By CAMINI MARAJH, The Express
IN THE road paving rush on the eve of the 2000 and 2001 general elections, State-owned Tourism and Industrial Development Company (Tidco) openly flouted procedure, awarding multi-million dollar contracts without tender and in some cases before any signed agreement was reached between it and the contractor.
In a stinging rebuke of the State agency’s apparent disregard for established rules in administering the $1 billion National Road Enhancement Programme (NREP), a report by the Auditor General has raised questions about the ease with which funds were disbursed for car rentals, gas bills of over $60,000 and the payment of non-budgeted administrative fees, among other things.
The NREP audit, dated July 5, 2002, and signed by Jennifer Frederick, acting assistant Audit Director, also raised concerns about the inter-locking relationships of key figures in Tidco, in what insiders allege is a clear reference to that agency’s President and CEO Vishnu Ramlogan, and the influence wielded by former Tidco chairman and then junior works minister Carlos John.
The report cited an unnamed director of the Tidco Board and his expressed concerns about the use of Tidco as a “facilitator” for the pre-election UNC package of road paving works. The Tidco director also questioned management’s failure to inform the board of the company’s role in the road paving projects.
The board was only clued in on September 6, 2000, more than a month after the Ramlogan management signed off on a Memorandum of Understanding with the Works Ministry and after Tidco’s tenders committee had already invited, evaluated and recommended the award of a $20.8 million contract.
The Auditor General’s report said, however, Tidco failed to produce the minutes of the tenders committee meetings. “As such it is not clear whether due process had been adhered to in the award of this contract or any other,” said Frederick.
But the concerned director had made it clear, in his list of complaints to the board on September 15, 2000, that the Tenders Committee had been cut out of the loop and was not at all involved in the process.
The Tidco board was said to be “unaware” of management’s role in activities unrelated to the company’s core business.
At a meeting on September 22, 2000, some directors expressed “discomfort” with the arrangement outlined in the MOU which gave the Works Ministry full autonomy for the evaluation and recommendation of contracts. Directors protested that it was their understanding that Tidco was to be used “because of its tendering process”.
Notwithstanding the concerns of some directors, however, the board pushed ahead and approved a short-term bridge loan of $60 million from First Citizens Bank, then chaired by Ramlogan, to fund projects earmarked for immediate take-off.
The Auditor General’s report, however, took issue with the loan draw-downs which reached up to $150 million by the time the bond was eventually issued on November 29, 2000. She said board of directors’ approval for the sourcing of the bridging loans was not produced.
Citing the minutes of another board meeting, this one on December 24, 2000, the report said FCB Trust and Merchant Bank was making demands on the company’s corporate secretary for board approvals on a number of NREP loans of which the Tidco official had no prior knowledge.
The draw-downs had reached $553.9 million with interest at $16.5 million and $13.1 million, respectively—a total of $583.5 million. The draw-downs, according to the report, were spaced over the period January 18 to December 12, 2001. Frederick questioned FCB’s role in providing Tidco with cash advances given that the government guarantee was not forthcoming until November 12, 2001.
“In the absence of approval from the Board of Directors for these loans and since the government support via its Letter of Comfort was issued on November 12, it is not clear on what grounds and under whose instructions FCB continued to advance these loans,” said the report.
But in an immediate response, the bank’s CEO Larry Howai made it clear there was no breach of procedure on FCB’s part. Disclosing that the Auditor General’s Department had made no request for information from FCB on this matter, he said Ramlogan’s position as chairman of the bank played no role whatsoever in the disbursement of funds to Tidco.
Ramlogan failed to return several messages left at his home yesterday but Howai was standing firm that the bank’s books would pass scrutiny notwithstanding a demand from the Auditor General’s Department that an investigation be conducted to determine “the accuracy” of interest charges on the loan draw-downs, said to be some $67.9 million.
The Auditor General’s report detailed the loose arrangements made with contractors, the huge cost over-runs in a series of contracts and the diversion of NREP funds to a park development in Chaguanas.
It cited four payments of $15,000 each made to Bhagwat’s Service Station for the supply of gas. The only explanation forthcoming from the Works Ministry, said the report, was that one bill of $15,000 was for fuel for four vehicles.
The report also questioned a $1.2 million pay-out to the auto rental car firm of businessman and UNC financier Ish Galbaransingh. The report reviewed contracts between Tidco and Galbaransigh’s company for the rental of ten vehicles.
“Evidence of tendering for supply of this service was not produced,” said the report, noting that the Works Ministry issued Tidco instructions to pay for an additional two vehicles not identified in the paperwork.
The only documentation found relating to the two vehicles was a payment directive to Tidco issued by an official of the Works Ministry. Tidco paid a whopping 13 payments at $7,187.50 per month or $93,437.50 for a single vehicle, type unknown. It paid an additional $45,520.83 representing a monthly rental of $7,187 on the other.
John, UNC MP for St Joseph, declined comment when contacted yesterday. He said he would like to see the report before saying anything on the matter.
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