing or other goods or services.

Starting at the level of underlying purpose of these SPEs –

  1. HDC was established in 2005 as the successor agency to the NHA.  The target set in the 2002 National Housing Policy is for 100,000 new homes to be built in a decade, but that annual target was reduced in the first year to 8,000.housinginside

    In the seven years between 2003 and 2009, there should have been an output of 56,000 new homes, but the total output claimed was repeatedly given by the PM and the Minister of Planning, Housing and the Environment as being about 26,000.  In March, I publicly challenged the accuracy of those claims and the new MD of the HDC, Jearlean John, released revised figures – see http://guardian.co.tt/news/politics/2010/03/28/unc-claims-hdc-voter-padding-opposition-strongholds-marginals – which showed a total of 15,394 new homes built in the period.  An annual average of about 2,200 new homes, about a quarter of the reduced target.

    That is at least 10,000 less new homes than the HDC’s chiefs had been claiming.  What trouble is this?!  Now, at the same time as we thanked Ms. John for setting the record straight, just try to imagine the record-keeping and integrity of an organization which could repeatedly overstate its achievements in this fashion.

    That is the scale of the problem.

  2. UDeCOTT’s mission is to develop the structures that form part of Vision 2020 and which “…will be achieved in accordance with…commercially viable principles…” – see http://www.udecott.com/index.php/cc/cc_sub_level/C6.  Those claims are equally baseless, since Calder Hart admitted under my cross-examination that only one of UDeCOTT’s many projects had been the subject of a feasibility test.  Only one.  That was the International Waterfront Complex and my further questioning revealed that the value of the land had been omitted from the equation.  That is nothing less than scandalous and deceptive behavior from those we trusted with our national wealth.  It is like doing a business plan to open a ‘Chicken and Chips’ outlet and leaving-out the cost of the chicken.  Bogus.  Our PM went to great lengths when he addressed the Senate on 13th May 2008 to point out that UDeCOTT’s projects were all approved by Cabinet, after a thorough review process – see http://www.ttembassy.org/051308.htm.  Additional claims were also made as to the ways in which Cabinet monitored UDeCOTT’s operations.  As I wrote in this column, early in my critique of UDeCOTT – There is either a sobering naivete or a lack of rectitude in the highest chambers in our Republic.

    That is the scale of the problem.

In both cases, we are witness to fundamental dishonesty on a huge scale.

Moving on to the findings of the Uff Report –

Looking at the controversial Cleaver Heights project, at para 25.30, the Report states

“…The absence of a written contract was put in context in the cross-examination of Minister Dick-Forde when she confirmed advice from HDC to the effect that none of their large projects and none of the small projects either had a signed contract .   It was subsequently confirmed that as at January 2009 HDC had 64 large projects ongoing and 591 small projects, none of which had a signed contract. Large projects were those over $50m in value. Thus, while there appeared to be no good reason why a formal contract was not signed between NHA and NHIC, it seems clear that to have done so would have been a highly unusual step and one which was presumably regarded, both by NHA and HDC, as unnecessary.…”

Not one HDC contract has been formally drawn up or executed.    Not one.

My colleague, Ken Ali, put out a hard-hitting exclusive on the ‘HDC’s Silent Projects’, published in last Monday’s Guardian at http://guardian.co.tt/news/general/2010/04/26/capacity-firms-weak-non-existent.

UDeCOTT was also involved in its own widespread and unconventional practices, namely ‘back-fitting’ of data, as described in the sidebar.

On the blighted Brian Lara Cricket Academy (BLCA), being built by Hafeez Karamath Ltd. (HKL), we are told –

  • Para 16.16 – referring to advance payments to the contractor –

    “…As a result money was advanced in circumstances which do not appear to have been governed by any ascertainable rules and amounted effectively to very substantial loans to HKL. Such a procedure is quite unique in the experience of the Commissioners. It calls for explanation but none has been offered…”

  • Para 16.17 – referring to UDeCOTT’s accounting system –

    “…UDeCOTT’s administration and recording of the payment process was “appalling” and required a great deal of detective work to get to the bottom…”

  • Para 16.21 – referring to UDeCOTT’s attempts to explain its management of the BLCA –

    “…does not by any means explain why UDeCOTT staff had gone to such extraordinary lengths to ensure that HKL was paid as soon as the money became available; why UDeCOTT was seemingly so anxious to make payments substantially beyond the value of work carried out (and in circumstances where the contractor was already in default such that TAL had long since recommended termination); and why UDeCOTT chose to disregard the opinions of the appointed engineer (TAL)…”

  • Para 12.45, citing the work of MacCaffrey –
    1. Of 79 Certificates issued for advance payments, 39 were wrong in relation to the sum for payment of advance payment, 60 were wrong in relation to the amount of advance payment made to date and only 4 out of 79 correctly recorded the advance payment and the amount of repayment.
    2. UDeCOTT’s contemporaneous reporting of advance payment is materially wrong (i.e. under-reported) by tens of millions of TT$ for the vast majority of the duration of the project.
    3. UDeCOTT decided to back-fit Payment Certificates in February 2008. Those back-fitted Certificates also materially under-reported the amount of advance payments made. All the back-fitted Certificates have been endorsed by at least two signatories and in some cases three.

Little wonder that UDeCOTT’s audited accounts have not been published since the end of 2006.

The Cancerous Cozy Consensus

Given the scale of the bobol revealed in this single Enquiry, one can only wonder what else is taking place at other SPEs.  The relationships are so cozy that one seldom, if ever, hears of anyone being made to repay the monies stolen or even face the Courts.  I am repeating my call that it is time for us to review the performance and proper role of the SPEs.

It might also be useful at this stage, for those of us who exist in the ‘comfort zone’ of private sector superiority to reflect on how seldom, if ever, we act against ‘White-collar’ crime.

SIDEBAR: ‘Back-Fitting’ of Financial Documents

One of the hidden practices of UDeCOTT which was revealed in the Uff Report was that of ‘back-fitting’ of payment certificates so that various erratic and unsupported payments could continue, all under the veil of accountability.  For readers who are unfamiliar with this sort of practice or surprised that such could be the practice at the ‘best-performing SPE’, they might find it easier to understand if the colloquial phrase is used…Yes, ‘Ratchefee”…

Learning the Lessons of the UDeCOTT fiasco: Part 3

The reflections continue this week, by drawing heavily on the text of the Uff Report and the transcripts of the Uff Commission, to set some of the scandalous facts into context.  This is for those who are still wondering ‘What was it all really for?’

Last week I wrote that the State must behave in an exemplary fashion.  It is also important to know that the State has a responsibility beyond the moral plane.  On an entirely practical level, it is clear that the State controls the majority of economic activity in our nation. As such, it is responsible for the majority of construction projects in the country.  If we exclude the exceptional projects built for the energy sector, over 75% of the construction in the country is carried out by the State.

Apart from statutory undertakers – like TTEC, WASA, TSTT etc. – the State carries out most of its capital investment via various SPEs.  Those would include:
SPE logos

  • National Infrastructure Development Co. (NIDCO)
  • Housing Development Corporation (HDC)
  • Urban Development Corporation of T & T (UDeCOTT)
  • University of Trinidad & Tobago (UTT)
  • Evolving TecKnologies and Enterprise Development Company Limited (e TecK)
  • Education Facilities Co. Ltd (EFCL)

The conduct of the State is therefore fundamental to the conduct of a huge slice of the business activity in our country.  If the behaviour in the majority of our commercial relationships is improper, that is good reason for the cynical attitudes and poor standards which flourish.

Yes, there is considerable ambiguity in the term ‘improper’ and I am therefore going to illustrate.

  • The role of Boards of SPEs – As I said when warning against the appointment of Michael Annisette as an Independent Senator – see https://afraraymond.wordpress.com/2010/04/22/2008/01/12/an-unhealthy-choice/ – speaking of “…Directorships in significant State-owned enterprises…it is a widely-held view that such appointments, especially to those who are not experts in the relevant fields, are only offered to those in political favour.  To put it plainly, one would hardly expect to see UNC or COP members, however expert, on State Boards under a PNM administration…”  Despite the fact that there are many excellent and hardworking Directors of SPEs, that is the background to those appointments.  Just to make sure, given the ‘silly season’ we have entered, I am equally convinced that when UNC was last in power they also allocated those SPE Directorships in a similar fashion.
  • The role of the Executive Management – Suffice to say that there is little difference in the considerations when making those appointments.
  • The role of consultants and contractors – It is impossible to say who these stakeholders support, apart from themselves.

One of the perennial questions is ‘How come State projects are almost always overbudget and late?’   That is a truly universal question and the problem, if only the main element is isolated for discussion, is that the parties are too close.

The typical contractual and managerial controls of budgets, accounting systems, independent professional advice and penalty clauses were all violated wantonly.  Our Treasury has been plundered.  See the sidebar for an extract from the Uff Report.

UDeCOTT and the HDC are the State’s two main agencies in the move to physical development, they are both under the Ministry of Planning, Housing and the Environment.

We are now clear that both have been failures when measured against the goals set for them.  The sheer scale of the failure will be set out next week in this space, again with extracts from the published record.

We need to ask what has to happen differently?  Can we make the change?

SIDEBAR: What is ‘Good Governance?’

Governance is one of the vexed aspects of this discussion on the purpose and performance of Special Purpose Entities (SPEs).  Whether we are looking at the HDC or UDeCOTT, the concerns are similar.

At the national level, we can have a broad description of good governance which includes elements such as – equity, participation, accountability, transparency and conforming to the rule of law.  Of course, when we focus on the SPEs, there is a narrower definition of good corporate governance being the rules which are followed by a Board of Directors to achieve fairness, accountability and transparency in the relations with the company’s stakeholders.

When one considers that the SPEs were introduced to overcome the delays of the old civil service rules, their corporate governance rules are key in achieving those elusive levels of performance.

  • Extract from the Uff Report – Paras 62 and 63 at pages 33/34.

    “Holding to account

    62. We have observed, in the context of contractual issues as well as regulatory matters that there exists a culture of non-enforcement which appears to operate on a mutual basis. Contractors seem reluctant to issue proceedings for payments overdue or to enforce claims and employers in turn refrain from enforcing time obligations which are routinely not complied with.  In regard to delay issues, the point was demonstrated by the fact that no witness or representative appearing at the enquiry was able to quote any case in which a contractor had actually been required to pay or had been debited with liquidated damages. In the wider field there was a tacit acceptance that regulatory approvals, particularly as to planning, were rarely given in a final form before the work was performed, this coupled with an expectation that such approval would be forthcoming retrospectively.

    63. At the same time we had the impression that one contractor who made a habit of enforcing contractual rights, if necessary by formal proceedings, was regarded as being “confrontational”.  Such an attitude does not sit well with the careful drawing up of commercial agreements; nor with competitive tending, which is carried out on the basis that contracts will be enforced.  It is also inconsistent with the clear duty of directors of companies and public bodies to enforce the contracts they negotiate and enter into.  If there is a desire to promote the timely and proper performance of public sector contracts, this will only be achieved by holding parties to account for any breaches of contracts freely entered into; as well as enforcement of legal duties in regard to regulatory matters. Enforcement must also be assured through efficient and timely processes of courts and other tribunals.”

The emphases are mine.

Learning the Lessons of the UdeCOTT fiasco

Former UDeCOTT Board
Former UDeCOTT Board, (l-r) Dr. Krishna Bahadoorsingh, Sen. Michael Annisette, Mr. Anthony Cherrie, Mr. Wendell Dottin

The leaking of the Uff Report, the delayed dismissal of the remaining, ‘squeaky-clean’ UdeCOTT Board members and the dissolution of Parliament are all part of a major distraction operation. The fallout from suppressing the Uff Report would have been huge and unpredictable, so the name of the game was spin. That spin is what we have been getting from government ever since we entered the end-game. The ultimate attempt to distract us was of course the dissolution of the Parliament by FAX on Thursday 8th April.

The strategy seems to be an attempt to provide the media and the population with even more interesting talking points, so that the Uff Report slips into obscurity. I expect that if the incumbent party is returned to office, there will be attempts to claim that the ‘mandate’ granted by that vote is a justification for the matters revealed in the Uff Report. Already a large slice of attention has been shifted to the impending elections, as expected.

I have no intention of allowing those distractions to take hold. I will continue to write on the lessons of the UdeCOTT fiasco.

This entire series of revelations is historic in that finally we have a Report by a Commission of Enquiry published. The second note for us is that it raises once again sobering governance issues, including matters of professional integrity and Directors’ responsibility. Those are aspects into which Property Matters will delve in the coming series.

Some main points for us to consider –

  • Cleaver Heights – The Uff Report makes it clear that there is no missing money. None. There are other serious concerns addressed in the Report as to the change in the form of contract and the fact that some $140M was paid to the contractor without title having passed to the State. I do agree that those are matters worthy of further investigation. To be clear, the questions would have to be whether any undue benefit was enjoyed by the contractor and, if so, how did the HDC’s checks and balances fail to detect and arrest this? Please note that the entire contract sum was never estimated to exceed $150M for this project. That said, we still have two mysterious parts of the puzzle to figure out – firstly, now that, under cross-examination, everyone has denied doing so, ‘Who told the Prime Minister that blatant untruth about ‘missing money’? Secondly, the renowned Forensic Accountant, Bob Lindquist, has been investigating the Cleaver Heights project for some considerable time now, so what are his findings? Note well that I am not asking for his report, since some ‘bright’ person would be quick to say that he never submitted his report or that it is incomplete. I am asking for his findings, even the interim ones, before we spend more money on more investigations.
  • The non-gazetting of the Uff Commission – We were all shocked to learn, at the end of August 2009, that the Enquiry had not been properly set-up, due the failure to ‘Gazette’. A special, one-man Enquiry into that episode was launched by the AG, with a final report handed into the AG on 9th December 2009 by retired Judge, Anthony Lucky – see http://guardian.co.tt/news/politics/2009/12/10/lucky-report-goes-cabinet-today-lead-pg3. What are the findings of the Lucky Report, Mr. AG? I think that we need to know and now, please.
  • Was there any evidence of criminal wrongdoing by UdeCOTT? – According to Para 14.41 of the Uff Report – “…there should be an investigation by an appropriate criminal law Authority into the award of the MLA contract to CH Development to include the role of Mr. Calder Hart and the conduct of the Board in not ensuring that an enforceable guarantee was given by the parent company of CH Development….”
  • Calder Hart – Was Calder Hart a good executive manager, who may have just ‘over-reached’ his authority in an effort to meet his demanding targets? According to Para 12.55 of the Uff Report – “…We have noted the apparent absence of any note of criticism or dissent within the UdeCOTT staff and the dominant influence of the Executive Chairman, Mr. Calder Hart. To the extent the failure of senior staff and directors to raise any voice in opposition to the level of financial irregularity found on the Brian Lara Project amounts to loyalty, such loyalty is clearly misplaced…”
  • That UdeCOTT Board – It was a relief to see the dismissal of these Directors. In fact, the more one considers their bizarre and reckless statements, the more obvious it was that this was indeed a large corporation in crisis. Problem was, that it was our money they were wasting and worse yet, failing to publish audited account for three years. A sad example of wrong and strong. The AG said, on 1st April as he announced that the Uff Report would be published in full, that Calder Hart was just ‘an ordinary citizen’. It seems to me that Calder Hart enjoyed benefits far beyond those extended to the ‘ordinary citizen’. I have never heard of the PM tipping off anyone else under serious investigation. The other UdeCOTT Board members were not given the ‘tip’ to resign and have had to be fired. There must be a lesson in there, somewhere.
  • The Model – This colossal failure is such as to prompt a serious re-examination of the idea that the Special Purpose Entity (SPE)is the preferred vehicle for our national development. The continued down-sizing and sidelining of Ministries and the promotion of SPEs have continued apace, most recently in the TTRA proposals. I am saying that it is time to soberly re-examine these ideas against the actual results, so that we can chart a better way forward.

Next, I will be examining the implications of the SPE model and its effects on the nation.

An overview of the Uff Report

Professor John Uff. Photo courtesy Trinidad Guardian
Professor John Uff

The Attorney General announced at the Post Cabinet press briefing on Thursday 1st April that the full Uff Commission Report will be laid in the Senate on Tuesday 6th April – see http://guardian.co.tt/news/politics/2010/04/02/uff-report-senate-tuesday.  I was pleased to hear that, but there remained a widespread attitude of skepticism as to the outcome of the AG’s promise.  One can hardly blame people for having those feelings since, as TTTI’s President, Victor Hart, has recently reminded us, PM Manning broke his promise to publish the report of the Bernard Commission into the Piarco Airport project.  That was over 6 years ago and still no Bernard Report yet.

I received a copy of the Uff Report in my email on Saturday and several other concerned citizens as well, so it seems that some publicly-minded person wanted to ensure that it was not either suppressed or edited.  Thank you, whoever you are.

The Uff Report is 512 pages long and contains 91 recommendations, so its sheer volume and the limited time available mean that I am unable to give a detailed review.  This week’s column will therefore comprise an overview of the main concerns raised in the Enquiry and the way in which the Report has handled those.

CORRUPTION

Q – Does corruption exist in the manner alleged by the government’s critics?

A – At para 59. the Uff Report states that “…It is accepted that corruption is a problem of serious proportions in Trinidad & Tobago…to which the construction industry is particularly prone…”

Was there actually something corrupt or wrong at UDeCOTT?
Q – Is there good reason for concern at UDeCOTT’s operations, or is it a case of politically-motivated attacks?

A – Para 14.36, from the Commission’s discussion of the Ministry of Legal Affairs Tower/CH contract, is a classic of understatement – “…UDeCOTT’s application of its own rules discloses a worrying lack of transparency as well as inconsistency…”

Para 14.37 states – “…the appearance of Mr. Calder Hart’s fax number on the notepaper, which was no doubt hurriedly printed by CH Development, remains unexplained…”

Para 14.41 –“…there should be an investigation by an appropriate criminal Law Authority into the award of the MLA contract to CH Development, to include the role of Mr. Calder Hart and the conduct of the Board in not ensuring that an enforceable guarantee was given by the parent company of CH Development…”

LOCAL VS FOREIGN

Q – Are local contractors being unfairly replaced by foreign contractors or do the foreigners really deliver better performance?

A – Para 6.18 states that – “…no convincing comparison has yet been presented from which reliable conclusions can be drawn as to the relative performance of local and foreign contractors or consultants…”

PROCUREMENT

Q – Is it better for the government to try using Design and Build or should they stick with the traditional Design and Tender method of procurement?

A – Para 7.20 states that – “…there is no single system of procurement which should be preferred in all circumstances…”

The Hart legacy –
According to Para 12.55 – “…We have noted the apparent absence of any note of criticism or dissent within the UdeCOTT staff and the dominant influence of the Executive Chairman, Mr. Calder Hart.  To the extent the failure of senior staff and directors to raise any voice in opposition to the level of financial irregularity found on the Brian Lara Project amounts to loyalty, such loyalty is clearly misplaced…”

The Property Matters critique of UDeCOTT started in 2008 on the theme ‘A considerable concentration of power’, which attempted to draw lessons from the Cadbury Commission as to the perils of the Executive Chairman.

The role of UDeCOTT’s Board and its Executive Chairman came in for heavy criticism, with the Report calling for full investigations into the Ministry of Legal Affairs Tower and the Brian Lara Cricket Academy.  Furthermore, there is a recommendation that the roles of Chairman and CEO should be separated.

The Rowley saga –

Q – Was there really any money missing at Cleaver Heights?

A – Para 27.11 – “…the entirely erroneous addition of $10,000,000…”

SIDEBAR: Notes to Jearlean John

Jearlean John. Photo courtesy Trinidad Guardian
Jearlean John, Chairman UDeCOTT

On Tuesday 16th March, I spoke at a JCC press conference and took the opportunity to issue two calls to Ms. Jearlean John – the MD of the Housing Development Corporation and newly-appointed Chairwoman of UDeCOTT.  See http://www.caribdaily.com/article/267861/publish-udecott-accounts/.

On the question of the HDC’s fundamental role and its performance, I again raised the issue of their output.  In the course of the Enquiry and in this column, I have pointed out the serious output shortfall of the HDC, the primary function of which is contained in its name.  Housing Development.  At the press conference I was openly skeptical about the often-repeated figure of 26,000 new homes built by the HDC in the execution of the present national housing policy (implemented in 2003) which set a target of 100,000 new homes in a decade.  I doubted that even half that amount had actually been built and requested that Ms. John should publish a list of where and how many new homes were completed.  On Sunday 28th March, this newspaper carried a two-page ‘Special Report’ on UNC claims of voter-padding and that included the requested information.  The article was probing another aspect of the housing riddle, but the two figures which struck me were ‘15,394 housing units constructed by the government in 2003-2009’ and the table detailing the locations and unit numbers with a closing total of 13,677 units.  Either way, the total is far less than that claimed thus far and using the upper figure equates to an average of just about 2,200 new homes per year.  That is a far cry from the original annual target of 10,000 new homes and even the revised target of 8,000.  One can only wonder where the wrong, inflated figure came from and, those having been fed into the budget process, how accurate is our planning?  It is all reminiscent of the outstanding query from the Uff Commission as to the Cleaver Heights housing project and the false claims as to missing money – Who told the PM that false information for him to have made those baseless and misleading statements to the Parliament?  No one ever admitted to that in the course of the Uff Commission.

Thank you for releasing that info, Ms. John, even if it was in response to another call.  Given our persistent culture of secrecy, especially in public matters, it is a welcome change.

My second call to Ms. John at that press conference was to publish the UDeCOTT accounts without further delay.  As I put it – ‘Ms. John, if you want to be noted for integrity and transparency, you must publish the UDeCOTT accounts without delay.  UDeCOTT has published no audited accounts since the end of 2006 and I was pleased to see the Ms. John’s positive response to those calls.  See – http://www.caribdaily.com/article/268401/john-udecott-will-publish-accounts/.

Ms. John was reported to have been appointed and met with UDeCOTT’s Board on 25th March – See http://guardian.co.tt/news/general/2010/03/26/udecott-pushes-complete-priority-jobs.  That report in this newspaper concluded with a telling quote from the Deputy Chairman – “Bahadoorsingh said John was an excellent chairman, “Highly competent, very knowledgeable, no nonsense and to the point and very friendly, a pleasure to work with. “It’s a new era with this new chairman. I’m very impressed,”

We are waiting for either the prompt publication of UDeCOTT’s Annual Report, accompanied by audited accounts, or some cogent public explanation for the unacceptable delay in so doing.  For all this time to pass, with neither of those events to taking place, can only deepen the atmosphere of distrust.  We, the taxpaying public, expect better from you, Ms. John.