Afra Raymond

focus on facts:

Afra Raymond

So, the campaign to save the Public Procurement and Disposal of Public Property Act (the Act) failed. The Government achieved its objective of greatly reducing the oversight of the Office of Procurement Regulation (OPR). This is the final article in this series, so I pose two important questions arising from that failed campaign.

Firstly, why did all this happen now? Secondly, what is the likely outcome from these fundamental reductions in the OPR’s scope?

The first question really intrigued me. After all, if the current situation is one in which public procurement is loosely controlled, why would any government risk serious criticism by amending a law which has been delayed for so long?

Think back to the large-scale contract between the Housing Development Corporation (HDC) and China Gezhouba Group Company (CGGC) for 439 new homes, which was heavily criticised for its sheer generosity and was abruptly cancelled on September 5, 2019. That was a US$71.7M (TT$486M) contract on the Public Private Partnership (PPP) model, with the contractor to be paid via sales of the completed new homes. That contract provided exemptions from both VAT and Corporation Tax; up to 600 work permits to be facilitated; land for housing workers; police permanently stationed on-site and, most strikingly, guaranteed payment to CGGC if there were any shortfall in the expected sales of those new homes.

One could scarcely imagine even the most favoured local contractors achieving such lucrative terms. To my mind, that contract always resembled a government-to-government agreement (G2G). The contract signing was attended by a cross-section of high-ranking officials, apart from the HDC officials, Housing Minister and CGGC officials—the Ministers of Foreign Affairs, Trade and Industry and the Ambassador of China.

Just think about it: how could a statutory body contract for those benefits without broader collaboration from other State agencies? That kind of collaboration defies the usual official silos which can so often intrude on plans for progress.

Here is acting PM and Minister of Finance (Colm Imbert) answering a question on the consequences of that cancellation: “...Thank you, Mr Deputy Speaker. I am advised that the HDC and the China Gezhouba Group International Engineering Company are currently in discussions in an effort to arrive at a mutually satisfactory resolution to the contract. As a result, there are no penalties accruing at this time...” (Hansard, September 13, 2019; Page 9.)

During the recent debate on the amendments to the Act, Finance Minister Imbert was emphatic that the CGGC contract was not a G2G, which made me smile.

The comparison of the CGGC contract does not end at the possibility that it might indeed have been a G2G, since it contains unmistakable elements of such arrangements. The comparison has to go further to ask:

How can a party to a $486M contract cancel after execution without facing large and incontestable claims for loss of profit?

No commercial firm would accept such a cancellation without finding some way of satisfying those claims, so what is the CGGC settlement? Of course, we may never know the full story, given the official addiction to secrecy, but to my mind it is no coincidence that G2G and PPP agreements have now been placed beyond independent oversight.

Sadly, the second question as to the likely consequences of these amendments, is a far simpler one to answer since we have our own history as a guide.

In 2005, then PM Patrick Manning had a Cabinet-approved White Paper on Public Procurement and Disposal of Public Property in hand, with the next step being the drafting of the required law to run the new system. PM Manning, together with his Cabinet, decided to pause that significant and long-overdue move towards greater transparency, accountability and good governance. The preference was for a rapid series of large-scale developments, funded by our strong energy sector earnings and significantly facilitated via G2G arrangements.

What happened next is nothing less than an object lesson in the damage such large-scale developments can inflict on the very issues of morality in public affairs and good governance which were once held as strong values. Huge projects, many unneeded buildings and massive cost over-runs became a signal feature of that Manning regime. Dr Keith Rowley gained prominence as one of the strongest critics of those lapses, and that led to his removal from the Cabinet in April 2008.

The Manning government was forced to appoint the Uff Commission of Enquiry to investigate its own projects. It is virtually unprecedented to have a government investigating its own projects, so that gives some idea of the sheer pressure being exerted by those of us protesting the excesses. The Uff Report was published in April 2010, shortly after its completion. That was another virtual first, as most such reports are concealed upon completion, to be released when the shouting dies down. PM Manning called a snap election a month after the release of that report. The Kamla Persad-Bissessar-led People’s Partnership won that readily with 29 seats out of the 41 seats in our Parliament.

In 2020, we attained a higher state of readiness for new and effective control of transactions in Public Money via the Act. However, the current Rowley administration has also rejected the move with familiar protestations that independent oversight would somehow frustrate the development the country needs.

Given the well-established impunity rampant in our country, it is impossible to conceive of a happy ending to this chapter of national affairs. If we continue to enter large-scale contracts without independent and effective oversight, we are doomed to repeat the tragedies of our past. The citizens of this republic will be paying for development without explicit guarantees as to employment and local content. We can also expect rising levels of corruption and income inequality, further abolition of poverty from the public policy discussion and more distraction politics as the heat increases.

As surely as night follows day. That is all.

Finally, the terms of office of seven of the ten members of the OPR board will expire at the end of this month, so we will have to maintain our vigilance as to the replacements for those members, in order to preserve some effectiveness of that agency.

—afraraymond.net

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