PNP back on the land issue, but we can't forget Operation 'SHAME'

Garfield Higgins

Sunday, February 18, 2018

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Naked truth needs no shift. — William Penn

Operation PRIDE, Operation PRIDE, Operation PRIDE, I have received several questions about Operation PRIDE since my Agenda column last Sunday. Some of the e-mail indicated that folks had never even heard the name 'Angus Report' before. It would be a great travesty, if the key findings of the Erwin Angus report into the operations of the National Housing Development Corporation Limited and Operation PRIDE were to disappear into soundbite history.

What was Operation PRIDE? Former Prime Minister P J Patterson launched the Programme for Resettlement and Integrated Development Enterprise (PRIDE) in May 1994. Patterson said three major challenges necessitated the establishment of Operation PRIDE:

(i) social strains and pressures of the previous two decades;

(ii) absence of an adequate settlement policy; and

(iii) indiscriminate squatting and capturing of government and privately owned land ( The Gleaner, June 18, 1997).

Intent versus actions

The People's National Party (PNP), consistent with its socialist dogma, has a fixation with the redistribution of finite resources, in particular land. In the 1970s, Michael Manley championed the ill-fated Land Lease and Nyerere Farms distractions. In the 1990s, Patterson established the Operation PRIDE fiasco. Some in the PNP sold Operation PRIDE as the panacea to squatting and related worries.

Three weeks ago Peter Philips, leader of Her Majesty's Loyal Opposition, said: “Land distribution is at the heart of Jamaica's problems.” There is no doubt in the collective view of the shadow Cabinet that this problem of the unequal distribution of land, which has existed from 1838 'til now, 180 years, has been at the heart of much of the social and economic inequality in the country.” ( The Gleaner, January 29, 2018)

The PNP has formed the Government for 22 of the last 28 years, why did it not solve this problem? The obsession of 89 Old Hope Road with the redistribution of finite resources largely explains why they have never been successful at creating meaningful and sustained economic growth. They just don't get it!

Researcher Jimmy Tindigarukayo, in a paper entitled 'A programme for housing the poor in Jamaica', said, among other things: “The Government of Jamaica initiated Operation PRIDE as a unique method of making land legally accessible to low-income groups at affordable prices through some government subsidies. The beneficiaries, on their part, are required to save and to deposit their money in their respective building societies, commonly known as provident societies. These savings are then utilised to pay legal costs and to develop the required infrastructure.”

Where did it all go awfully wrong? The Angus Report is veritably open sesame on the question: “Patterson named Erwin Angus, a retired civil servant, to head the probe because of the public relations battering his Administration was taking after the leaking of an internal document indicating that overruns on (Operation) PRIDE projects could top $5 billion, and suggesting that favoured contractors got most of the jobs.” ( Jamaica Observer, April 12, 2002)

At the time of the appointment Patterson said among other things: “I [am] instructing that a report be made available to me in accordance with the terms and reference within six weeks. Then let the chips fall where they may.” ( Jamaica Observer, February 18, 2002)

These are some of the key findings of the Angus Report:

The commission said it received several corroborating statements during the period of consultations and interviews from varying stakeholders in the Operation PRIDE process.

• All projects were transferred to the National Housing Development Corporation (NHDC) in 1998. The NHDC realised that it did not have the financial and technical capacity to deal simultaneously with all of them. So a proposal was made, which the Cabinet approved, not to pursue all of them. Cabinet approved a focus on a priority of 20 projects; the remaining 91 to be deferred for completion over a four-year period. However, if the relevant Independent Provident Societies (IPS) made sufficient contributions, the NHDC would help through financial contributions to cover the costs of planning and designs, but not construction. No NHDC-funded construction took place on those projects during the period 1998 to early 2000.

• Contract sums are based on anticipated expenditure. Deposits are not taken into account in determining loan sum. Deposits are treated as advances against payback to the NHDC for loans granted.

• The NHDC Accounts Department did not believe that the checking for regulatory approvals, meeting loan agreement conditions, etc, was part of its function. The department looked for payments in excess of contract sums, missing signatures, etc, and flagged those things for follow-up with requests for explanation and/or rectification prior to disbursement.

• Although on the face of it the NHDC is in charge of Operation PRIDE, most decisions were externalised to the Ministry of Water and Housing. Caribbean Engineering Corporation Limited (CECL) “directed traffic” in a major way and Evon Robinson usually decided who got what work, when it started, etc. At any given moment the NHDC may be presented with bills for payment. The programme seemed to have used the “rapid response” mode as an excuse to begin work without proper documentation and controls.

• If payments exceeded contract sum, CECL simply instructed the Legal Department to revise upwards the contract sum and the loan agreement without any of the proper controls, checks and balances. On one of the St Ann projects (Belle Air), CECL said it instructed a change in contract sum/loan agreement because the Ministry of Water and Housing needed water to get to a particular community, and so it used this project to get it done.

• At handover time, the NHDC looked at the full cost of the project and realised that lots were two to three times more costly than comparable National Housing Trust developments, and that prices were out of reach of target markets. This realisation usually ended in a ministerial subsidy to bring the selling price back down to reasonable levels, and the NHDC suffered that loss. Subsidies flow from the minister's removal of land, administrative, water and/or sewerage costs from the total project costs to come up with a final selling price. In 2001, subsidies were in excess of $800 million.

• Payments were made on the Barrett Hall project in the absence of required contractual agreements.

• Bills of quantities are blank or incomplete on many projects, and contracts undervalued.

• In most cases, when the first indication of pricing occurred, drawings, surveys and designs are not yet complete. As a result project costs will exceed contract sums.

• Lot pricing strategies include a standard price of $460,000 per lot, irrespective of considerations such as terrain, which can cause significant price increases.

• In many instances, pressure to make payment to contractors came directly from the minister of water and housing.

• The mortgage department was primarily idle, while NHDC paid Daly, Thwaites and Company to do the work. In one instance, when it became clear to NHDC that Daly, Thwaites and Company was collecting monies from the IPS and NHDC for the same work, the accounts department was instructed to withhold payment. However, payment was subsequently released on the instruction of the chairman of the board. In another instance, Daly, Thwaites was reportedly found to have submitted in error invoices for work for which the company had previously been paid. However, this was discovered after duplicate payment had been effected, and Daly, Thwaites agreed to work without payment in respect of the repayment owed to NHDC. Daly, Thwaites was reportedly terminated by NHDC, but subsequently exonerated and reinstated at the instruction of the chairman of the board.

• There is a “brotherhood” or on-the-ground network of communication among the IPS that facilitates the PRIDE operation. The NHDC's Technical Service Department was not accepted as part of the communication network, but Evon Robinson's group — having become familiar through on-site representation — was part of that network and gained the trust of the IPS. The Government must have that kind of foothold on the ground or the programme will not work.

• Direction came from the ministry as to who should get paid, how much and when.

• “Beneficiaries” got no benefit when they could not afford the high selling prices, even after subsidy. Therefore, the lots went to the open market for sale. Even if full recovery were to be made on the open market, this was not the purpose of Operation PRIDE.

• Contractors gave money to provident societies to ensure that they used their services. (Adapted from the Angus Report, pp 57-59)

Feet to the fire

The then Opposition Jamaica Labour Party (JLP), led by Edward Seaga, held a number of news conferences and delivered some frightening revelations. On February 15, 2002, for example: the JLP revealed that, “10 projects — Pleasant Heights, Portmore Villa, Retirement II, Riverton Phase II, St Benedict's Heights, Shaw Park I, Shaw Park II, Wentworth Development, Whitehall II, and Whitehouse — had a total contract value of $1.7 billion. He said that nine of them were behind schedule and the amount of money spent to date is $1.85 billion — a total of $150 million over the contracted sum.”

“The actual cost of these projects is projected (at) $7.2 billion, an overrun of $5.5 billion, Seaga told journalists at the JLP's headquarters in New Kingston. The Jamaica Labour Party leader also demanded that all 100 PRIDE projects undergo a full review by the auditor general, and that the 10 projects that have faced significant cost overruns be probed by independent auditors and the fraud squad.” ( Jamaica Observer, February 16, 2002)

Karl Blythe, the responsible minister, said his hands were clean. He “responded to the Opposition's charges, saying that while there were some shortcomings in the financial management of the NHDC, there was no widespread corruption at the State agency”. ( Jamaica Observer, February 16, 2002)

Blythe resigned as the water and housing minister in April 2002. He maintained that his hands were clean and that the Angus report was flawed.

Ronald Thwaites publicly stated that what the Angus Report said about Daly, Thwaites was incorrect.

Patterson remained resolute in his defence of Operation PRIDE. According to him, “However they try to discredit Operation PRIDE, however they try to conceal its successes, however they try to destroy it purposely, no one can deny that Operation PRIDE has altered, for the better, the landscape of our entire nation and has provided the opportunity for residential development and landownership to the landless people in Jamaica.” ( Jamaica Observer, February 24, 2006)

Patterson also defended Dr Karl Blythe's stewardship of the Operation PRIDE programme, which had resulted in Blythe's departure from his Cabinet in 2002: “Whether it has anything to do with Saturday or not with Saturday, I think that I owe it once again to say that the minister who was responsible for water and housing, and particularly for Operation Pride, was guilty of no act of corruption.” ( Jamaica Observer, February 24, 2006)

Report on the report

An interrogation of the Angus Report, conducted by Ambassador Dr Kenneth Rattray, accused the Angus team of:

• failing to carry out a rigorous and in-depth examination of the facts, including documents, before arriving at its conclusions;

• basing its conclusions on assertions which amounted to hearsay;

• arriving at conclusions without providing Blythe with an opportunity to challenge those conclusions;

• failing to adequately identify and separate the periods during which alleged deficiencies existed, particularly in arriving at findings and conclusions relating to Blythe; and

• failing to recognise the special position of the minister responsible for housing under the Housing Act as a corporation sole in relation to Operation PRIDE.

The contents of the Rattray Report on the Angus Report were released two months after a general election. After the release of the Rattray Report in December 2002, Blythe demanded an apology from the Angus team and said he would sue them if they didn't.

Rattray died in January 2005. He was, at the time, a special adviser to the Cabinet.

The Rattray Report was overwhelmingly viewed with scepticism. A Gleaner editorial, entitled 'A heavy coating of whitewash', said among other things: “The Angus Report found mismanagement, corruption and ministerial overreach in the (PRIDE) scheme. The effect of Rattray's review, commissioned by the then Patterson Administration, and couched in legal language, was to impeach key elements of Angus's findings and provide cover for some of the key actors in Operation PRIDE.” ( The Gleaner, August 10, 2017)

A Gleaner editorial made these among other comments: “Dr Blythe, the former minister, had always insisted that the provident societies were independent, autonomous bodies which selected the contractors that they wished to do the construction on their Operation PRIDE projects. We now learn from the Angus Commission that this much-vaunted independence was a sham, as the contractors paid the provident societies to ensure their selection. So much went wrong in Operation PRIDE, and there was such wholesale corruption of processes that not only must everything be done to get to the bottom of what happened, but those who are culpable must be brought to book and safeguards put in place to ensure that it will never happen again.” ( The Gleaner, April 20, 2012, 'And now, what next?')

Jamaica's best days are ahead. I am betting on Jamaica, full stop!

Truth is incontrovertible. Panic may resent it, ignorance may deride it, malice may distort it, but there it is. — Winston Churchill

Garfield Higgins is an educator; journalist; and advisor to the minister of education, youth and information. Send comments to the Observer or




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