Several companies, including a United States (US) company with Middle Eastern connections, have bid to buy three of the six sugar estates owned by the Guyana government, on condition the buyers would continue to plant sugarcane and guarantee local employment, officials said Thursday.
Managing Director (Deals) of PricewaterhouseCoopers Tax and Advisory Services Limited, Wilfred Baghaloo said the prospective investors, before submitting their bids, had questioned whether they would be competing with the state-owned Guyana Sugar Corporation (Guysuco) for the same markets, access to cane varieties and the nursery and shipping logistics.
“The major concerns of potential bidders related to regulations that are needed to ensure fair competition between government, that is the legacy Guysuco,” he said. “As you know the government has agreement with SPS, a sugar protocol with the US (United States) government for access to sugar. We no longer agreements with the EU (European Union) but, in making their assessment of markets, they would like to know do they have access to the same markets,” Baghaloo added.
Other areas of concern by the likely investors, he said, included the state of the assets such as whether they are scrap metal or a potential going concern. The National Industrial and Commercial Investments Limited’s (NICIL) Special Purpose Unit has been reactivating the Enmore, Skeldon and Rose Hall factories to offer them as going concerns, months after the Guyana government had closed them down.
Baghaloo declined to immediately release the names of the companies, but said they included one from the US/Middle East and several other local companies. He promised to release the bidders’ names on Friday after sifting through the 10 submissions to first ascertain which companies submitted bids for one or more than one estates.
“We got ten envelopes but that doesn’t mean we got ten bids and we are not able to determine that,” he said, adding that the team knows the names of the companies but first needs to summarise them….In other words, you can have one person submitting three bids,” he said. The PricewaterhouseCoopers official said the bidders include one based in Florida with shareholders in the Middle East, and other companies from the Caribbean. The locally-owned Demerara Distillers Limited has long expressed an interest in taking over the Enmore Estate/ East Demerara Estate.
Unlike the process at the National Procurement and Tender Administration Board, under the Procurement Commission Act, in which the names and price offerings are made public, Baghaloo said the prices would not be disclosed until most likely at the end of the process when Cabinet makes its decision
Privatisation Specialist at the National Industrial and Commercial Investments Limited’s (NICIL) Special Purpose Unit, Shawn Persaud said buyers of the Skeldon, Enmore and Rose Hall estates would be expected to use the sugar industry specific infrastructure and the labour. “There would be some importation of labour but that’s mainly the technical people if they can’t find them here but our casual workers have to be employed,” he said.
Baghaloo said sugarcane could be used to produce cosmetics, molasses, sugar crystals, liquid sugar, and electricity generation.
Although the bids were opened at 4 PM Wednesday in the presence of officials of PricewaterhouseCoopers, Auditor General’s Office, members of the steering committee and bidders, Baghaloo said he could not disclose the names now.
Going forward within the next 30 days, he said business and asset valuations would be conducted, ascertain whether the bids complied with the information memoranda that were sold at US$1,000 each, analyse the bids in keeping with the evaluation criteria, made recommendations to the Steering Committee and the National Industrial and Commercial Investments Limited’s Special Purpose Unit which would eventually make recommendations to Cabinet.
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Damning claims of high-level mismanagement, wild spending and improper procurement practices made by low-level employees, which showed a pattern of misbehaviour by top company officials, sparked the in-depth audit into the operations of State-owned Angostura Holdings Ltd.
The company, which has an asset base of over $3 billion, is one of the top performing subsidiaries of the CL Financial empire acquired by Government after CLF was unable to pay its debt from the 2009 bailout of the company. Its shares were also used by the Government to support the National Investment Fund in raising $4 billion to off-set the national budget deficit.
The NIF bond is supported by some of the strongest CLF companies, with a collective market value of approximately $7.9 billion, including shares of Republic Financial Holdings Limited, One Caribbean Media Limited, West Indian Tobacco Company Limited, Angostura and Trinidad Generation Unlimited. The Government said the initial offer was over-subscribed and plans on second venture next year.
Since news of the Angostura investigation broke, however, people and organisations which invested in the NIF remain anxious about the outcome of the probe, according to one big investor. But there has been silence from the Ministry of Finance and other Government ministries on the matter, although Prime Minister Dr Keith Rowley has been on a recent campaign denouncing white-collar crime.
And in the face of the audit and the company being in the media spotlight, one Angostura director, Kirby Anthony Hosang, resigned suddenly last week. No reason was given by chairman Terrence Bharath, who faced the media on Thursday and confirmed the audit but gave little other details about the allegations raised in an exclusive Guardian Media article last week.
Angostura confirmed Hosang’s departure, effective October 31, in advertisements in yesterday’s newspapers.
Copies of the bombshell complaint, filed by an anonymous whistleblower, have been made available to Guardian Media exclusively.
Accounting firm PriceWaterhouseCoopers, which is being assisted by law firm Fitzwilliam Stone Furness-Smith and Morgan, will meet with the company’s Chief Executive Officer Genevieve Jodhan tomorrow to give her an opportunity to respond to troubling allegations over the award of multi-million dollar security contracts to MH Tactical, a company with close ties to a serving police officer, Sgt Mark Hernandez, who has been described as “an asset to the State and National Security.”
Police Commissioner Gary Griffith has defended Hernandez, 42, a highly-trained operative who is assigned to an elite unit—the Special Operations Response Team—saying a former commissioner of police had authorised the Special Reserve Police officer to be a consultant at a St Augustine-based company owned by Hernandez’s wife.
However, Hernandez describes himself as the executive chairman and owner of MH Tactical Response Group on his LinkedIn profile and is the face of the company on its Facebook page.
Hernandez is one of the officers who played a key role in rescuing kidnap victim Natalie Pollonais from her abductors in El Socorro in September and has led a hand-picked team of police and soldiers in other major anti-crime operations, according to National Security sources.
Jodhan, who has opted to proceed on 20 days vacation leave effective October 29, has maintained that her authorisation of the contracts, valued at $2.2 million, to MH Tactical and two subsidiaries—New Order Security Services (NOSS) and Corporate Asset Management (CAP) were above board. Another contract to Building Spaces Ltd is also under review, according to company officials.
Sources close to Jodhan said she intends to defend her name tomorrow and will instead point fingers at top company officials as having an agenda to remove her from office. She had initially been sent on administrative leave after she returned from Harvard University on study leave, but that decision was retracted after she agreed to go on vacation.
An investigation into the allegation by former judge of the Caribbean Court of Justice Rolston Nelson did not result in any disciplinary action.
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(CNS): Royal Caribbean Cruises and Carnival Corporation have both made financial commitments towards the Cayman Islands’ controversial cruise berthing project, government has revealed. The tourism ministry said it is now in a position to issue the final tender documents to the shortlisted bidders, only one of which is partnered with the two cruise lines. Officials said that the financing commitment will be provided from the cruise lines in partnership with the preferred bidder and the agreement will be included in the invitation to submit final tenders that will be sent to all three remaining bidders.
“I am very pleased with the progress being made to move the procurement process for this project steadily ahead,” said Tourism Minister Moses Kirkconnell in a release on Sunday about the deal, reportedly signed on Tuesday.
“Formalising this agreement represents the achievement of a major milestone and is a great example of a public private partnership working for the benefit of the country. While the cruise lines had verbally confirmed their willingness to finance the CBF project, having signed agreements in place takes that commitment to another level,” he added.
The three shortlisted bidders will now be expected to submit their final bids by the end of the first quarter of 2019 and the winning bidder will be announced shortly after that, the ministry stated. Once the preferred bidder has been approved by the Public Procurement Committee, they will be contractually obligated to undertake a number of activities, such as conducting a geotechnical survey and submitting a coral relocation plan, a dredge management plan and an environmental management plan, according to the press release.
The Environmental Statement and Environmental Impact Assessment (EIA) will also be updated and submitted to the Environmental Assessment Board and will then go out for public consultation as part of the EIA process.
The announcement that the two cruise lines had agreed to part finance the project was first revealed by Premier Alden McLaughlin on Friday evening at the event marking the arrival of the first of Cayman Airways’ four new aircraft, when he said that no public money would be required to build the piers.
“This represents a huge vote of confidence in the Cayman Islands and in the viability of this project,” McLaughlin told the audience gathered to welcome the Boeing 737 Max 8, an investment made to help continue the islands’ historic overnight tourism success, which many people believe will be threatened by the decision to build the cruise berthing facility.
But McLaughlin remained undeterred by the risks of undermining the lucrative stay-over side of the tourism sector, even though a large section of the community remains unconvinced of the justification for the cruise port.
Describing the deal with the cruise lines as a “very significant milestone on the critical path towards the delivery of the new port facilities that this country needs to secure its economic future”, the premier pointed to the figures by PricewaterhouseCoopers in the outline business case to support the project.
“There is no future in doing nothing,” he said. “But in building the cruise piers the experts at PwC have told us that we can expect a net economic benefit of some $245 million plus the creation of hundreds of jobs during and after construction.”
Those figures remain controversial because the predictions are based on unsupported data and assumptions, in particular the claims about passenger spend. Despite the numerous unresolved issues, not least the simple logistics of where all of the passengers needed to cover the costs will go once they get here, McLaughlin said that securing the funding and active involvement of the cruise companies was crucial to the sustainability of the project.
“It is important to our many merchants, large and small, to the hundreds of people who they employ, to our taxi and tour operators, and to many, many Caymanians who make a living directly or indirectly from cruise tourism,” he said.
However, there are still many questions about the number of locally owned businesses and Caymanians employed that depend solely on the cruise side of tourism, as many of the jobs are held by permit holders and many are also equally dependent on the overnight business. McLaughlin also failed to spell out the details of the “hundreds of jobs” that would be created after construction.
One of those many other unanswered questions is how many jobs and businesses will be lost in George Town as a result of the destruction of the underwater attractions in the harbour. The devastating impact that this project will have on the marine environment and the jobs and businesses at risk were also dismissed by the premier, who said that the redesign would help mitigate the destruction of marine life.
Recent revelations, however, have shown that the projected reef destruction under the new design is only 7% less when compared to the first drawings. In addition, the problems of silt and sediment killing reefs during and after construction have not been addressed.
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Bahamians must “start raising hell” over recent revelations of government waste, fraud and questionable contracts, a governance reformer urging: “We’ve got to move past this horrible era.”
Robert Myers, the Organisation for Responsible Governance’s (ORG) principal, told Tribune Business that The Bahamas desperately needed “to turn the corner” on practices that had caused “so many third world countries to go down in flames”.
He warned that Bahamian society “cannot survive” unless it halts “the blatant waste of taxpayer dollars”, which is threatening “to drag all of us down with it” through ever-increasing taxes, inferior public services and the undermining of a meritocracy.
Mr Myers’ comments came after the Auditor General’s report for the 2014-2015 fiscal year, tabled in the House of Assembly last week, revealed multiple incidents of fraud, corruption, waste of taxpayer funds and public sector mismanagement resulting from the absence of weak controls and inadequate supervision.
The report disclosed that the shredding of documents to cover up fraudulent activities was “a matter of routine” at the Department of Social Services, while the Post Office Savings Bank was possibly the world’s only financial institution not to know how much money it holds on behalf of depositors.
The Auditor-General also cited missing funds that could not be accounted for at the Road Traffic Department, along with instances of licensing fee evasion, duplicated licence slips and fraudulent insurance certificates.
That report’s release followed the tabling of two assessments in the House of Assembly that questioned whether the Ministry of Finance obtained “value for money” on a computer supply contract and deal to rent three apartments to house foreign consultants. (see story HERE)
FTI Consulting, the Bahamian accounting and advisory firm that investigated the Ministry’s procurement processes and contract awards on the Auditor General’s behalf, said neither deal was put out to competitive bidding with the Government’s Tenders Board is routinely bypassed in the awarding of contracts that should go before it.
While not commenting on the specifics of all these findings and the Auditor General’s report, Mr Myers said successive governments – as well as the public service generally – needed to be held accountable for the way in which they have used taxpayer monies.
He also called on the Ministry of Finance to “answer” why the contracts analysed by FTI Consulting had not been put out to competitive tender via public bidding, and why it had seemingly failed to follow its own rules over the awards.
“It’s the people’s money. Where’s the accountability and responsibility of the public sector to the people and the people’s money?,” Mr Myers asked. “It’s our money they’re spending. If you didn’t do your job back then you should be held accountable.
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While government is moving to ensure 20% of all contracts go to small contractors from January 1st, 2019, Public Procurement Commission (PPC) Chairperson Carol Corbin says that it will need to change the procurement law to do so.
“It is in the Small Business Act but not in the Procurement Act. The Procurement Act is the principal act that governs procurement and which guides procuring entities,” Corbin told Sunday Stabroek in an interview.
“There is nothing wrong with giving preferential treatment… many other jurisdictions do it but it is in their act—South Africa, Tanzania, Trinidad and other places… We have done the research…but it must be in the law. The opinion of the PPC is that the Procurement Act must be amended before this can be implemented properly,” she added.
Asked if she believed that the programme should wait until the law is changed, Corbin said that amendments could be enacted in a short timeframe. “What does it take for the amendment to be made? If the legislators want that to happen, then they have to do what is necessary,” she stressed.
Corbin said that while she has no problems with quotas to cater for specific groups, that mechanism must be guided by law since it is currently discriminatory to shut out large contractors or any other group from bidding or awards.
In December of last year, Minister of Business Dominic Gaskin had told this newspaper that the government’s campaign promise to ensure that small contractors are given at least 20% of all state contracts was on track and that 2018 would be “the year for small contractors.”
Government had made reference to the Small Business Act, which speaks to small businesses accessing at least 20% of contracts. The Ministry of Business, through its Small Business Bureau, was charged with formulating a plan that would see this government initiative implemented.
It followed an announcement made by Minister of Finance in 2015, during the first budget the APNU+ AFC administration presented.
The rationale behind the initiative was to create more employment opportunities and to expand those opportunities across a wider swathe of business interests. If it is allowed to function as it should, it should also create opportunity for the opening up of new small businesses based on opportunities that will emerge over time for new contract areas within the state system.
At the beginning of 2016, Minister of State Joseph Harmon met with members of the General Contractors Association of Guyana (GCAG) and he again reiterated the government’s commitment to working closely with the ministries of Public Infrastructure and Business to ensure that small contractors were awarded 20% of all government contracts as enshrined in the law.
“If the country gives out $10 billion in contracts per year, 20% of that should go to small contractors,” Harmon was quoted by the Department of Public Information as saying.
The matter was discussed during a Cabinet sitting in October, 2016 and a commencement date was established. This was according to Harmon who, during a post-Cabinet press conference on the 19th of October, said that Cabinet gave its approval.
He referred to the Small Business Act of 2004, which provides for at least 20% of all contracts required annually by the government, to be obtained by small business. “Cabinet has approved the implantation of a small business procurement programme for implantation by the Ministry of Business by January 1st, 2019. In this regard, a basic set aside measure for all government procured goods services and works, up to $30 million; a set aside for sub-contracted measures for all government procurement within $30 million and $200 million; and that all the ministries, agencies and regional authorities will participate in the implementation of the programme,” he said.
“Specifically, the ministers agencies and regional authorities be required to provide annually, projections of the value of small business procurement by sectors, based on their annual procurement plans to the Small Business Bureau… set aside measures approved and provide a quarterly report on procurement payments to the SBB. This programme will ensure that small businesses have a fair access to government’s procurement opportunities through a transparent and efficient process and will also enhance the economic impact of public spending,” he added.
Breaching the law
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