Archive for category Property Matters
This article is about the Las Alturas Enquiry into the collapse of two new Morvant apartment buildings erected by China Jiangsu International Corporation (CJIC) for the Housing Development Corporation (HDC). This Enquiry seems a politically-motivated one into a serious failure of professional practice which could have cost human lives. It is only in its opening stages, but it is already clear to me that this episode is one which contains serious lessons for our country in terms of the role of Enquiries; the role of the Chinese contractors; the culture of non-enforcement which we practice and of course, the impact of targets and political objectives on proper process. In the case of Las Alturas this is a large-scale multiple-housing project constructed on a former quarry-site on the Lady Young Road, just south of the lookout. Two apartment buildings which were completed in late 2010 were eventually declared uninhabitable due to severe cracking and the proposed demolition of those structures was announced at the end of May 2012. Each building comprised 24 three-bedroom/two-bathroom apartments, with the total cost of those buildings stated by HDC to be in the $29M range. The buildings were erected by CJIC on the design/build basis which usually places all responsibility for soil investigation, design and construction onto the contractor.
The role of Enquiries
The JCC offered to work with HDC in determining the causes of this serious failure and that offer was accepted, but our joint exercise did not last very long. The Commission of Enquiry was announced in September 2014 by the Prime Minister and despite the serious nature of the failure at this project, it seemed to suggest an attempt to discredit the Leader of the Opposition, Dr Keith Rowley, who was Minister of Housing between 2003-2007. I still feel that it was a poor choice of issue to investigate, given the burning questions at Invader’s Bay, the Beetham Water Recycling Project, UWI Debe and EFCL, to name just a few. The Terms of Reference of the Enquiry were published in the Gazette of 3 December 2014 and a five-month period was stipulated for its Report to be made to the President.The Enquiry, which is chaired by retired Justice of Appeal Mustapha Ibrahim, is to examine the causes of the structural failure of two blocks of apartments built in 2008-2010 for the HDC by CJIC. The other two Commissioners are eminent Structural Engineers, Dr. Myron Chin and Anthony Farrell. We have also seen reports of the contractor, CJIC, declining to appear at the Enquiry. I consider that refusal to be deplorable and a real sign that serious penalties need to be attached to that course of action. As it is, the fines for non-attendance are nominal, so people can refuse on a whim, since there are few prosecutions for that.
The role of the Chinese contractors
The really stunning revelation here is that the State was aware, since 2011, that these two buildings at Las Alturas had to be demolished. Despite this, CJIC was able, from early 2012 onwards, to compete for and secure the $500M+ contract for UWI’s Debe campus. The JCC protested at the poor process used in procuring that large-scale project. UWI Principal Professor Clement Sankat was advised that in view of the poor performance by CJIC in local State projects – including UTT Tamana, ETeck Wallerfield and various EFCL – no proper evaluation could proceed to recommend that further contracts be granted to that firm. Given that the normal pre-qualification process requires prospective bidders to identify claims, litigations or disputed matters, one can only wonder how CJIC was able to prevail in that project.
Culture of non-enforcement
One of the seldom-discussed findings of the Uff Enquiry was as to the lack of any culture of enforcement of contracts in the State construction sector, as set out in the sidebar. So, I was both thrilled and intrigued by the headline in this newspaper on Friday 6 March 2015 ‘HDC to sue Chinese contractor‘. The role and reputation of Chinese contractors in the local market have long been a bone of contention for the JCC. That statement was made in opening remarks by Vincent Nelson QC, who is the lead Counsel for HDC at this Enquiry –
“…The Housing Development Corporation (HDC) is moving to pursue legal action against China Jiangsu International Corporation (CJIC), the company contracted to construct the two towers at Las Alturas, Morvant, which subsequently had to be demolished because of structural damage resulting from land slippage. Attorney for the HDC, Vincent Nelson, was adamant about this as he delivered his opening statement at the Commission of Enquiry into the housing project yesterday at the Caribbean Court of Justice in Port of Spain…”
The culture of non-enforcement, considered with the chiefs at HDC (who transferred there after abruptly departing Caribbean Airlines), together with the special influence seemingly enjoyed by the Chinese contractors, all make me very sceptical as to whether a real and forceful lawsuit will ever emerge against CJIC.
The role of targets
Finally, one needs to consider the detrimental role of politically-motivated overambitious targets. The 2002 National Housing Policy set an unforgettable target of 100,000 new homes to be built in 10 years, which translates to an annual average of 10,000, which means a literally impossible 200 homes per week. Those are the facts behind the bizarre ‘numbers game’ which in turn likely had a decisive influence on the decision-makers at UDECOTT, HDC and of course the Housing Ministry. It would be useful, in this season of 100 houses a week and a billion dollars in land each year being promised, to reconsider the role of over-ambitious targets in distorting proper process. Curtis, the first sidebar is entitled
SIDEBAR: The Outline Timeline
This is only an outline, but it is instructive –
- December 2002 – UDECOTT acquires the Las Alturas site.
- 2003 – Initial layout prepared for a total of 120 apartments, which was revised later that year to 292 units given the Town & Country Planning Division’s advice on the allowable number of units.
- December 2003 – CJIC wins tender to design & build 297 apartments.
- November 2004 – Start on Site.
- 2005/2006 – Soil problems identified on part of the site.
- July 2005 – UDECOTT rejects project redesigns for lower units numbers of 142 and 167 apartments. Those redesigns were intended to avoid the unsuitable soils.
- July 2006 – the project is transferred from UDECOTT to HDC.
- 2008-2010 – Blocks H & I are built onto the areas reported to be unsuitable.
- 2011 – Blocks H & I are recommended to be demolished due to severe cracking.
We have also seen reports that both UDECOTT and the HDC were resistant to any reduction in unit numbers on the site.
SIDEBAR: Uff’s understanding
“Holding to account 29.21. …A recurrent feature of practice in the construction industry in Trinidad & Tobago is the extent to which rights and obligations prescribed by the Contract are or are not enforced. A simple example, discussed above, is the apparently mutual ignoring of contract provisions…”
At page 271 –
“…29.26. Underlying all the foregoing, however, is the question of enforcement of contractual rights and duties. What has been observed by the Commissioners is a culture of non-enforcement of rights, which appears to operate mutually, for example, by contractors not pressing for payment of outstanding sums while the employer does not enforce payment of liquidated damages. Whatever the explanation, the non-enforcement of contractual rights available to Government is a serious dereliction of duty on the part of those charged with protecting public funds. Equally, the non-pursuit of sums properly owed to commercial companies is a dereliction on the part of the directors of that company…”
The key point disclosed here is that contractual rights are seldom enforced in State contracts. A move to such a regular practice would require a major shift in our country’s governance culture.
The escalating episode of the apparent conflict between the oversight of Parliament and the Courts in this matter is a real learning experience for us all. I am clear that the Speaker spoke on Friday 23 January 2015 with the intention to convey that the High Court had sent him an official Notice which was decisive in the conduct of the business of Parliament.
Here is the contentious sentence of Speaker Wade Mark’s statement –
…I received only a few hours ago a notice from the High Court of the Republic of Trinidad and Tobago dated January 16, 2015, a matter involving Larry Howai and Azad Ali of the Sunshine Publishing Company Limited…
It seems very clear to me what the Speaker intended to say. Of course we now know that the statement was baseless and misleading. Misleading in the extreme.
The Speaker’s attempt to correct his statement only came after the Judiciary issued an unequivocal rebuff –
“…While there appears to be some misunderstanding which we expect the Honourable Speaker of the House to clarify, the Judiciary can confirm that no Notice, letter or any other communication on the matter was forwarded by the Court or any of its officers to the Speaker or any officers of the Parliament…”
How many people believe that the Speaker would have attempted to clarify, for that is all it was, if the Judiciary had said nothing?
- 24 December 2014 – Larry Howai’s attorneys issue a pre-action protocol letter against the Sunshine Newspaper for the article “$470 MILLION LOAN TO LOK JACK and Others”
- 26 December 2014 – Sunshine Newspaper publishes “$470 MILLION LOAN TO LOK JACK and Others”
- 30 December 2014 – Jack Warner MP files no confidence motion against Minister of Finance & the Economy, Senator Larry Howai.
- 5 January 2015 – Warner’s motion is approved by the Speaker, Wade Mark.
- 16 January 2015 – Larry Howai’s attorneys file suit against Sunshine Newspapers for libel.
- 22 January 2015 – Larry Howai wrote to the Speaker.
- 23 January 2015 – Warner’s motion is on the agenda for Private Members Day in Parliament. After the Speaker’s statements, the motion was abandoned.
- 26 January 2015 – The Judiciary issues a statement to deny the Speaker’s false assertions.
- 26 January 2015 – The Speaker issues a statement apologises to the Judiciary and admitting, for the first time, that the letter came from Senator Larry Howai.
- 30 January 2015 – The Speaker issues a new statement which apologised again to the Judiciary and claimed that he had not tried to censure the debate.
Sidebar: EMBA story
In November 2013, Wade Mark threatened to sue the Trinidad Expess over its articles on the controversy surrounding the award of an Executive Masters in Business Administration (EMBA) to him by the Arthur Lok Jack Graduate School of Business (ALJ-GSB). I have heard nothing more about that lawsuit.
That episode was one with very serious allegations of improper conduct of examination processes at the ALJ-GSB, which allegedly culminated in the award of the EMBA to the Speaker of Parliament, Wade Mark.
I was very concerned over that series of allegations, given the potential impact on the reputation of the UWI, the ALJ-GSB and ultimately, the very reputation of our Parliament, if they were proven to be factual. Most unacceptable was the silence coming from the Speaker on the central issues – Was it true that the Speaker had scored 91% in the Management Accounts exam? Had the Speaker been allowed more chances than usually permitted in those exams? Had the Speaker really written to the ALJGSB on his official letterhead? If so, why?
I confronted Mark directly the next time we met, which was on the grounds of the Parliament on Tuesday 3 February 2014. After a heated exchange, during which he told me that his performance in mathematics had always been weak, Mark declined my urging to clear the air on those serious concerns and took the position that his degree had been awarded by the ALJ-GSB.
It would really be useful if the ALJ-GSB could publish the range of marks for that MBA-level Management Accounts final exam, so that we could assess the frequency with which marks over 70% are achieved.
When Parliament sat on 23 January, the first item on the Agenda of the Private Members’ Day was the no-confidence motion against Larry Howai filed by Jack Warner. The Speaker gave everyone the impression that the High Court had sent an official Notice to Parliament and never mentioned that in fact he had received those documents as part of a correspondence from Senator Larry Howai, Minister of Finance & the Economy. That Notice was said to relate to the litigation between the Minister and the Sunshine Newspaper on the financing by State-owned FCB (which had been headed by the Minister during that period) of the Carlton Savannah Hotel in Cascade. That presentation was very misleading and raised the genuine issue as to whether Members facing potentially embarrassing questions in the House had discovered a novel way to seek the protection of the Courts.
Before inviting Members to speak, the Speaker issued a clear caution –
…And in those circumstances, unless the Member who is about to speak can tell this House that what he is about to say is not going to be in any way, adverse, to what is before the High Court of Trinidad and Tobago, I would have to deny this Motion although it has been approved…
Ultimately, Warner relented and effectively withdrew his motion.
The Timeline in the Sidebar sets out the sequence of events and it is a stark example of how the Parliament and the Courts have become entwined in this latest rounds of the Silly Season.
The worse part is the third statement, made on 30 January 2015, which did little to restore confidence. It seemed that the Speaker’s was attempting to reverse his earlier clear caution to the House, claiming that –
…I wish in closing to ask Honourable Members to note that after I brought to the attention of the House the existence of the said legal proceedings, in exercise of my discretion as the Presiding Officer, I permitted debate on the motion to commence. I did not deny or shut down debate on the motion. It was the mover of the motion who, of his own volition, after he commenced his contribution, decided not to proceed…
It is true that Mark did not directly rule that the debate had to be halted, but his caution effectively shut-down the debate. That caution was based on a false statement and omitted the critical fact that the party to the debate was in fact invoking the Sub Judice principle.
At this point, I am still unclear. If Speaker Mark is in fact saying that he had no objections to the motion being debated, then that debate should be reconvened at the earliest possible sitting. The stream of letters which are beneath this disturbing sequence of events must be published, the sooner the better.
The position of Senator Howai is also inexplicable. Howai and Leader of Government Business in the House, Dr. Roodal Moonilal MP both claim to have been ready to debate the motion. So why send the letter to the Speaker?
This is real mind-games with the peoples’ business, I hold no brief for Warner or any of the other Members, they are all capable of seeking their own interest. The issues of the Carlton Savannah Hotel financing seem to be serious ones and we need to insist that the debate is started at the earliest opportunity. Some points on that issue are in the Sidebar.
I am not calling on the Speaker, or anyone for that matter, to resign. The Speaker can start to restore this situation by publishing those letters and convening an early debate on Warner’s motion.
Sidebar: Carlton Savannah Hotel
It has been reported that FCB is owed over $400M borrowed for the construction of this elegant hotel on the outskirts of the Queen’s Park Savannah. That hotel is now up for sale via the receivers, Deloitte, at an asking price in the region of $120M.
The key issue evident here is the huge impact of the Hyatt Hotel on its POS rivals since its opening in early 2009. A combination of its virtual monopoly of State functions and the imperatives imposed by how it was funded have made Hyatt a unique hybrid, being at once the most elegant and most economic. Carlton Savannah seems to have been eclipsed by Hyatt and it is not the only one.
Some of the key questions would be how was the project appraised? Was sufficient security taken for this loan? What accounts for the tremendous decline in the value of this asset?
This article is to engage the issues of falling national revenues due to price declines for fossil fuels, the ongoing commentary and the PM’s 8 January 2015 statement with its attendant criticisms. I am going to focus on the role of the real estate and construction sectors in this unfolding series of serious challenges.
This is the graph and table from my previous budget commentary ‘A Fistful of Dollars‘ to illustrate the trend in terms of how successive governments have attempted to balance revenues and expenditure.
The Public Procurement & Disposal of Public Property Bill was passed by the Senate on Tuesday 16 December 2014, completing its journey through the legislative process. That is an historic achievement for our country, so it is essential that we take our bearings and properly record the moment.
This important new law to control transactions in Public Money was the objective of a long-term, collective campaign by the Private Sector Civil Society group (PSCS) of which JCC was a member. The JCC met with the leaders of the Peoples Partnership in April 2010, with one of the key promises emerging from that meeting being that new Public Procurement laws would be passed within one year of an election victory. It has taken four and a half years for the government to achieve that.
This achievement was only possible because of our collective efforts. Ours was a diverse group which resolved to campaign together for this critical reform of our country’s laws to ensure effective control over transactions in Public Money. Read the rest of this entry »
The proposed development of Invader’s Bay will be the largest in our Capital City in living memory. The entire process is tainted by fundamental irregularities, any one of which ought to be enough to stop the development.
Some of those irregularities at Invader’s Bay include an improper and voidable tendering process; failure or refusal to hold Public Consultations; breach of the Central Tenders’ Board (CTB) Act and most recently, a wrong-sided policy on legal advice.
The State has appealed the High Court decision of Justice Frank Seepersad on 14 July 2014 to order publication of the legal opinions on which they had been relying thus far. That hearing is now set for Wednesday 28 January 2015 at the Appeal Court in POS. At the preliminary hearing on Thursday 20 November, the State was represented by a seven-member team of attorneys, led by Russell Martineau SC.
Minister Tewarie has repeatedly told the public that the Appraisal rules for the Invader’s Bay development were first announced in his speech to the Annual Dinner of the T&T Contractors’ Association on Saturday 5 November 2011. That is true, I was there and heard the Minister do just as he said. The issue here is that the closing-date stipulated in the Invader’s Bay Request for Proposals (RFP) was 4 October 2011, which was over one month before the rules were published. Given that fact, the proposers would not have known the rules of the competition and it is fair to say there was no competition at all. None. Just imagine the rules for a Calypso competition being distributed the week after the singers had performed. The RFP process for Invader’s Bay was therefore improper, voidable and illegal.
The most disturbing aspect of this nonsense, is that it raises disturbing questions as to what is fast becoming a new normal in our society. To my mind, there are two possibilities.
The first is that the Minister was simply unaware that he was describing improper and unlawful acts. If that is the case, one has to wonder at the quality of advice available to our Cabinet. Are we now to accept that this is the proper way to proceed?
The second possibility is that the Minister was properly-briefed that the late publication of those rules was improper and that the entire RFP process was therefore voidable, but chose to act as if the whole process was ‘above-board’. That Minister continues to insist that there is nothing improper taking place at Invader’s Bay and so on. I tell you. Read the rest of this entry »
The continued dispute over the Debe-Mon Desir Link of the Point Fortin Highway and the growing public debate over this issue require further attention to certain critical aspects.
The Armstrong Report was published in March 2013 after a process agreed between parties to the dispute over this highway link. It is a significant achievement in the journey to a more considered and consultative approach to national development. Given the shifting grounds of the dispute and the nature of the various statements, it is necessary to clarify some of the key issues.
The three main issues to be clarified are –
The Armstrong Report
The State’s position in relation to The Armstrong Report is a critical element of the dispute, so it is important to detail how this has morphed, like so much else in this matter. The Ministry of Works & Infrastructure Press Statement of 3 December 2012 ‘welcomed the inputs…from the JCC, FITUN, T&T Transparency Institute and Working Women‘ and went on to note that ‘the discussions had been very fruitful‘. That statement settled a basic framework for a Review of the elements of the link which were in dispute, with the preliminary Report to be provided within 60 days ‘to NIDCO for its consideration and publication thereafter’. Some people have tried to restrict the meaning of NIDCO’s ‘consideration’ of The Armstrong Report to a merely editorial vetting which implied no commitment to any post-publication consideration. The only conceivable reason for a party to this kind of process to have the right to review the preliminary Report would be to address factual errors in a situation in which the completed Report is of some significance.
At the post-Cabinet Press Briefing on Thursday 14 February 2013, the then ‘line Minister’ for NIDCO, Emmanuel George, said that the Report gave the State the ‘green light’, thanked the members of the Highway Review Committee and was reported to have agreed to ‘…as far as possible, accommodate their suggestions and recommendations…‘.
The only reasonable meaning to put to the State’s actions and agreements at the time was that there was a commitment to consider the recommendations of the Report. Of course we are now hearing from officials that there was no commitment to adopt or consider any of the recommendations in The Armstrong Report.
As a reality check, just ask yourself what would have been the position if The Armstrong Report had fully vindicated the State’s actions.
The Highway Contract
The high cost of halting construction is the main argument being used by the State to criticise The Armstrong Report and in its litigation with the Highway Re-Route Movement (HRM). On 25 February 2013, NIDCO wrote to JCC with its comments on the preliminary Report and the first page of that letter noted its concern that no consideration had been given to the fact that a $5.2Billion construction contract was in existence for this project. (Comment #2 on p. 30) That complaint is fundamentally misplaced, to say the least, since technical and scientific reviews do not normally take financial or commercial elements into account as material considerations.
At the level of general principles, two examples can clarify the position. In the widely-used two-envelope tendering situations, the tenderers submit separate technical and financial proposals, which are examined independently, with points awarded for each. The eventual selection is made after considering both those scores.
The most recent Commission of Enquiry was announced by the Prime Minister on 18 September 2014 into the HDC apartment blocks which had to be demolished in 2012 at Las Alturas in Morvant. (pp. 68-70) When HDC recognised that the stability of these newly-constructed hillside apartment blocks was in jeopardy, they obtained technical advice from professional engineers. It is doubtful whether those reports considered the financial and commercial fact that the building had already been erected or the losses that would accrue if they were to be demolished. Very doubtful. Indeed, one would rightly be suspicious of technical advice which was coloured by commercial considerations.
SIDEBAR: NIDCO’s reply to JCC
The JCC wrote to NIDCO on 10 October 2014 to request a detailed statement as to how the ten recommendations of The Armstrong Report had been treated and we met with NIDCO’s team on 17 October to discuss that request. NIDCO agreed to provide the details to JCC by Friday 24 October, but that reply is still awaited at the time of this writing.
Now, to deal directly with NIDCO’s criticism of The Armstrong Report, we need to note two facts –
- Terms of Reference – If, despite the general principle, NIDCO had wished to have the construction contract for the highway considered alongside the other factors to be examined during the 60-day Review, it could have made that request. The fact is that NIDCO never made that request, so the construction contract was not included in the terms of engagement for this review exercise.
- The Highway Review – If, having not requested that the construction contract be included in the review, NIDCO subsequently wanted it considered, there was an option to submit it. NIDCO never submitted the contract to the JCC or the Highway Review Committee.
Proceeding from the general principle to the particulars of this case, it is therefore clear why the Highway Review Committee did not consider the contract as part of the review process.
Note also that NIDCO has not submitted the contract to the Court during this extended litigation with the HRM.
Submitting the contract to either the Highway Review Committee or the Court would have exposed the underlying financial and commercial arrangements, as well as the repeated claims of adverse cost implications, to critical scrutiny.
Lastly, there is now a series of new statements emerging from the HRM and its supporters which did not form part of the original concerns of that group. The most striking of these is that the highway contract was not tendered. That allegation can be found in the HRM’s International Media Release of 24th September 2014 on their Facebook page and on the AVAAZ campaign webpage, as well as in other media statements by various persons supporting the HRM. That assertion is most alarming for two reasons.
Firstly, that is an entirely false assertion since the highway contract was tendered in 2010. Consider this extract from the top of page 19 of The Armstrong Report –
…On May 07, 2010, the closing date for this procurement, three proposals were submitted by 1.00 p.m. (from the 29 Request for Proposals issued)
The three entities submitting tenders were, in alphabetical order:
- China Railway Construction Corporation Limited;
- Construtora OAS Ltda (OAS); and
- GLF Construction Corporation…
On May 13, 2010 The NIDCO Evaluation Committee submitted its Final Report and recommended OAS as the Preferred Respondent, and so informed OAS by letter dated May 25, 2010…”
Secondly, those baseless assertions by the HRM show a lack of familiarity with the contents of The Armstrong Report. The HRM has relied heavily upon The Armstrong Report in its recent campaigning, so one can only wonder at the implications of these repeated claims.
Given the public positions taken by the protagonists, it seems unlikely that mediation can be a real option.
The Armstrong Report is a serious advance in terms of our nation’s development, being to my knowledge the first Civil Society review of a State-sponsored project in the Caribbean region. That Report would not have existed without Dr. Wayne Kublalsingh’s sacrifice, but the full benefits of the Report can only be realised by a proper and open consideration of its recommendations. Only then can we gain from the increased public attention to the complex issues of national development and really start to learn the lessons.
National development is a real and inescapable challenge which will continue to evolve, whoever is in government. That challenge can only be properly addressed by a fact-based approach adopted by all parties.
The Trinidad and Tobago Guardian published part 2 of its interview with Afra Raymond in the 1 September 2014 edition of the newspaper.
Recent reports that the HDC housing waiting list has reached 200,000 have thrown up questions about strategies for land usage, housing design and urban planning in T&T. In our series on housing, JOSHUA SURTEES speaks to architects, planners and surveyors to find out if there is enough land available, whether everybody on the list can get a place to live and what kind of accommodation makes best use of space while providing comfortable, functional living that complements people’s lifestyles. Part four features AFRA RAYMOND, president of the Joint Consultative Council, MD of Raymond & Pierre Ltd chartered surveyors and an expert on land usage issues, procurement and housing.
How many ultra-rich, multiple homeowners are there?
How many, I don’t know. But as a practitioner I can tell you it’s a significant part of what takes place. It informs how, when parcels of land become available, what are the forces that compete for it, and this is where the boundaries between public and private become very elastic. If the forces on one side have the capacity to go after that piece of land and get it before the government, that has an effect on what options are available to the government to build affordable housing…
For More, click here.