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Thursday 21 November 2019
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Tobago

THA 'BOLTS' to Privy Council

Court of Appeal ruling not accepted

Secretary of Finance Joel Jack - THA
Secretary of Finance Joel Jack - THA

The Tobago House of Assembly (THA) plans to appeal a High Court judgment which says it cannot enter into special financing arrangements for construction projects without the permission of the Minister of Finance.

Speaking with reporters during Wednesday’s post-Executive Council media briefing in Scarborough, THA Deputy Chief Secretary and Secretary of Finance and the Economy Joel Jack made the disclosure.

On October 21, in a ruling in the Court of Appeal, Justices Allan Mendonca, Gregory Smith and Andre DesVignes held that under the THA Act, the assembly was not empowered to enter into Build, Own, Lease, Transfer (BOLT) arrangements for developing and financing construction outside the statutory framework for the control of expenditure. It must have the permission of the Minister of Finance.

Jack recalled that it was Justice Boodoosingh who ruled initially in the High Court that the THA can enter into BOLT arrangements without the consent or approval of the minister.

He said, “It is our intention to appeal the High Court judgement and we believe that the initial ruling by the High Court would stand and we intend to appeal all the way to the Privy Council.

“We have a responsibility as an assembly to ensure that we’re able to conduct business within the parameters of the law, but within the full understanding of the framework of the assembly, as a body who is able to source alternative financing mechanisms.

"We believe that we’re operating within the confines of the law and we believe that the appeal would be ruled in our favour. So we intend to appeal this decision again and the senior legal counsel of the Tobago House of Assembly has been so instructed to file the necessary documents for the appeal,” he said.

BOLT agreements are non-traditional procurement methods of non-debt-based project financing under which a client gives permission to a private entity to build on the client’s land. The client then repays the construction costs by entering into a lease with the company to rent the building for a prescribed period. On the completion of the lease, ownership of the facility will be transferred to the client.

The $143-million THA administrative complex, which has 83,000 square feet of floor space, was built using a BOLT arrangement. The THA, under Orville London, bought three acres of land, then leased the property to Milshirv Ltd for $10 annually for 199 years.

The special-purpose company Milshirv was to build the complex at an estimated cost of $143 million and then lease/rent it to the THA for $1.2 million a month for 20 years. At the end of the 20 years, or at three-year intervals, the THA could buy and take ownership of the complex.

Milshirv currently houses the Licensing Department and will soon also house the head office of the THA Division of Food Production, Forestry and Fisheries.

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