CDA’s ‘enormous’ $118M debt

The Chaguaramas Development Authority (CDA) has an “enormous debt” of approximately $118 million and is in receipt of numerous filed court matters and pre-action protocols for breach of contract, having failed to pay contractors and suppliers, according to the chairman’s report for 2016-2017.

In the report from outgoing CDA chairman Narine Gupte Lutchmedial, for August 2016 - September 2017, the record from the CDA’s financial and accounting department reflected a debt of approximately $80 million. He said, however, there were discrepancies and an organisation-wide audit was done to ascertain the true debt.

During the exercise non-submission or tardy submission of original invoices affected the department’s ability to calculate the true debt, but it was estimated at approximately $118 million.

Lutchmedial said it would appear that the previous administrative (sic) was incurring expenses monthly and not paying for them, and as a result the CDA was left with an enormous debt.

He reported the CDA had received numerous filed court matters and pre-action protocol letters for breach of contract for failing to pay contractors and suppliers, but the acting general manager and the legal department, he said, were working continuously to resolve these matters amiably without incurring further legal cost.

Lutchmedial said the CDA had been aggressively reaching out to its debtors with payment schedules for repaying outstanding debts. “This has avoided possible litigations as well as allowed for greater management of the authority’s limited revenue,” he explained. He said because of concerns about requisite approvals to be obtained for the current organisational structure, a special meeting was held on March 9, 2017 and a manpower audit approved.

By contract dated April 6, 2017 the CDA entered into a contract with Eastman and Associates Ltd to do the manpower audit. A report was submitted on June 14, 2017 and the board, having reviewed the proposed organisational structure in the audit report, requested certain amendments.

“It is noted that the board requested that thorough searches and investigations be conducted to determine whether the current organisational structure at the CDA was duly approved in accordance with the relevant statutory and policy requirements. No evidence was found of such approval. The board therefore determined that it would revert to some of the positions in the original structure which had been duly approved for the CDA.”

Lutchmedial said after further consideration of the report, the board chose to implement it in phases with Eastman and Associates Ltd.

He reported expenditure was reduced by 52 per cent from 2015 to 2017 and with the implementation of cost-cutting initiatives, operational cost in 2016 was reduced by 44 per cent as compared to expenditure for the financial year 2015. He said the operational cost continued to improve and showed a further reduction by 14 per cent as compared to financial year 2016.

He reported the monthly expenditure in September 2015 was $7,390,332, whereas the monthly expenditure in September 2017 was estimated at $3,353,250.