Seeking to squash opposition accusations of a lack of transparency on the initial development of D’Urban Park, the government yesterday said Homestretch Development Incorporated (HDI) was a special purpose company that was set up to manage the preparation of the facility for the independence jubilee celebrations in the absence of a budgetary allocation and none of its directors received any compensation for their roles.
The government also sought to defend the involvement of Education Minister Dr Rupert Roopnaraine as a director of the company, with President David Granger saying his role was only to represent the government’s interest.
“It was decided that a special purpose company, called HDI… Homestretch Development Incorpo-rated, would be used to continue the preparations, which had been started, until the government had passed the budget and put other infrastructural institutions in place and when that came to an end the responsibility for HDI, that is particularly with regard to D’Urban Park, transferred to the Ministry of Public Infrastructure. So there is nothing secret, or there is nothing criminal about the HDI, it did serve a purpose and when that purpose or that usefulness came to an end, responsibility was handed over to the Ministry of Public Infrastructure,” President Granger said yesterday during a segment on The Public Interest interview programme, which was pre-released by the Ministry of the Presidency ahead of today’s scheduled broadcast.
Asked about the company only being registered this year, while the D’Urban Park works would have been initiated last November, Granger said it was only a month or two difference.
“As I explained, when we went into office, budgetary provision was not made for the construction of that stadium in time for independence celebrations in May, 2016 and it was felt prudent to establish a special purpose company… when we realised that we had to engage in contracts and agreements with construction firms to build the stands and everything else that was involved in the stadium. And as soon as we could, we terminated the work of that company and established the Ministry of Public Infrastructure with the sole responsibility to compete the project,” he noted.
The president added that the company only existed for six months and that he might regard it as “a transitional company” that enabled the administration to complete the project. He said that he is grateful for the company and the contributions made by citizens, who helped the government to reach its deadline and Guyanese are now the proud owners of a valuable asset. “I think a lot of Guyanese are proud of the asset, which we now possess. It belongs to the Guyanese people,” he said.
Addressing Roopnaraine’s role, Granger emphasised that he had committed no error and was only the representative on a company that was formally established. He added that the company’s establishment had not been concealed.
The establishment of the company was not publicly announced by government.
No payment to directors
Meanwhile, Patterson told Stabroek News on Wednesday that neither Roopnaraine nor any of other directors of the company collected financial or any other compensation for their roles. “None of the directors collected any monies for their roles,” he told Stabroek News.
Patterson explained that the special purpose company was set up in keeping with legal requirements, as was the case for other government projects, and he stressed that there was nothing sinister behind the move.
“This was a special purpose company, set up in a model done as in others, such as for the Indepen-dence Arch rehabilitation and so forth… and was for the purpose that accounts for donations made by citizens, that was the intention of the company,” Patterson said.
Patterson had disclosed the name of the company to the National Assembly on Monday but noted that when he did so it was impromptu and therefore he could not give an in-depth account for the whole project.
Patterson was speaking on a motion brought by PPP/C Member of Parliament Juan Edghill to have government inform the public about all aspects of the D’Urban Park Development Project.
Patterson told the House that in its first phase the project was managed by HDI, which was owned by L London, B Ram, G Miller and B Wilson. He also admitted that there were no records in the possession of the government of the donations and contributions made to the company. “I assume that this information would be in their statutory financial report,” he said when pressed.
The full names on the Articles of Incorporation for HDI are Lawrence (Larry) Wilson, Bobita Ram, Victor Wilson and Gentian Miller.
On Tuesday, the PPP/C held a press conference and announced that it had uncovered that Minister of Education Dr. Roopnaraine was listed as one of directors of HDI).
Opposition Leader Bharrat Jagdeo made it clear that his party believed that Patterson purposefully withheld information on the matter in House and it is currently analyzing the situation to determine if he should be sanctioned. “Rupert sat in Parliament and never said a word and Patterson never said his name…Patterson was trying to mislead the country again,” Jagdeo said.
“We are trying to establish whether this is a private company or a state company. If it is a private company, then there is no ground to take him before the committee. But if it was the state, then there is grounds to take him before the privileges committee,” he added.
Stabroek News contacted Roopnaraine who agreed to an interview yesterday, but later said that Patterson would speak on the matter. When Larry London was contacted he said, “I would suggest that you speak with Minister Patterson, he is in charge of that and he knows everything.”
Patterson on Wednesday said that while the PPP/C took issue with his not naming Roopnaraine, the opposition never asked for a list of the directors of the company during Monday’s sitting.
Patterson added that he understands that the opposition’s job is to make itself look good and it has its work to do. “The opposition will always do what they have to do, I guess. But as far as the ministry is concerned, we always have been forthright and honest with the House and every question we would have been asked, we provided answers for and that is a fact,” Patterson stressed.
Minister of State Joseph Harmon also addressed the issue yesterday and he said HDI could not have been established before works commenced at the site because works at D’Urban Park began with private citizens’ voluntary labour and materials.
He said that upon the APNU+AFC coalition assuming office, a National Commemoration Commis-sion (NCC) was established and among its tasks was to overlook works at D’Urban Park. “So that is how Dr. Roopnaraine became part of that company that was tasked specifically with the development of the facility. The company was registered in the deeds registry and that was notice to the world,” Harmon stated.
Removed from scrutiny
Stabroek News was told that The Companies Act of 1991 makes provision for a company to be used for a number of ventures. Sometimes companies choose a single financial transaction or bench venture and that is called a Special Purpose Vehicle or Company. There is no real difference in the form it takes from the general trading companies but the persons behind a particular company may limit its activities to the pursuit of one particular financial exercise as in this case the Independence Arch Restoration project or the D’Urban Park development.
It was explained by a government official that this avenue was also taken to isolate the persons overlooking the project from personal financial and other legal risks. All companies are required by law to disclose annually their audited financial operations.
But former Attorney General Anil Nandlall reasoned that while the law caters for Special Companies or Special Vehicle Companies, he believes that the corporate avenue of choice was to avoid scrutiny.
“The explanation given by the government for the incorporation of a limited liability private company and a finding to that company’s responsibilities and duties, which clearly dissolve upon the government, is hogwash. A government simply cannot alienate from itself intrinsic government responsibility, which is in this case infrastructural development. This is simply a mechanism, which the government has utilized, to shield this project from scrutiny, from transparency, and from accountability to which the government would have been subject, had the government undertook that work,” he said.
“Had the government undertaken the work, monies would have had to been secured from the National Assembly, the opposition would have had an opportunity and indeed the nation would have had an opportunity to know what was taken from the treasury and for what purpose it would have been spent. Secondly, the accounts of that company would have been subject to an audit of the Auditor General and would have been part of the Auditor General’s report, which would have been scrutinized by the Public Accounts Committee. Thirdly, the government would have been compelled, by law, to procure all the goods and services for this project, in accordance with the Procurement Act. That means there would have been public tendering etcetera. By assigning this task to a private company, the government has removed the project from these constitutional and legal mechanisms and devices established to scrutinize the expenditure of public funds or private funds on a state asset or a government project. It is my respectful view that this was specifically done to hide the transaction away from scrutiny and accountability,” he charged.
Nandlall pointed out that while government states that the project was donor funded and therefore did not necessitate use of state funds, it is still mandated by law to provide information on the business to the relevant authorities.
“We are saying that if it was a donor funded project that the Fiscal Management and Accountability Act mandates them to account for all private monies spent on a public project. The fact that private monies was used does not exempt it from scrutiny and accountability and then the Integrity Act makes it illegal and a criminal offence to accept donations and gifts over the value of $10,000. So, on no legal ground can the use of this private company be excused,” he posited.
Nandlall informed that he has evidence that several contractors are still owed monies for works undertaken on the project and that they are confused about to where to send their charges and litigation documents.
“These are contractors that were handpicked and given contracts without any resort to the procedures mandated by the Procurement Act. In my law practice, I have been consulted by one such contractor who is owed nearly $500M. To whom must he now go for his money? Should he go to the private company or should he sue the state? ” he questioned.
“The [Ministry of Public Infrastructure] said that they only spent $400M on the project when they took it over. This contractor is owed $500M. Clearly he did work for the private company and I know that the work that he did was prior to the ministry taking over. Should he now go against these directors? And what is worse, I also know of persons from whom donations were extracted and the president’s name was utilized when the donations were extracted,” he added.
He said that while some will compare HDI to Atlantic Hotel Inc (AHI), which his government set up to manage the Marriott Hotel, the two are different in that one was transparent and the other was not.
“When the AHI was formed, it was made public, its objectives were made public and all of its accounts are audited as part of NICIL’s accounts. So it is a very lame excuse to make a comparison AHI and this project. The nation knew of AHI from the inception and I remember. Here, we only know of this months after and only because we tabled a motion in the Parliament,” he said, while calling on the international community, the Transparency Institute and critics of his government to speak out on the matter.
Also criticizing the lack of transparency on the project was former president Donald Ramotar. “I think the government ought to come clean and clear the air on this situation. The plot seems to be getting thicker as time unfolds and the fact that they had set up a company so late after the project had started, seems to me that there is some of the cover up,” he told Stabroek News.
“Not only a lot of money, millions and millions and many construction material donations, would have passed through their hands, but there has been nothing but silence on its accounting and a dodging. That is reason for concern. Many business persons would have complained to me about being shaken down, in the name of donating to government by government officials, and many were scared to go public. The government needs to say how much it received in donations and what it was used for. It needs to say what the roles of the directors of this company were and how contractors for the project were chosen. It needs to say why they could not make public that a special company was created to overlook the operations and why that information had to be literally squeezed out of them. It seems to me, this was a major shake down, and the public needs answers and they need it fast. Rupert should also say something,” he added.