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OCG de-bushing report — JLP Government corruption, recommended solutions to re-build trust

Dr Peter Phillips

Sunday, July 16, 2017

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The following is the presentation made by Opposition leader, Dr Peter Phillips at a press conference on Thursday July 13 regarding the report on de-bushing by the Office of the Contractor General (OCG).

W e had expected that Prime Minister, Andrew Holness would have made a statement on the recent damning OCG report on the de-bushing programme on Tuesday, July 11 as had been implied by the minister of information. There has been no such statement – and the matter is of such fundamental importance to the country that we feel compelled to call this press conference, especially subsequent to the OCG report, development in relation to the telephone bills and sand mining, have highlighted the challenges in corruption and good governance that the country faces.

This much has been acknowledged by the Political Ombudsman letter to the Prime Minister on July 10, 2017 and NIA and other public commentary.

And we should bear in mind that this comes against the backdrop of Jamaica falling 13 places in the corruption index of the Transparency International report over the past year.

What the OCG report highlights are:

Breaches of procurement laws and guidelines of GOJ

Breaches of the Code of Conduct particularly highlighted by the Political Ombudsman in her letter to the Prime Minister of Monday, July 10th, 2017

Further implied breaches of standard of good governance

Let us recount the relevant timelines:

November 3, 2016 – announcement of local government elections

November 16, 2016 – National Works Agency (NWA), the implementing agency, is advised of a Cabinet decision to implement the programme for a total value of Six hundred and six million dollars ($606,000,000.00) and to engage specifically named contractors

November 18, 2016 – NWA executes agreements with five contractors and work commences immediately after

November 28, 2016 – Local Government Elections are held

The OCG was clear on the following:

The Cabinet of Jamaica, at a time when flood repairs were in needed in eastern Jamaica, breached the guidelines of the OCG Act by not awarding contracts impartially or on merit.

There were clear breaches by the Cabinet when they awarded contracts in the amount of $606 million after Nomination Day.

Five contractors were selected by the Cabinet as were the areas of work – selected by the Cabinet. There was an additional contractor where instructions were transmitted by Minister Horace Chang directly. This was irregular.

Interestingly these were all road contractors but contractors qualified for sanitation and drainage clearing were not selected.

NCC was not informed until December 28, 2016 long after contracts had been distributed.

The OCG report further states:

The work was substandard and not well done (see para 21)

debris was not cleared as was required by the contracts

debris burned in some cases as was prohibited specifically by the contracts

No joint inspection by NWA and company representatives was done as is usually the norm (Para 27)

The usual payment procedures were not followed

Payment vouchers not signed by the usual persons

Sub-contractors were settled by only JLP MPs and Cabinet members as outlined in OCG report.

The whole thing was done in haste 11 days between draft cabinet submission and notification for contractors to proceed on November 18. What was the emergency? There was no sudden development or emergency as required by the guidelines.

Profit margins for the contractors selected by the JLP Cabinet were in excess of the usual standard 15%. In one case, the profit margin was 76.44%!

In the context of the unprecedented nature of the programme and an abnormally high profit margin of 76.44% for the contractor which received the highest value contract, one must question the motives of all involved in this programme.

The contract with the highest value was for $183,600,000.00 of which $176,951,302.00 was actually disbursed. Based on the OCG's conclusion, the profit margin from that contract would be $135,261,575. The question must be asked – how can the Holness Administration justify one contractor who was specially selected by its Cabinet receiving profits of $135.2M from payments of $176.9M?

In summary, there is an unfortunate pattern of behavior that is evident in the conduct of the JLP administration.

What we see is their increasing use of public resources for private purposes.

This is evident in:

The $606 million de-bushing programme which used taxpayers money for the political purpose of the JLP and which was likely a breach of the Code of Political Conduct

It is evident that also in the recently revealed benefits secured by a senior Cabinet minister under a programme for Dairy Farmers that was administered by his Ministry – The Mombasa Grass issue

We see it in the recent phone bill scandal which is currently being played out.

We see it also in the over-ruling of the National Environmental and Protection Agency (NEPA) recommendations re: the sand-mining in Duncan's for the benefit of a former JLP candidate

Especially in light of the scandalous conduct of the current JLP Administration, we need to restore public confidence in the standards of governance in the country.

Indeed, in May we wrote to the Prime Minister suggesting the establishment of a National Oversight Committee to ensure non-partisanship in the implementation of major infrastructure programmes (specifically in that case a national flood mitigation).

We have not received a reply. Nevertheless, we are going to again outline some specific demands on behalf of the public to ensure that such breaches as were evident in this programme never recur.

We support the recommendation from the Political Ombudsman in relation to the road work programme valued at $3 billion that there be regular reports by the NWA to the Parliament.

Indeed, we would insist that a national stakeholder group review the selection process for this $3b works programme which is being implemented primarily in JLP held constituencies.

Of the 26 constituencies, 24 are represented by the JLP and have a value of $2.8 billion, and two constituencies with a value of $190m are represented by the PNP.

It is obvious in the case of the de-bushing programme that the provisions for emergency procurement were deliberately exploited and misused.

There was no emergency other than “the politically conceived emergency of the Jamaica Labour Party in the Local Government Elections”.

Emergency procurement rules were intended to take account of circumstances such as flood, hurricane, earthquake etc which need rapid and immediate response

This was obviously not the case here.

Accordingly, we insist that the procurement guidelines, regulations and laws need to be amended to require that all emergency procurement initiatives be reported to the Parliament at the earliest possible time, including a statement as to the areas of the emergency that requires the intervention.

All such emergency work should be shared amongst all registered contractors for transparency and fairness, and not a limited number, so they can all bid fairly as those contractors have the capacity.

In addition, based on the OCG report there are people clearly in breach. We are insisting penalties need to be applied and where they occupy pubic positions (boards etc), they should be removed as this is a breach of public trust.

These proposals would represent for us in the PNP an essential element in the improved governance structures which the country which the country so urgently needs if we are to restore public trust in nationhood and the political process. There are other elements that will form part of the proposals that we are developing and which we will present at a later date.

Nevertheless, we are insisting now that the JLP Government undertakes the corrective measure.

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