Wed | Jan 16, 2019

Probe NHT purchase. Private-sector groups want OCG, AG offices to examine Outameni acquisition

Published:Friday | November 7, 2014 | 12:00 AM
Cecile Watson
Norman Horne

Gary Spaulding, Gleaner Writer

WITH LOCAL private-sector interests yesterday calling for an investigation into the National Housing Trust's (NHT) contro-versial purchase of Outameni Tours and Entertainment Projects, The Gleaner has obtained a copy of the minutes of the board meeting that led to the March 2013 purchase of the Trelawny-based operation.

The Jamaica Chamber of Commerce, Jamaica Manufac-turers' Association and the Private Sector Organisation of Jamaica, have raised eyebrows at the NHT's decision to spend $180 million to purchase the property, plus $100 million to upgrade the facilities, bringing total expenditures to in excess of $280 million.

This has spurred the nation's powerful private-sector organisa-tions to call for both the offices of the Contractor General and the Auditor General to immediately initiate investigations into the matter.

Minutes of the NHT board meeting, dated March 14, 2013, have confirmed Gleaner reports that the transaction emerged out of a political decision, after tourism interests on both sides of the political divide prevailed upon the Government to rescue the privately owned facility that was bleeding.

The NHT purchased the property despite technical evaluations conducted by its Construction & Development Department, which found that it did not appear to facilitate the Trust's mandate for affordable solutions and was more suited for a recreational heritage-type facility.

The findings were based on, among other things, the high developmental costs to convert the property from its existing usage to residential, as well as a view that the relatively small acreage to be developed was not feasible to viably spread overall development-related costs.

Notwithstanding the department's findings, NHT Board Chairman Easton Douglas announced during the meeting that "the board has already taken a decision".

Concerns were raised by some board members.

Norman Horne, a member of the governing People's National Party (PNP), called for a review of the proposal.

He asserted that a review of all proposals and existing commitments of the NHT was necessary in light of the commitment to make a special allocation of $45 million to the Consolidated Fund for budgetary support over a four-year period, and, if necessary, the Trust's management should seek to renegotiate.

The minutes divulged that NHT Managing Director Cecile Watson acknowledged Horne's concern and disclosed that a review of all proposals was being undertaken by the Trust's technical committee.

At the time, information presented to the board was that as at September 2011, the land was valued at $311.16 million. Additional information indicated that a valuation of the land was carried out on February 22, 2013.

The minutes also disclosed that board members were told that the forced sale value of the land was $224 million and the recommended market value, $280 million.

The umbrella groupings of private-sector bodies argued collectively that over the years, Outameni, which was owned by private-sector interests, has proven to be a loss-making entity, despite repeated efforts to make it a profitable tourist attraction.

"It is questionable to now think that the Government, which generally has fewer management resources than the private sector, will now be able to bring the company to profitability," the groups stated in a joint release. This, they warned, will lead to continual losses accruing to the NHT.

The groups also questioned whether the purchase of a private attraction at this time can be reconciled with Government's stated policy of divestment of non-core assets, and have called on the Government to explain this apparent contradiction.

According to the minutes of the March 13, meeting, board members raised questions when Douglas disclosed that the transaction was a foregone conclusion.

Sonia Hyman, a board member, asked about future operations of the facility. She suggested a review of the projects be carried out simultaneously by the Technical and Financing committees, "in order to prevent the addition of another layer of approval and further delays".

Douglas stated that the NHT would be "looking at, and giving due consideration to, its management, in collaboration with other government agencies, such as the Tourism Product Development Company and the Tourism Enhancement Fund".

The minutes disclosed that Douglas also reminded members of one of the recommendations of the Jamaica 50th Celebrations Sub-committee, which was for a facility similar to Emancipation Park, to be established in western Jamaica.

Douglas said that with the cruise shipping pier in proximity to the property, the NHT, as an agency of Government, could earn from the project and claimed that a management plan was, therefore, being formulated.

Trade unionist Helen Davies-Whyte said it was her understanding that: "Having taken the decision to facilitate the special distribution to the Consolidated Fund, it would have been necessary to amend the NHT's strategic policy accordingly".