Montague says no rules breached by his ministry in car import saga

Senior staff reporter

Wednesday, December 06, 2017

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National Security Minister Robert Montague finally found his voice on the raging controversy over the effort to import 200 pre-owned motor vehicles for the Jamaica Constabulary Force (JCF), saying that no procurement rules have been breached by his ministry.

Montague's defence came in a statement to the House of Representatives yesterday responding to questions raised by the Opposition about the delay in the importation of the full complement of vehicles, and the failure of the contractor, O'Briens International Car Sales and Rentals Limited, to pay the special and general consumption taxes owed on the first 96 vehicles already in the island.

O'Briens International has handed over only 30 of the first 100 vehicles it was paid $200 million in January to import. But it has bought another 66 vehicles which are still holed up on Kingston Wharf awaiting payment of $17 million in outstanding general and special consumption taxes.

Montague informed the House that if and when the 200 vehicles are brought in by O'Briens, the ministry is able to pay the full $34 million in taxes out of a $42 million performance bond posted by the contractor.

“So any lack of performance will not place the taxpayers at any risk. At no time will the people of Jamaica suffer any financial loss,” he stated.

The Ministry of National Security collected the performance bond, as a term of the contract agreement, prior to its refusal to accept a request from O'Briens that the State shoulders the $34-million tax charges on the importation of the full 200 vehicles.

Montague also pointed out that the committee which assessed the bids felt that it would not be in the interest of the ministry to award the contracts for all 200 vehicles to one bidder. However, he said that the National Contracts Committee recommended that the contract be awarded to one supplier.

Montague explained that there was nothing wrong with the extension given to the company until November 24 this year.

“From the opening day of this contract, as per the Government of Jamaica's procurement rules, the OCG (Office of the Contractor General) has been kept abreast of all activities pertaining to this contract in a timely manner and, up until yesterday, the permanent secretary (in the ministry) had dialogue with the contractor general,” the minister told the House of Representatives.

“I have in my possession an exchange of letters between the OCG and the ministry (of national security) over the period September 19, 2016 to November 2, 2017 providing updates on the procurement process,” he said, as he pointed to slides which he had brought to Parliament and which were being shown on television screens inside the chamber.

“Let it be known that this minister will not breach any of the Government of Jamaica procurement guidelines,” he said.

Montague said that, in summary, the policy will continue; the 66 vehicles on the wharf are getting priority attention; the police are more mobile than they were in previous years; the procurement processes will continue to be observed and adhered to; and the people of Jamaica will not be at a financial disadvantage as a result of the matter.

However, he noted there is a possibility of court action against his ministry, as Clause 16.3 of the contract states that:

“If any tax exemptions, reductions, allowances or privileges may be available to the supplier (O'Briens) in the procuring entity's country, the procuring entity shall use its best efforts to enable the supplier to benefit from any such tax savings to the maximum allowable extent,” the minister said. “With this in mind, the ministry did its due diligence in honouring the contract. This was in anticipation of this matter going to court. We wanted to dot every 'I' and cross every 'T'.”

He said, however, that his ministry had written to the Ministry of Finance and the Public Service requesting a waiver of the taxes imposed on the vehicles. The request was denied.

He said that following that decision, his ministry wrote to O'Briens and demanded that the vehicles be delivered no later than November 24. But, on November 23, Parliament summoned the ministry's executive to appear at a meeting of its Public Administration and Appropriations Committee (PAAC).

The ministry then decided to cease all actions pertaining to the contract, pending the appearance before the PAAC.

The ministry officials eventually appeared before the committee on November 29, when the matter was made public and, on November 30 the ministry wrote to the solicitor general.

The ministry, he said, called the $42 million performance bond on December 1.

Following his presentation, Montague was asked a number of questions by Opposition MPs, but responded in reference to what he had said in the statement.




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