Controversy continues to plague NHT's purchase of failing tourist attraction

Outameni's $144-M Debt

Saturday, November 08, 2014





THE now controversial Outameni heritage attraction was drowning in debt amounting to just over $144 million for three years before the operators approached the National Housing Trust (NHT) to buy the loss-making entity.


The company, Orange Valley Holdings Ltd (OVHL), declared its indebtedness in its annual returns filed to the Registrar of Companies, copies of which were obtained by the Jamaica Observer.


According to the documents, OVHL's indebtedness in respect of all mortgages and charges stood at $141,100,000 at the time of filing on November 30, 2009. A year later the figure moved to $144,100,000 and remained there when the company filed again in November 2011.


A highly placed Government source confirmed to the Sunday Observer that OVHL approached the NHT about purchasing the property after first putting the idea to members of the Cabinet.


According to the source, OVHL director Lenbert 'Lennie' Little-White, at a meeting with NHT Chairman Easton Douglas in November 2012, had offered to act as a consultant to anyone whom the NHT had appointed to operate the entity, or to continue managing the attraction.


The sale, the Sunday Observer was told, was concluded in March last year.


Last week, the Jamaica Chamber of Commerce, Jamaica Manufacturers' Association and the Private Sector Organisation of Jamaica called on the Office of the Contractor General, and the Auditor General to investigate the NHT's decision to purchase the attraction for $180 million.


The private sector groups also questioned the NHT's plans to upgrade the facilities at a cost exceeding $100 million and to operate the attraction as a going concern.


The groups argued that, over the years, Outameni, which was owned by private sector interests, has proven to be a loss-making entity, despite repeated efforts to make it a profitable tourist attraction.


"It is questionable to now think that the Government, which generally has fewer management resources than the private sector, will now be able to bring the company to profitability. This will lead to continual losses accruing to the NHT," the private sector groups said.


They also questioned how this decision to purchase a private attraction can be reconciled with Government's stated policy of divestment of non-core assets, and called on the Government to explain this apparent contradiction.


Outameni is the brainchild of Little-White. Orange Valley Holdings, which is principally owned by Little-White and associated company Palm Productions Limited has investments in film and video production, tourism and other enterprises.


Other ordinary shareholders include Damali Little-White and Cheryl Ryman, while the National Investment Bank of Jamaica is listed in the November 2011 returns as a shareholder.


The NHT's purchase of the attraction, which sits on 10 acres near to Falmouth on Jamaica's north coast, has also drawn flak from the Opposition, which last Tuesday tabled six questions for Prime Minister Portia Simpson Miller to answer when the Parliament resumes this week.


The Office of the Prime Minister has responsibility for the NHT.


Opposition Leader Andrew Holness, who tabled the questions, asked whether any feasibility study or due diligence had been done, and when copies of those reports can be tabled in the House. He also asked for the name of the company from which the property was purchased and the names of its directors and shareholders.


Last Tuesday as well, Opposition spokesman on transport, water and infrastructure development, Dr Horace Chang, tabled a resolution seeking the firing of the current NHT board and its replacement.


Chang also raised the issue of the purchase being outside the statutory mandate of the NHT and said it was not permissible under the NHT Act.


Last Sunday, businessman Patrick Casserly, who is a member of the Jamaica Labour Party's (JLP's) Economic Advisory Council, blasted the purchase, saying it was a breach of legislation and that someone should be held accountable.


Casserly made the comments in an address to a fund-raising dinner for Juliet Cuthbert Flyn, the JLP's caretaker for West Rural St Andrew.


He explained that, under the NHT Act of 1979, the Trust was set up to develop housing for the people of Jamaica and nothing else.


Casserly pointed to 2005 when money from the Trust was used to fund education, but said this was only done through an amendment to the Act.


"Now fast-forward to today... so we bought, for $180 million, a near-defunct attraction in Trelawny, and the soft history of it, the grand lie of it, is that they would have us, the people of Jamaica, believe that they are going to build houses on it. That's some expensive land, it's only 10 acres, and we are going to go beyond that and spend another $111 million," he said.


Casserly said the recent explanation given by the NHT board "does not make sense", especially given their pronouncement that the Trust has 700 acres of land.


"So why are we buying land for $180 million?" he asked.


"I am not interested in why it happened, the point is it should not have happened," Casserly said, adding that there is a reason why Parliament sat and debated the Act.


 

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