FORMER managing director of the Housing Agency of Jamaica (HAJ) Dr Patrick Thelwell has come out with his side of the story surrounding the sudden termination of his contract, telling the Jamaica Observer he did nothing wrong and just wants to clear his name.

“My side of the story was that I did nothing wrong. I relied on the recommendations and the advice of my staff. There was nothing else I did,” the embattled former HAJ executive told the Business Observer.

Thelwell added that he discovered issues which were problematic in the organisation and presented them to the board in a report. He said the board then called for an internal audit and on receiving the audit, took the decision of asking him to leave. Thelwell was dismissed on Friday.

On Tuesday, Robert Morgan, minister without portfolio in the Office of the Prime Minister with responsibility for information, shed more light on the issues surrounding the dismissal of Thelwell, telling the Business Observer that while the former HAJ managing director was not fired for any impropriety, he is being made to take responsibility for “variations on certain contracts which the board was not made aware of, despite explicit requirements that all variations on HAJ projects must come to the board for approval.”

The issue he reasoned had more to do with Thelwell not having tight control on some of the things which were happening under his watch. He said Thelwell may not have even been aware of some of the variations before the internal audit.

“Some of the variations would have exposed the board and the Government to liability. We can’t allow the Government to be tied to something it did not agree to, and some of the variations required cabinet approval, but they were never taken to the board or cabinet,” Morgan continued.

He did not disclose the extent of the variations but it is said to run into the tens of millions of dollars and were related to at least two projects on which the HAJ is currently involved in to bring housing solutions to Jamaicans.

The minister, however, hinted that with the history of HAJ projects, in particular, projects implemented under Operation Pride in the PJ Patterson-led Administration in the early 2000s, the Government could not take the chance of seeing any other projects undertaken by the agency being plagued by similar problems of cost overruns.

He told the Business Observer that two people who were involved in the current projects which had the cost overruns have since resigned. The extent and nature of their role in the variations may be subjected to investigation, Morgan said.

Thelwell for his part was, however ,adamant, “I did nothing wrong and I want my name cleared.” He said he expects that in the process of further investigation, more light will be shed on the issues raised.

“The minister says he is not accusing me of any impropriety, but the buck stops with me. All I want is for my name to be cleared.”

Rising costs

Earlier in 2022, the former managing director disclosed that supply chain disruptions in the form of increased shipping costs and material pricing were challenging the ability of the HAJ to maintain housing unit prices at “tolerable” levels.

Thelwell told the Business Observer, “From the start of April 2020 through April 2021, lumber prices jumped 375 per cent. These changes, amongst other material cost increases, inevitably impact the local production cost of housing units. A further constraint on market activity has been the increase in cost of living and decrease in disposable income due to COVID-19 which has worked to reduce consumer buying power.”

Thelwell said then, to mitigate the increases the HAJ attempted to absorb the higher costs and upwardly adjust the prices of housing units, only if absolutely necessary.

But when pressed about what were raised in the internal audit, Thelwell told the Business Observer, “Those are for the board and for the management of the board. I am not seeking conflict. I am seeking to get my name cleared. All I can say to you is that the separation is because the board is saying that I am ultimately responsible for what happens under my watch,” confirming what Morgan told the Business Observer.

Since the termination of Thelwell’s contract, Doreen Prendergast, chief technical officer in the Ministry of Economic Growth and Job Creation, has been seconded to the agency as interim managing director.

Thelwell, a former general manager of the Jamaica Mortgage Bank (JMB), took the lead role at HAJ on July 1, 2021. He is a graduate of Baruch College (MBA) and the University of Phoenix (PhD).

He took charge of a government body which has had a history of long-standing problems posting losses year after year, alongside a tangle of underperformance.

The HAJ operates as a land and housing development company that provides shelter solutions for Jamaicans islandwide. It is wholly owned by the Government of Jamaica, and falls under the portfolio of the Ministry of Economic Growth and Job Creation (MEGJC).

HAJ’s core services include providing shelter solutions on the open market and upgrading and regularising informal settlement

The agency has revamped its business model in the last four years. In the past, it recorded revenue when properties were completed and sold. Sales revenue was augmented by mortgage collections and used to fund core operations, including development projects and the repayment of debt.

In 2019, however, the company exited the mortgage business when it sold its entire portfolio and used the funds arising to pay down debt.

Thelwell, in his tenure at the head of the HAJ, pivoted to the new way of doing business.

Early in his tenure, in August 2021 the former HAJ executive told the Observer, “HAJ is now solvent. The revised projected profitability for the end of 2021/2022 accounting year is estimated to be over $800 million.”

The executive said that the turnaround at the housing agency is built on three pillars: “revenue growth; cost containment; and debt reduction”.

Meanwhile, the agency was actively involved in eight projects, comprising 5,672 housing solutions with an estimated construction cost of $44.7 billion. Three of them, Catherine Estates, Edmund Ridge and Mona (serviced lots), were placed on the market at the start of 2021 for sale. Thelwell anticipated that the agency would realise improved liquidity and profitability this financial year and beyond.

HAJ Board

The current board of directors comprise Norman Brown (chairman), Sylvester Tulloch (vice-chairman), Steven Fong-Yee, Faye Hutchinson, Ian C Johnson, Robert Lawrence, Sonia McFarlane, Bishop Conrad Pitkin, Doreen Prendergast, Sean Shelton, Wayne Strachan, John Valentine, Toni-Kaye A Maduro, Seyon T Hanson, Kedon Clarke, Neresha Jackson, and Taj-Marie Osbourne.