Published Thursday 26th June, 2008

After the drama in our House of Representatives on May 23, culminating in the Prime Minister’s announcement of a Commission of Enquiry into the construction sector, it seems that we are going to see some movement on that front this week.

We have already stated our opinion that the scope outlined for that Commission of Enquiry is so wide as to make definitive solutions elusive.

“We hope that at the end of the day, truth will prevail and that Trinidad and Tobago will have a new system of operation in the construction sector,” Manning said, “and that we will move inexorably on to the achievement of developed country status by the year 2020.”

The Prime Minister also said on that day that, “Today for the first time, someone got up in this House and made a clear and specific allegation, as a consequence of which I am authorised by the Government to announce the establishment of a Commission of Enquiry into the construction industry.” It is interesting to note that, as serious as those allegations were, they have not been repeated outside the cloak of Parliamentary immunity.

This seems to be a useful point at which to start.

The late Lloyd Best urged us, if we are serious about making progress, to have the willpower to ignore things which were interesting or true and focus on those aspects which are decisive.

There are other aspects of the Udecott situation which would have formed a natural part of this series at this stage. This week, however, we put those aside to set out what are, in our opinion, the decisive aspects of this important public question. We are doing so with neither cloak of immunity nor party political agenda.

While we are sure that the concerns of the Joint Consultative Council of the Construction Industry (JCC), Transparency International and the other civic groups are solid and deserving of full enquiry, the simple fact is that they are secondary. What is the true order of things in the State-sponsored large-scale construction arena?

The primary step is the investment decision and notwithstanding the prime minister’s statement on May 13, that remains a mystery. In my view, as outlined last week, it is even more mysterious than before.

Let us be clear, without an investment decision, there is no building to design, contract to tender or anything. Despite all the talk, we are all unclear as to what guides our major investment decisions. I am including myself in this and it would seem, from the baseless and confused statements emerging from it, that some key members of the Cabinet are equally unclear.

After the last “oil boom” the late Jamaican prime minister, Michael Manley, was said to have stated that “…the oil money pass through Trinidad like a dose of salts.” To be sure, that remark cut deep into our national pride but we are also aware that it carries some truth.

The benefit of a set of investment guidelines is that it imposes a useful discipline on all the participants in the development process. We must establish required rates of return for commercial projects and approve only those which surpass these. By so doing, we are given a series of thresholds within which project costs, quality and timing can be weighed against returns. Those are the tools of the professional project facilitator, as Udecott claims to be.

Without those yardsticks, we are in uncharted territory which no prudent banker could endorse.

As we have been clearly stating for some time now, none of the Udecott-facilitated office projects in our capital are viable. None. The sidebar deals again with that sobering reality.

That, Mr PM, seems to me to be a matter deserving of the most serious, public enquiry.

The National Insurance Board (NIB) owns a large site at Queen’s Park East, between Belmont Circular and Cadiz Roads. We know that it has for some time been considering various large-scale development options by conducting studies of the market for and viability of those options. In our view that is the right and proper process in cases of such large-scale, long-term investments.

As far as the investment decision is concerned, I am comfortable with the manner in which NIB funds, our national savings, are being handled.

The unsettling question is: if the NIB knows the right and proper process, what is the deficit in the Cabinet? Please remember that this is a Cabinet whose Finance Committee reviewed the financial implications of projects. What, if anything, have we learned from the errors of the 1970s? Sad to say, but it appears that the highest councils of our republic are deeply dysfunctional.

To repeat a point we made earlier, the new Piarco airport terminal was a $1.6 billion project but these office projects in our capital are costing in excess of $5 billion.

Either the Cabinet or its advisers are responsible. We are either dealing with a lack of rectitude at the highest level of our republic or a sobering naivete. Our Prime Minister and other ministers repeatedly told the public, as justification, that we would be saving money with these ambitious office projects. That statement is no longer heard. So what, if anything, is the justification for these projects?

That too, Mr PM, seems to me to be a matter deserving of the most serious, public enquiry.

We close by rededicating ourselves to the attainment of national development. We are sure that there are no short-cuts. The nation does not need any Bob Lindquist or foreign experts to settle these questions.

At this time, we need leadership possessing the values and courage to focus on what is decisive. I am including the JCC, Transparency International et al, in that call for national leadership on this question.

Look beyond the partisan interests of your membership. Either we possess the will and the wit to do so for ourselves or is another “dose of salts” for everybody.

The viability gap

Last week, I received a number of calls from concerned readers, one of whom pointed out that a decision to stop renting offices and move into one’s own architect-designed and high-quality space was a positive one.

Again, let us reply by pointing out that if that were all, we would not be critical of those moves. The inescapable fact is that if we use the figures set out in our earlier columns, the State is doing these projects at a cost of $30 per sq ft a month and the space can only be rented for $15 per sq ft a month.

However, you spin it, this is nothing less than a national scandal. All this from the Udecott, whose core values are described on their Web site as being:

Core values

l        Value for money

l        Involvement

l        Confidence

l        Accountability

l        Performance

l        Professionalism

Afra Raymond is a director of Raymond & Pierre Limited. Feedback can be directed to afra@raymondandpierre.com.