WHAT is wrong with a half-a-billion dollar contract signed between the Housing Development Corporation (HDC) and Chinese firm China Gezhouba Group International Engineering Co Ltd (CGGC), for the construction of 5,000 homes?
The answer to this question will be given by the relevant authorities in due course, the government says.
Revelation of the scrapping of the contract came from the Prime Minister on September 5 at the post-Cabinet media briefing. Dr Rowley said then that the HDC would be restarting the tender process for the housing units.
“HDC has been instructed to go back out to tender, because there were some parts of that contract which did not meet the Cabinet’s acceptance and approval, structurally and legalistically," Rowley said. “So that contract has been stopped. We are not going forward with it in the way in which it was produced.”
But who negotiated the contract and what were the issues that did not meet the Cabinet’s approval, leading to its termination? This was the gist of a list of questions Sunday Newsday sent to the Office of the Prime Minister, the communications department of HDC, the Attorney General, the Ministry of Finance, Ministry of Housing, and Minister of Communications Donna Cox.
Cox, in a WhatsApp response, said the questions should be put to the Ministry of Housing. When told the questions were sent to them, she said the cancellation of the contract will be addressed “in due course by the relevant authorities.”
HDC responded saying they had answered some of the questions already and the Prime Minister had also already addressed the issue. HDC added that “no claims have been made by, nor has any money been transferred to CGGC. Further, at this time, the HDC has reason to believe that all issues surrounding the cancellation of the contract will be resolved amicably by the parties involved.”
Speaking in Parliament on Friday, Finance Minister and acting Prime Minister Colm Imbert answered questions on the cancelled contract. He said both parties are "currently in discussions in an effort to arrive at a mutually satisfactory resolution of the contract."
"As a result there are no penalties accrued at this time," he told the Lower House.
Imbert said Cabinet initially approved the framework agreement for the contract and subsequently decided to cancel it. In response to further questions about HDC’s ability to sign a contract of that quantum, Imbert said, HDC is a statutory authority and not a state enterprise and as such has its own rules, according to statute, adding that HDC has the authority to determine its own contractual agreements.
At the signing ceremony in May were Cabinet members Housing Minister Edmund Dillon, former housing and public administration minister Marlene McDonald, Trade Minister Paula Gopee-Scoon, Foreign Affairs Minister Dennis Moses and Attorney General Faris Al-Rawi.
The cancellation of the contract came days after the Express reported details of the design, build and finance contract which revealed that CGGC benefited tremendously from the deal whether the contract was successfully completed or not.
In an emailed response to Sunday Newsday, last week, the HDC said the deal was signed with CGGC “after a year of negotiations between both organisations.”
A year ago, also in May, Rowley was the housing minister, doubling his duties as PM, having appointed himself to that portfolio in April and removing himself in August. When the contract was signed Dillon was the Housing Minister and continues in that position.
In that month, Rowley visited China on the invitation of the Chinese government. On his return, he told the media that “in the near future” TT would see investments by large Chinese firms in TT, having met with the leaders of some of those companies.
A year later, the contract was signed by HDC chairman Newman George. George who has close relationship with Rowley is also the chairman of Paria Fuel Trading Co Ltd and Guaracara Refining Co Ltd. He is also a board member of Trinidad Petroleum Holdings Ltd.
Answering questions in the Senate on June 24, Dillon said the cost per unit to HDC was approximately $1.15 million and the subsidised cost had not yet been worked out.
The contract, which HDC said was legal even after it was cancelled, stipulated that the state could not offer the contract to anyone else should it be cancelled. HDC had also agreed to pay the firm the total profit they expected to make from the deal if it was cancelled.
The first phase of the contract included 235 units at Lady Hailes Avenue in San Fernando, and 204 at South Quay in Port of Spain. After the cancellation, McDonald, the MP for Port of Spain South, said she was worried and concerned about her constituency but will be monitoring the cancellation of the contract.
Al-Rawi, MP for San Fernando West, where the remaining 235 homes were to be constructed, said the cancellation is “nothing to lose sleep over.”
“I think this is really a storm in a teacup and I am honestly not worried about it. At the end of the day as the businessman say, if you are sharpening pencils to get a better value on then c’est la vie,” Al-Rawi said early last week when asked about the cancellation.
Rowley is in the US on official business.