It is generally known that no one enters into any business for any other reason than to make money. People invest because they expect a return on their investment and they anticipate, too, at some stage (the earlier the better) that they will not only recover their capital, but continue to turn a tidy profit. This is basic business and something the average entrepreneur does not need to go to school to learn. Anyone who is involved in any business where this is not the end goal needs to call it philanthropy—it simply isn’t business.
It is for this reason that it is advisable for entrepreneurs to conduct feasibility studies, which would determine, before they begin, the likelihood that their ventures would succeed. While the feasibility study, even when viable cannot guarantee success since other variables can change things, it is at least an indication that it is possible. In other words, and at the very basic level, it is the reason the sweets vendor sets up shop outside a school, as opposed to outside a cemetery.
With that in mind, and with the contentious parking system contract between City Hall and Smart City Solutions Inc (SCS) still a front burner issue, the question as to why the city never considered the practicality of parking meters in Georgetown prior to entering into the arrangement is certainly very relevant. Did the city, for example, consider using vacant lots for parking? Would they work? Ask the private sector operators of the parking lot on Regent Street not far from the City Mall. This is a small space, which is well utilized. It is not unusual to find this lot filled to capacity on a busy shopping day – a clear sign that if there were more like it chances are they would be used.
The answer to the question as to whether SCS conducted a proper feasibility study on the likely success of introducing parking meters in Georgetown lies perhaps in the fact that it is only now conducting public consultations, when the ink on the contract has already dried. Are citizens to imagine that the contract would be renegotiated or rescinded if enough of them opposed it? Because the possibility of that happening could be likened to the building of a snowman in Georgetown. Here’s why. According to the review of the contract conducted by the Attorney General’s Chambers, under the heading, ‘Characteristics of the Agreement,’ “Article 14 on Termination is in terrorem of the city.” Now, basic research revealed that in terrorem clauses are usually found in wills and are inserted by testators to prevent donees either from challenging what they have been bequeathed or forcing them to adhere to conditions attached to the gifts. In terrorem, which is Latin for in fear or as a warning, serves then to warn donees that if they contest the will or do not adhere to its conditions they stand to be disinherited and therefore to lose.
The in terrorem clause in the parking meters contract warns that if the city unilaterally terminates the agreement, it would be bound to “pay the concessionaire a lump sum payment equivalent to (i) the total direct and indirect, hard and soft cost cumulative gross investment of the concessionaire in the project; plus (ii) an amount equal to 25% of the direct and indirect hard and soft cost cumulative gross investment of the concessionaire in the project; multiplied by the number of years (or fraction) remaining under the term…(iii) the reasonable out of pocket and documented costs and expenses incurred by the concessionaire as a direct result of such termination.” This translates to the city losing big time if it tried to opt out of the contract; obviously it would need to think twice before doing so making this a win-win for the concessionaire.
Why did this contract need an in terrorem clause? From a layman’s perspective there are two reasons and either could be right. One explanation is that the concessionaire supposes the parking meter system could become a cash cow and therefore wants to ensure that maximum benefits are reaped for the contract’s 49-year duration without the city deciding this is something it can do on its own and moving in that direction. The second explanation is that it envisages the parking system not providing the city with the optimum benefits touted and therefore protects itself by way of a golden handshake in the event the city decided that it no longer wished to be part of the arrangement.
What it boils down to is that Georgetown is now locked into a contract that the Mayor and City Council had no business signing in the first place. Everything that is happening now – the financial and legal reviews and the voicing of dissent by councillors and the public ought to have happened prior to the pens being put to work.
One supposes citizens can extract some consolation from Mayor Patricia Chase-Green’s statement that her administration intends to work towards fulfilling the recommendations made in the review. Though quite how they intend to accomplish that is left to be seen.
