Development and accountability are not alternatives

Development and accountability are not alternatives


Sunday, May 06, 2012

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REGRETTABLY, the deepening dispute between the Government and the Office of the Contractor General (OCG) is being cast as a struggle between the urgency of economic development and job creation versus the need for probity and accountability in the award and monitoring of government contracts.

It is not. Both are absolutely essential. The Jamaican people have largely been deprived of both for most of the 50 years of political independence. We deserve better and, as we prepare to start the next 50 years of the national project, the people must demand that our leaders deliver on both counts.

The latest firestorm about government contracts and procurement rules was ignited on April 24 when Dr Omar Davies, minister of transport and works, told Parliament that the Portia Simpson Miller Administration would establish an Independent Oversight Panel (IOP) to oversee three major projects which the Government is banking on to deliver growth and jobs.

"...The contractor general has his role to play and there is no attempt to block him in doing that, but this is not simply about investigations and probing; it is a question of economic development," he said.

Dr Davies named an impeccable team of unquestioned credentials: Business mogul and former Government minister R Danny Williams, UWI principal Professor Gordon Shirley, and Everton McDonald, retired senior partner for the auditing firm PricewaterhouseCoopers. They don't come any better.

He said the team would "strengthen the existing monitoring framework" of three major infrastructure projects -- the North/South Link of Highway 2000 Project, the Gordon Cay Container Transshipment Hub and the Fort Augusta Container Terminal. It was not immediately clear how the team would work, what would be the extent of their authority, how long they would remain in place or how much their services would cost.

There can be no question that the Government is mandated to run the affairs of state or that the minister can name a panel of experts to help him in that task.

The question is whether, in the words of Contractor General Greg Christie, "the current Administration has deliberately circumvented the OCG, without firstly resolving the issues which were documented by it and, instead, has used the NCC and the creation of an Independent Oversight Panel (IOP) as a means to legitimise its circumvention of the OCG, whilst creating a facade of public transparency and accountability".

In his 12-page release, the contractor general seemed particularly offended by Dr Davies' assertion that the Administration would "not accept impotence as an option" and would not allow the OCG to be a stumbling block in the way of progress.

Jamaica has, over time, earned the unenviable ranking on the global index as one of the most corrupt countries on earth. The fact that Parliament thought it necessary to establish and empower the OCG was a clear indication that we can't go on in the same old ways for the simple reason that corruption increases the cost of doing business or delivering government services. The poorest citizens pay the highest price for corruption.

Mr Christie has interpreted his role as contractor general far more aggressively than any of his predecessors. He has been fearless, vocal and combative appearing at times as a lone evangelical crusader against corruption in high places.

For that he has earned the wrath of successive administrations. Indeed, the Bruce Golding Government circumvented the OCG by declaring that certain transactions regarding the Tourist Board, the Port Authority and the contracts for the post-Beijing celebrations were "market sensitive" and should not go through the normal procedures.

Dr Davies, himself not shy in proclaiming his righteousness, sounded almost 'Christian' in his defence of the panel as an oversight body: "We must shy away from the notion that there is only one person or office that can do that," according to an Observer report of the minister's appearance on the JIS programme, Issues and Answers.

And therein is the rub. Fact is that the OCG is the only commission established by Parliament as an anti-corruption agency with specific investigatory powers. Hence, the panel can advise the minister; they can help him to walk the straight and narrow even when tempted to 'run with it'; and, with their proven track records, they can insist on probity.

Government cannot empower the OCG and then dis-empower it by running end rings around the office. The only way to properly change the rules is to amend the law in an open and transparent process.

Questions requiring answers

Of course, the panel does not diminish or remove the investigative authority of the OCG and, if history is any guide, Mr Christie will demand answers from the Ministry of Transport and Works and Dr Davies will be in no position to redirect him to Professor Shirley and company.

In his statement to the media, the contractor general seemed particularly concerned about the North/South Link Highway 2000 Project.

This project has two components, namely (a) the construction of the entire Highway 2000 North/South corridor which is estimated to cost approximately US$600 million, with a commitment on the part of the intended contractor/investor, China Harbour Engineering Company (CHEC), to reimburse the GOJ with approximately US$120 million for the Mount Rosser leg of the corridor and, (b) a consequential 50-year toll road concession which is to be granted by the GOJ to the CHEC to enable it to recoup its capital investment.

This means that CHEC would be forking out US$720 to be recovered in toll fees over 50 years.

But the OCG produced evidence from a senior public official that the investment will not be recovered from toll fees within the contract period.

Mr Christie quotes Ivan Anderson, CEO of the Government agency responsible for the highway, as saying that the project is not viable in purely commercial terms. "We don't believe on a normal commercial scenario that the project will be able to stand on its own." The projected toll revenue will not come close to recouping the capital expenditure. The OCG raises several questions:

1. "Why is a commercially non-viable proposal being labelled and marketed by the GOJ to the people and taxpayers of Jamaica as a strict commercial transaction, when the GOJ knows full well that it does not meet the criteria of a commercially viable proposal?

2. "What benefit(s), whether current or future, does CHEC intend to ensure from the GOJ, or from the taxpayers and/or people of Jamaica, by undertaking what is a commercially non-viable transaction?

3. "Why is the GOJ unable or unwilling to disclose the full particulars of the non-viability of the transaction and to describe it for what it is -- an apparent gift to the people of Jamaica?

4. "How, when, and by what means will the Jamaican taxpayer pay back CHEC for its investment, since the present proposed 50-year concession at the projected toll rates are significantly incapable of doing so?

5. "Why are both the Government and certain members of the Opposition in a rush to have this suspicious and obviously highly irregular "investment" agreement consummated?"

The appointment of a high-level panel does not render these questions irrelevant. The answers should be forthcoming, especially against the background of the US$400-million Jamaica Development Infrastructure Programme (JDIP) contract to CHEC which was grossly mismanaged, according to Auditor General Pamela Munroe Ellis.

We will not know the full story until the country gets the results of two major ongoing investigations, one by the OCG and the other by a Government-commissioned forensic audit which is seeking to "determine whether there was any fraudulent transaction or acts of fraud".

Dr Davies would well remember the JDIP financial profligacy as he was (when in Opposition) the person who led the charge against waste and mismanagement. He could easily claim credit for Mike Henry and Patrick Wong losing their jobs over the controversy.

In this context, the minister might be well advised to heed Mr Christie's recommendation to have the OCG oversee and monitor the sub-contracts on the highway project. The implications of anything but probity and transparency in this regard cannot be overstated.

He should also be mindful that in political life there are no 'ends', just 'means'. What appears today as a desirable economic outcome is only as sustainable as the means by which you get to that stage, and the next, and the next, and the....

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