If the only thing the Granger government did this term is put this man in an orange jump suit it will be half way there for me.
Govt. instructs Brassington to explain all NICIL-funded Projects
By Kiana Wilburg
For years, the National Industrial and Commercial Investments Limited (NICIL) has been touted to be a parallel treasury in the country.
It was used by the former administration to invest millions of taxpayers’ dollars into highly risky development projects.
NICIL reportedly also spent tens of millions of dollars to build roads, drainage and culverts, and to lay pipelines and in some cases, underground power cables. The developed house lots, complete with infrastructure, were then sold to former President Bharrat Jagdeo, several ministers and Government officials and friends.
With a new board and Chairman in place, the government has instructed the company’s Chief Executive Officer, Winston Brassington, to explain NICIL’s investments into all projects over the years.
He must also honestly state the position of the company’s assets.
This is according to NICIL’s new Chairman Dr. Maurice Odle. Dr. Odle said that there has been one meeting thus far at which Brassington was told to prepare a “position paper” to say what policies and strategies were employed to justify investments made by the company into certain projects.
When this report is prepared, the economist said that it will be examined to inform the future decisions to be taken with the company. Dr. Odle said that Brassington has until month end to submit the “position paper.”
He explained that the paper is expected to give good reasons for investments into the Marriott Hotel, the Berbice River Bridge Company and Pradoville Two scheme.
Dr. Odle said that the Board is already aware of some of the financial assets of the company which are held in several accounts. He reiterated that the Board is particularly interested in this “special business model” that was used to inform the types of investments made by the company.
The NICIL Chairman added that the Board has several concerns.
“We have an issue with the dividend policy, the manner in which assets were transferred to persons, what really happens with the proceeds for privatization, the misuse of state lands, the degree to which funds are transferred from NICIL to the Consolidated Fund and one would also like an indication about what really goes into the selection process for certain projects,” the NICIL Chairman expressed.
He added, “In any case, NICIL was just holding too much money and Brassington will have to say why this has been happening. Another concern of the board is the whole business of risk taking. With some of these projects, the former government in joint partnership agreements took most of the risk.
“How is the private investor not made to take any risk? So naturally, we are also concerned with some of the public-private partnership agreements NICIL got into and we want to know everything about it. We want to know why the state was made to take a lot of risk.”
Dr. Odle said that he is also worried about NICIL’s shareholder control in certain companies especially since it has made huge investments while minor investors are given controlling interest.
He confirmed that he was speaking in this context about the Berbice River Bridge Company.
Experts very close to the Bridge have disclosed that the current contractual arrangements allow for two entities to control 50 percent of the company: The NEW GPC and Hand In Hand Trust Corporation.
New GPC, a company owned by Dr. Ranjisinghi ‘Bobby’ Ramroop has close relations to former President Bharrat Jagdeo and, according to an article on chrisram.net some time ago, that company has two Directors on the Berbice Bridge Board.
The structure of the company allows equity shareholders whose investment is less than five percent ($400 million) of the total funds of the company to exercise controlling interest over the company. Of the $400 million, the Ramroop Group owns 40 percent and the Hand-in-Hand Group owns 10 percent.
The contract also provides for the equity shareholders to receive 23 percent on their investments. The coalition government, in the lead up to the May 11, 2015 elections, had accused the previous administration of hijacking the Berbice Bridge Company Inc. (BBCI), deliberately structuring operations in a manner that allowed investors and their close friends with disproportionately small investment to control the company.
Chartered Accountant, Chris Ram, earlier this year, wrote that Government, inclusive of the NIS, owns 76 percent of the issued shares of the company. NICIL, Ram said, owns what is called a Special Share in the company and according to the Articles of Amendment of the company, “No action can be taken by the Bridge Company, without the affirmative vote” of NICIL.
The NIS has $950M in Preference Shares and is entitled to fixed dividends. The equity shareholders are Secure International Finance Company ($80 million); Demerara Contractors Limited ($40M); Hand in Hand Motor & Life Insurance Company ($40M), the Ramroop Group ($160 M) and the NIS ($80 M).
Ram has lamented the fact that despite having some 70 percent of the issued shares as well as a Special Share, control of the company is exercised by less than a handful of entities.
As for the Pradoville Two deal, the Ministry of Housing had called on the country’s State Asset Recovery Unit to investigate that special arrangement as it speaks of abuse of state resources by the previous administration.
The matter is also being examined under forensic audits being carried out at both the Central Housing and Planning Authority (CH&PA) and NICIL.
Minister within the Ministry of Communities, Keith Scott, had disclosed that the area situated at Parcel 172 Plantation Sparendaam and Parcel 237 Plantation Goedverwagting, known by citizens as Pradoville 2 was “mutated” and sold, subject to a Cabinet decision during Bharrat Jagdeo’s last term in office.
The state-owned NICIL/Privatisation Unit was authorized to do all acts necessary to ensure the vesting of the new development project in the CH&PA, the body which is tasked with overseeing housing developments in Guyana.
According to Scott, the allocation of parcels of land to several former ministers, senior Government officials and friends close to the PPP administration, and the method to determine the prices paid, were not assessed by the CH&PA.
He said that CH&PA seemed not to have been in the loop. The infrastructural works were contracted to Atlantic Construction by NICIL/Privatisation Unit.
There is no evidence that the house lots sale was advertised or what procedures were used in the allocations of the parcels of the ocean-front properties.