Business

HAJ turnaround continues as $700m in profits expected

BY KARENA BENNETT
Business reporter
bennettk@jamaicaobserver.com

Wednesday, December 20, 2017

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Chairman of the Housing Agency of Jamaica (HAJ), Norman Brown, is predicting profitability in excess of $700 million for the fiscal year 2017/18, further supporting statements earlier this year that the agency is in a far better position since the appointment of new management in April 2016.

“I'm being very conservative. The final outturn might be a surprise. We have a very capable team there led by our Managing Director Gary Howell,” Brown told the Jamaica Observer during a round-table interview last Friday.

Brown said since his return to office in 2016, he has been working to recover capital from incomplete projects started four to five years ago. Established to provide low-income housing solutions for Jamaicans, the agency had reported losses for the three years up to 2016, which led to the dismissal of five senior managers who were reportedly accused of gross mismanagement at the government entity.

“We came in at the end of the financial year and found a loss of $863 million. The first thing we did was to formulate a plan to complete these projects, bring them to books and realise the investment on them. So far we have completed 90 per cent of those projects and we have been able in 2016/17 to realise a profit of $183 million before tax,” Brown reasoned.

The entity partners with the National Housing Trust to provide financing for individuals seeking to purchase solutions from the HAJ as well as funding other developments.

For the fiscal year 2016/17, HAJ placed on hold all the housing starts while delivering 80 housing solutions that were delayed a year earlier and delivered 607 titles for the fiscal year. However, it is 44 per cent lower than the number of titles issued for the fiscal year 2015/16.

The chairman outlined a total of 1,866 construction starts in 10 communities across Jamaica for fiscal year 2018/19, to include the development of a signature multi-billion-dollar project in Kingston.

Last year, a special commission under directive of Prime Minister Andrew Holness had proposed the merger of the HAJ with the NHT to improve the efficiency of the entity. Holness said the report fits the mandate of the Government to improve the NHT's capacity to provide affordable housing solution for Jamaicans. To date, no decision has been taken on the actual merger of the entities.

Brown noted that while the HAJ has its own opinion on the matter, it does not want to posit a view prior to an announcement by the prime minister.

However, former chairman of the National Housing Trust, Easton Douglas, reportedly opposed the merger, noting that “the HAJ has not made a profit for a considerable period of time and that the agency's employment practices have also not always been helpful to its efficiency.”

Douglas said the agency remains indebted to the NHT”.

But Brown, in defending his stewardship, said when his board took office, debt to the National Housing Trust (NHT) was $3.05 billion, but up to March debt stood at $2.73 billion, having paid over to the NHT some $410 million. He noted that these are old debts which were mainly related to Operation Pride schemes and open-market units.

The chairman added that part of the profits the agency made over the last three financial years have gone into infrastructure projects and other works for the well-being of the citizens. Among the recent projects are drain cleaning and regularisation of electricity in Whitehall, Westmoreland. The agency has also upgraded dirt tracks to paved roads in Copperwood and Red Ground in St James.

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