Pradoville 2 lots went ‘for a steal’ – Henry Jeffrey

-says it was clear that state resources used for ‘regime and confederates’

Former PPP/C Housing Minister Dr Henry Jeffrey says that those who acquired lots at the Pradoville 2 housing scheme got them “for a steal” and he said it was clear that state resources were used by the then “regime and its confederates”.

The price at which the Pradoville 2 lots were obtained by former President Bharrat Jagdeo and a coterie of his former ministers and persons close to his government is presently the subject of an investigation by the Special Organised Crime Unit (SOCU).

Jeffrey’s statements in his March 22 `Future Notes’ column in Stabroek News will be seen as particularly damning as he had served for many years as a PPP/C minister and also in the housing portfolio.

Henry Jeffrey

Analysing the cost of the lots at the Pradoville 2 scheme at Sparendaam, East Coast Demerara, Jeffrey noted that the October 2015 audit of the government holding company, NICIL priced the 15 acres at Pradoville 2 at $1.242 billion or $82.8 million per acre, but the audit could not say precisely the number of lots into which the scheme was subdivided.

Jeffrey said that at least 10% of the land goes into infrastructure – roads, drains, etc. – which would leave 13.5 acres to be subdivided into lots. The scheme should thus comprise about 45 lots at 1/3 acre per lot and these lots would have to be set at prices to pay the development cost. When the infrastructure cost of $257 million for the scheme is added to the estimated land price, Jeffrey said that the total cost of the development would be close to $1.5 billion. Each lot he said would have cost just over $33 million, making them arguably the most expensive house lots ever placed on the market here.

He argued that if NICIL had proceeded with its original plan of building town houses, or if the government had decided to sell the land to a private contractor for housing development, the cost of $82.8 million per acre would have been prohibitive.

“In Guyana, the government price of land for housing is usually determined by its use rather than by strict market value. In 2010, when the project was being established, the price for housing land sold to private developers was about $5 million per acre. Thus, the 15 acres at Prado 2 would have cost $75 million”, Jeffrey asserted.

Contending  that there is sufficient information in the public domain to make the addition of $166 million for the relocation of the antenna, which had been at the Pradoville 2 site,  to the infrastructure cost extremely questionable, Jeffrey noted that former Auditor General Anand Goolsarran in his March 20th column in Stabroek News had also suggested that this cost could be removed without materially affecting the case on the price of the house lots. Jeffrey said that if the $166m was removed, the infrastructure cost for Pradoville 2 would then be $91 million. If this sum is then added to the cost of the land, the total cost of the development would be $166 million and the 45 lots would be about $3.7 million each. When the developer’s other expenditures and profit, about 50%, are factored in, the lots would fit into the private market cost of between $6 million to $8 million for similar type lots, Jeffrey said.

Jeffrey, who also served the PPP/C in the education and foreign trade portfolios,  said that his analysis has attempted to be as reasonable as possible, even if it made little of the process infractions having to do with double government allocations, sale of the lots before 10 years and the “extreme subjectivism” of the allocation process, etc. However, he said that with an average sale price of $1.5 million for 1/3 acre of a fully infrastructured high income house lot, it is clear that state resources were utilised to benefit the regime and its confederates.

“What must be even most disheartening to all of those who claim allegiance to Cheddi Jagan’s legacy, is that the price of $1.5 million does not even cover the cost of the virgin land! At $5 million per acre the 15 acres would have cost $75 million, which, if divided by 45 lots, would have given a cost of approximately $1.7 million per lot without any infrastructure.

“Ultimately, illegality is for the courts to determine. However, from a moral standpoint, given the status of most, if not all, of those who were allotted lands in Prado 2, it would be impossible for any one of them to convince me that when they agreed to pay about $1.5 million for a fully infrastructured 1/3 acre upper-income house lot they did not know that they were getting a steal!”, Jeffrey charged.

SOCU’s arrest of Jagdeo and former Head of the Presidential Secretariat, Dr Roger Luncheon and the questioning of others galvanised public attention earlier this month. Since the questioning by SOCU there has been no further development.

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