Posts Tagged patrick manning
The huge potential supply of State-built, unfinished office buildings in our capital is the ‘Elephant in the Room‘. There are potent elements at play here in terms of the viability of the long-term and large-scale investments which have been made in Port-of-Spain by private and public capital.
At this point, taking account of offices over 25,000 sf in size, there are over 1,500,000 sf of incomplete offices in our capital. This article will examine the likely outcomes for our capital and those investors as the various projects are completed.
The State has 1,329,000 sf of incomplete offices in POS and the private sector has 224,800 sf. The State has virtually seven times more incomplete offices than the private sector and that is the ‘Elephant in the Room’. This chart portrays the reality – the details are set out in the table below.
The legacy of the POS offices built during the previous administration is a matter which deserves serious consideration. The sheer volume of offices built by the State during the previous administration is sobering – 2.3M sf. Given that Nicholas Tower – that elliptical, blue tower on Independence Square – contains 100,000 sf, it means that the State built the equivalent of ‘23 Nicholas Towers‘ in our capital in that period of rapid development.
We also know that there was no attempt at public consultation or feasibility studies by the State or its agent, UDECOTT. At the Uff Enquiry, the Executive Chairman of UDECOTT, Calder Hart, admitted that a feasibility study had been done for only one of those projects. That project is the International Waterfront Centre (IWC), which comprises the two office towers of 890,000 sf, the Hyatt Hotel, New Breakfast Shed and car-parking/outdoor facilities. Hart also admitted, under oath, that the value of the land had been omitted from the viability study for the IWC, so it was a bogus exercise. The break-even rent is the amount which must be earned by a project to repay the cost of land, construction, professional fees and finance. The IWC, repeatedly boasted-of as UDECOTT’s flagship project, is not a viable project, since its break-even rent exceeds the highest rents now earned by A-class offices in POS.
The Parliament has now relocated there during the Red House repairs and renovations. A number of other Ministries and Public Bodies have also started to occupy those offices.
The Office of the Prime Minister is now in the new 75,000 sf building on St. Clair Avenue, opposite to QRC grounds.
The rationale advanced by the Manning administration for that surge in office construction in our capital is that it would free the State from the payment of large monthly rents to private landlords. Although I made several requests, I was never able to get the actual figures for the rents paid by the State in POS. My own familiarity with that market allowed me to estimate the average rent at that time (2007-2009) at about $8-9 per sf. The break-even rents of those new buildings exceeded $25 per sf, so the costs of those office projects would never be recovered. I have read reports that the estimated cost of the Government Campus Plaza, which is the largest element in the POS offices, was recently stated by UDECOTT’s Chairman, Jearlean John, to be of the order of $3.2 Billion.
We can reasonably estimate that the rate of rents paid by the State for office buildings has now increased since 2007, in terms of dollars paid per sf.
The completion of those State-owned office buildings is therefore a matter of the first importance, given the high carrying-costs. There is also the significant issue of the high opportunity cost of the State continuing to occupy rented offices alongside virtually-completed offices.
Against this background, we are now seeing an active policy of decentralisation of POS offices by the present administration, with several Ministries and Public Bodies being relocated to south and central Trinidad. The decentralisation discussion is one which has been going on since the 1970s and it is an important issue to be pursued, in my opinion. That said, one has to wonder how is the decentralisation to be rationalised, given the existence of this over-supply of State-owned offices in our capital. That is a serious question which needs to be discussed if we are to achieve any proper resolution.
The completion of the State-owned offices is under the management of UDECOTT, the original developers, with recent disclosures from the Finance Minister of plans to sell the buildings and lease them back as a means of financing their completion. The terms of any such proposals would have to be carefully considered to avoid the mistakes and fraudulent behaviour of the past.
The completion and occupation of the State-owned office buildings in POS will pose an existential challenge to those private investors who have built offices for rent. The rental levels for offices in POS are likely to decline significantly, which will impact on the revenues of those investors.
Afra Raymond chats on the show ’Forward Thinkers‘ with David Walker on 104.7FM, dealing with the CL Financial bailout and my lawsuit against the Minister of Finance to get at the detailed information as to how the $24B in Public Money was spent. 24 October 2013. Audio courtesy More 104.7 FM
- Programme Date: Thursday 24th October 2013
- Programme Length: 0:45:41
The previous column discussed the Appeal Court judgment in #30 of 2008, in which both TSTT and the Integrity Commission sought to challenge the High Court ruling in #1735 of 2005. That High Court ruling found that the phrase contained at para 9 of the Schedule to the Integrity in Public Life Act (IPLA) was to be taken ‘as read’ to define those people who are subject to its provisions -
- “Members of the Boards of all Statutory Bodies and State Enterprises including those bodies in which the State has a controlling interest.”
The Appeal Court – comprising CJ Archie, together with Mendonca JA and Smith JA – ruled that -
- TSTT is not a State Enterprise. The members of its Board are not subject to the Integrity Provisions.
- It is only the members of the Boards of those Statutory Bodies which exercise public functions that are subject to the jurisdiction of the Commission.“ Read the rest of this entry »
This is the Order by Justice Boodoosingh to grant me the right to have the Judicial Review heard in Court…our first hearing is set for 1 May 2013
The case is a critical challenge to the detrimental notion that $24Bn of Public Money can be spent without Accountability or Transparency. That notion does violence to any healthy conception of the Public Interest, so I expect this contest to be a sharp one.
“Power concedes nothing without a demand…”
Frederick Douglass…Freedom Fighter and esteemed ancestor…
“Sunlight is the best disinfectant!”
Former US Supreme Court Justice Louis Brandeis…
We are entering the endgame of the Colman Commission, so we need to maintain full vigilance. We must bear witness in a sober manner.
The PNM element
Former PNM Ministers Danny Montano, Conrad Enill and Mariano Browne were recently named by Commission Chairman Sir Anthony Colman as having declined to testify.
“It is noticeable that there has been a remarkable lack of cooperation from others, who were responsible for political decision-taking — to mention a few names: Mr. Enill, Mr. Browne and Mr. Montano in particular — have not offered to come and give evidence,” Sir Anthony said at Winsure Building, Richmond Street, Port-of-Spain.
“It is surprising perhaps that those who were the political representatives of the people of Trinidad and Tobago have not been able to provide assistance to the Commission in circumstances where it might have been expected of them,” he added.
“Colman chides 3 ex-ministers.” Trinidad and Tobago Newsday. October 23 2012.
Colman then named three former Cabinet ministers who had been previously named in testimony at the enquiry in relation to the HCU.
“To mention but a few names Mr (Conrad) Enill, Mr (Mariano) Browne and Mr (Danny) Montano in particular have not co-operated to come and give evidence,” Colman said.
“Colman praises Nunez-Tesheira for co-operating.” Trinidad Express Newspapers. October 22, 2012
That refusal to appear before a Commission of Enquiry amounts to a kind of contempt of court, since it is wilful disrespect for a lawful enquiry. These are PNM Seniors, whose testimonies would have been invaluable in unraveling this series of financial collapses.
Here is why those missing testimonies are so important –
- Mariano Browne is a Chartered Accountant who left a successful career as a Banker – including a significant part of that career spent at CLF, Browne was the first head of Clico Investment Bank and CLF’s Barbados Banking arm – to become Minister of Trade and Minister in the Ministry of Finance after the 2007 general elections. In addition, he is PNM Treasurer, so he could have given a rare insight into the linkages between these collapses and the large-scale donations made by both the CL Financial Group and the Hindu Credit Union (HCU).
- Conrad Enill comes from a Credit Union background, was also Minister in the Ministry of Finance up to the 2007 general elections and served as PNM Chairman up to their 2010 election loss. Enill called for an investigation into the finances of HCU as far back as mid-2002, but swiftly withdrew from that course of action after reportedly being pressured by then PM Manning.
- Danny Montano is also a Chartered Accountant, who was Minister of Labour at the time of the HCU collapse (that Ministry has supervisory responsibility for Credit Unions).
“…THE Hindu Credit Union (HCU) financed Karen Nunez-Tesheira’s successful campaign to become the Member of Parliament for D’Abadie/O’Meara in the 2007 general election.
However, Nunez-Tesheira was not the only People’s National Movement (PNM) candidate who secured campaign financing from the HCU during that election.
This was revealed yesterday as the commission of enquiry into the collapse of CL Financial and the HCU resumed at the Winsure Building on Richmond Street in Port of Spain.…”
“Karen: HCU financed my election campaign.” Trinidad Express Newspapers. October 22, 2012
“….THE Hindu Credit Union (HCU) financed the campaigns of the country’s two major political parties—the People’s National Movement (PNM) and the United National Congress (UNC)—in the 2007 general election, former HCU president Harry Harnarine said yesterday….”
“Harnarine: HCU financed UNC and PNM.” Trinidad Express Newspapers. October 23, 2012.
It is clear that the testimony of these three former PNM Cabinet Ministers would have been crucial to the Colman Commission unravelling this financial fiasco. I am convinced that the matter of what Cabinet knew at the time it took the bailout decision is crucial. For one thing, was Cabinet told that the beleaguered CL Financial group had paid a dividend on 16 January 2009, three days after they had written to the Central Bank for the bailout? If the Cabinet knew of the illegal dividend payout, why were no provisions made in the MoU of 30 January 2009 for the recovery of those monies? If the Cabinet were not told, then we are contemplating what might be a prior case of a senior Minister misleading colleagues to get the required result. A kind of pre-S.34 situation.
Both Browne & Montano are Chartered Accountants, so this reported refusal to give evidence seems to be a case of ‘conduct unbecoming a professional’.
The PNM is now making serious efforts to market itself as a party which stands for good values in terms of Accountability, Transparency and Good Governance. Given the PNM’s track record that is a great challenge. These reported refusals are doing great damage to those efforts.
Ironically enough, at this moment Dr. Bhoe Tewarie and Karen Nunez-Teshiera, are both looking better than these three former Ministers, given that they have appeared before the Commission. Just imagine that.
Sir Anthony Colman was reported to have issued subpoenas for certain missing witnesses in the HCU matter and held them in contempt of court when they failed to appear. I am waiting to hear whether the same treatment will apply to these PNM Seniors.
A commission of enquiry has the same status as that of a High Court.
Those deemed to be in contempt of court yesterday by commissioner Sir Anthony Colman are former chief executive officer of HCU Communications, Gawtam Ramnanan, former HCU financial consultant Jameel Ali and Dave Jagpat…“
“Colman to deal with 3 witnesses in contempt.” Trinidad Express Newspapers. June 15, 2012
It seems like this is yet another episode of inconsistent behaviour which serves to reinforce my belief in this potent ‘Code of Silence’. Let me explain with these facts set out above. One group of witnesses have offered weak excuses of the familiar kind – questionable medical certificates and so on – they were served with orders compelling their attendance (those are called subpoenas) and when they failed to respond, Colman made a ruling that they were in contempt of court. That group was HCU witnesses.
Another group of witnesses took a different approach….they actually have decided not to testify and communicated that to the Colman Commission as described above. Why has Colman not issued subpoenas or made any adverse rulings against these reluctant witnesses?
They are former member of the PNM cabinet, so I have to ask myself if there is a tacit agreement as to areas which will not be ventilated in this Enquiry.
Those areas which are seemingly off-limits now seem to include serious questions as to whether the Cabinet was misled. This is a sobering example of the channels of power. We have to bear witness.
The DPP’s role
“…I am particularly concerned that an otherwise credible prosecution might be stopped by the court on the grounds that a defendant’s right to a fair trial had been fatally compromised by the publicity attendant upon your enquiry. As such, I shall be issuing a press release warning the media against the publication of any material which may jeopardise the police investigation and any potential criminal proceedings…“
We also read that “…Gaspard also issued a stern warning to media houses last night to cease publication of “anything which might jeopardise, hinder or otherwise prejudice the investigation or any possible proceedings which might result from it…“.
The Colman Commission has maintained the modern standard of Public Enquiries in that the public can choose from attendance in person, live TV, streaming webcasts, online transcripts and online witness statements. It seemed to me that the position being taken by the DPP could jeopardise the public interest in having this information broadcast in the widest possible terms.
On 10 November, my mind churned as I read this – “…Meantime, the Commission of Enquiry is set to restart on December 3 with former Central Bank Governor Ewart Williams and Inspector of Financial Institutions Carl Hiralal expected to take the witness stand…”
At this stage we are expecting to hear the testimony of the Chiefs in this series of disasters – Lawrence Duprey, Ewart Williams, Carl Hiralal, Robert Mayers, Ram Ramesh, Faris Al-Rawi, Amjad Ali, Anthony Rahael, Andre Monteil. I am very concerned that we are now seeing what appears to be a detrimental development in terms of complete transparency.
I was encouraged to read the DPP’s statement that
“I remain mindful of competing public interest factors including the fair trial rights of potential defendants, the freedom of the press and the requirement of open justice.”
This is definitely an aspect which needs our most intense scrutiny.
The former CLICO CEO
I have read his material and he takes a completely opposite view to me as to what has happened here.
My own view is that the CL Financial group was able to use its track-record of huge political donations and other links to obtain full State support on favourable turns when the inevitable crisis emerged. The CLF group was able to use its links to take advantage of the State. Dziadyk’s view is that the State used the crisis to take advantage of the CLF group in general and the CLICO policyholders in particular.
I cannot see any way that we could both be right. The critical point is that only the publication of the audited, consolidated accounts and other details I have been pursuing will allow us to see the truth of this matter.
But the fact that Dziadyk is a trained actuary, who was at the centre of the scene for so long, makes his testimony invaluable for the insights it will allow the Colman Commission. I was therefore very surprised to read that he is not going to be called as a witness.
Readers who are interested in having the testimony of Gene Dziadyk form part of the Colman Commission to state their support for that to happen – the Secretary to the Enquiry is Judith Gonzales and her email address is firstname.lastname@example.org.
These kinds of issues are exactly the ones on which the public input of Seenath Jairam, SC is sorely missed. Having decided to take the Ministry of Finance brief and later deciding to return it, any of Jairam’s subsequent public utterances will be coloured by those decisions.
That is the point I was making in the previous column on the sacrifices which leadership demands.
This is the video of my address to the 4th Biennial Business Banking and Finance Conference (BBF4) held at the Trinidad Hilton from 22 to 24 June, 2011. The session I participated in was devoted to ‘Lessons from the Financial Crisis: The Resolution of Failed Entities.’ [See the acknowledgement letter from the conference convenor here.]Video courtesy UWI
- Programme Air Date: 24 June 2011
- Programme Length: 0:15:21