It is a matter which former PP housing minister Roodal Moonilal has regrets about.
“...In hindsight, if we had to do it over again, we should have ended the rental arrangement in 2010 or within a year at least. It’s a pity we couldn’t close the issue,” Moonilal said on Thursday.
He was referring to the PP’s continued renting of One Alexandra Place which remained unoccupied for five years despite $48 million in rent paid by the State to a private property owner between 2009 and June 2015.
It’s also a matter which caused former PP local government minister Marlene Coudray “headache,” which she said led her to try and end the Local Government ministry’s rental of the building.
And it’s now an issue for the new PNM Government.
In the 2016 budget debate, PNM Rural Development Minister Franklin Khan said the building hadn’t been occupied since 2009 although outfitting costs were added. He claimed a “$71.1 million” outfitting contract awarded under the PP was being reviewed by the Solicitor General’s office for advice “moving forward and onwards transmission to some law enforcement agency.” Government has had quantity surveyors examine the work. Last Friday, Khan repeated comments about the review.
But a spokesman for the contractor, disputing Khan’s figure, said legal notification has been sent to the Government to complete payment.
Asked about the future of the building last Friday, Khan said it may be used, but noted that Public Administration deals with allocations. Public Administration Minister Maxie Cuffie, meanwhile, said no more rent was being paid on the building. On its future, Cuffie said no decision has been made whether it will be used.
Cuffie said the Government was in discussions and will make an announcement on that location within the month, as well as on the occupation of the Government Campus building in downtown Port-of-Spain. He said Government was still renting some buildings.
The rental of One Alexandra Place, St Clair, which straddled two administrations—the Manning-led PNM and the Persad-Bissessar-led PP—has been the source of allegations hurled by both political sides.
The impressive structure at the corner of Alexandra Street and Tragarete Road, though empty, was “resurrected” in the latest Auditor General’s report laid in the Senate last Tuesday. The report stated that $47,813,544.78 in rent was paid between 2009 and 2015.
The report stated that the Cabinet in 2009 (under the PNM) agreed to the lease/rental of office space in the building to accommodate the Local Government Ministry. It was stated that approvals were later seen for the outfitting of the building.
Information received revealed that the lease was transferred to the Housing and Urban Development Ministry (effective August 1, 2014) and then to the Ministry of the People and Social Development (effective May 19, 2015).
The Auditor General also noted the building remained unoccupied from inception of the lease in December 2009. No new payments were made after June 2015. (See box).
A former senior PNM Local Government official involved in the 2009 rental process told T&T Guardian that Kent House, which had housed Local Government and URP offices, was very old, small, and had structural issues.
The Manning administration, seeking new accommodation for the ministry, hired real estate companies to source alternatives and several locations were proposed. A ministerial team including technical officials worked with the property management unit examining cost and sizes, choosing One Alexandra Place.
It was approved by the PNM Cabinet. But the 2010 general election was called and the PP entered office. Checks revealed the lease was from 2009 to December 1, 2014.
“A can of worms...”—Marlene
In the Senate on February 2014, º said rental of the building began in 2009 and since October 2010, the PP administration had paid a monthly rental of $690,000 on the building which was unoccupied.
She said rent was paid to NJ Nahous. were paid to Professional Protection Training Services. Annual rent estimated at $8.2 million was paid for 2011, 2012 and 2013, she confirmed. Government was also paying $927,360 annually for security.
At that time, it was estimated that between $28 million-plus to $37 million in rent was paid since 2009.
Former PP minister Jack Warner, in a 2014 report, claimed Nidco in 2009 wanted to move into the building and in March 2009, had made a ten per cent downpayment of $334,000 to Faris Al-Rawi who, Warner said, was then attorney for the owner. The money was returned because the Local Government Ministry was to get the building, Warner said.
Coudray also said she’d seen Al-Rawi’s name as legal representative of the owner on lease documents. The PP had accused Al-Rawi of being involved in the rental and that the building was owned by his close relatives.
Now the PNM government’s Attorney General Al-Rawi at the time of rental was a Port-of-Spain Corporation alderman. He said he was on record that he’d had a host of clients and “...acted for umpteen entities in relation to matters, some involving the State, for 20 years...”
But with the PP in government in 2014, attention focused on its handling of the building. Then leader of the Opposition Dr Keith Rowley (now prime minister) took issue with the outfitting contract for the building. Rowley claimed the PP wanted to give the contract to a preferred bidder and when “public servants wouldn’t agree, they refused to outfit the building.”
And not only were questions raised outside of the PP, they were raised in the PP also.
Coudray said the entire issue of One Alexandra Place “...was tied up by red tape and was a can of worms from rental to outfitting...”
She was the PP’s third local government minister, preceded by PP’s Chandresh Sharma and Suruj Rambachan.
She said the PNM’s lease arrangement, which had to be continued, went on under both administrations, and claimed no effort was made to get out of the contract until she intervened in 2014.
Coudray took a note to Cabinet asking for the ministry to be relieved of the rental responsibility. “As far as I was concerned, Kent House—where Local Government was previously—was repairable,” she added.
“When the 2009 cabinet decision was taken to rent Alexandra Place, it also indicated arrangements would be made to refurbish Kent House. So I couldn’t understand why Alexandra Place was being outfitted if Local Government Ministry was only to be there temporarily. Nothing was done to refurbish Kent House in the interim.”
Coudray said the PNM hadn’t started outfitting, but under the PP, a contract was awarded for this including outfitting of executive floors and mobilisation fee.
Coudray said she was confronted by the issues in her first week of work at the ministry.
“It incensed me...I put my foot down—cheque was issued. I then asked for a tour of the building only to realise it was empty. I said the ministry shouldn’t even occupy it far more for continuing the arrangement.”
There were also issues with cleaning and security contracts, she claimed.
Coudray claimed the ministry could have gotten out of the outfitting contract since work was delayed, but payments continued.
Coudray said the accounting officer had a duty to ensure the work was done for which payments were made, “and that wasn’t the case.” She said she wanted to relieve the ministry of paying further rent as she saw it as binding the State for another period of payment.
“Cabinet then (2014) agreed the ministry would give up the building. It was shifted to Housing’s Property Development Unit.”
PP sources said Coudray complained to then PM Kamla Persad-Bissessar and there were claims of impropriety concerning the payment and about public servants’ handling of the matter.
PNM Government sources said the matter was being examined by Minister in the AG’s office Stuart Young, who’s spearheading examination of various matters.
Contractor seeks payment
A spokesman for the outfitter, denouncing “misrepresentation” of some information on the contract, said it was $50.6 million ($50,520,775 and 65 cents plus VAT ). They estimated less than half was paid.
They said attorneys have issued a pre-action protocol letter to Government seeking collection of the outstanding sum.
They noted the completion certificate was dated December 2014 and the building was handed over two years ago. They said they’d heard no complaint from the client (Palo Seco Agricultural Enterprises Company—the special purpose company which handled the matter for the Local Government Ministry).
They said there were delays due to changes as other state agencies were supposed to get the building. They noted the ministry made multiple variations which took months to finalise, hampering work, and in the end there was a new use for the building.
“We proceeded in good faith, keeping ahead of the contract, ensuring we were never in breach. At no point was any communication issued to us about discontinuing, or even to date. We understand it’s a multifaceted situation, but it feels that we, as a private player, pay the price when the issue is used as a political football.”
Changes caused
delays—Moonilal
“When we took that building there were already issues,” said former Housing Minister Roodal Moonilal.
He said it lacked certain statutory approvals and only received Town and Country planning just before the 2010 election since the former PNM regime entered arrangements without the approvals. He said the PP examined ending the arrangement, but it would have cost a lot of money and millions had already been paid. “(But) we got the rent reduced a lot from what was negotiated.”
Moonilal said outfitting was started, but the scope was changed, requiring budget changes also. He confirmed problems between the Local Government Ministry and outfitting contractor. He said the dispute was still current.
“...There were some problems since the scope was changed several times from when the building was first earmarked for Local Government and then changed since it was to go to the Ministry of the People. Then Immigration was to have been shifted there when they had issues at their Frederick Street location, all that caused delays.
“The project, was, however completed. Only things to be put in when we left were phone/Internet lines. Local Government had receptions on the rooftop and it was cleared for the ministry to move in on a phased basis.”
On perception the PP squandered money to rent and outfit a building which wasn’t occupied, Moonilal said various ministries tried to occupy it, but the PNM “took the building without statutory approval and outfitting...taxpayers had to pay to outfit a private building and outfitting took time since the scope kept changing.”
He added, “Overall, it was a choice between the Devil and the deep blue sea. We tried to get out of the rental, but we’d already ploughed money into it. At the end of 2010, we should have really ended the contract urgently. It had been a bugbear period for the PP and that was one of the matters at issue. If I had to do it over, I wish we could have sorted it out within a year at least.
“It was a cursed, blighted project from day one with the PNM. Our ambition wasn’t to cancel everything they did but in hindsight, we should have ended rental after June 2010.”
Sharma: We got a 25 per cent reduction in rental
PP’s first local government minister Chandresh Sharma said the rental contract involved penalties for halting the arrangement. He said the PP obtained a reduction on the rent of about 25 per cent and the building was earmarked for the Local Government Ministry.
“You could have gotten out of the contract but there would have been a question of costs, so we felt we may as well occupy it since the Government always had a shortage of buildings. It was a Cabinet decision to keep it, we decided there was no choice as we’d have had to pay (penalties). The advantage was getting the rent lowered.”
On the outfitting contract, he said, “There was nothing in place, it was a bare building so it had to be outfitted to meet OSHA requirements.”
He said the outfitting went through the tendering process, but he didn’t comment further.
Rambachan: This has
been like a football
One-time local government minister Suruj Rambachan said, “It’s very unfortunate that matter lingered, remaining empty for so long...we should have a better way of doing things, it could have been done better. The entire process for procurement of property has to be reviewed.
“Also, the administrators on whom ministers depend for advice should take their jobs a little more seriously. Ministers get blamed for a lot of things—things administrators in the course of duty should deal with and take responsibility for.
“There must be a complete review of the way properties are rented and outfitted by any government. This particular case has been like a football. Someone has to take the bull by the horns and deal with these matters.”
Rambachan said while he was in the ministry outfitting had started and a lot was completed. On whether he was satisfied with the work, he said when he left the ministry it hadn’t been completed but had progressed.