Fri | Aug 18, 2017

Chinese land saga deepens - Knight says gov't did not intend to pay

Published:Tuesday | May 9, 2017 | 5:00 AMJovan Johnson
K.D. Knight
Omar Davies
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The Jamaican Government had no intention of valuating lands owned by the Urban Development Corporations (UDC) that were earmarked for transfer to Chinese developers of the US$720-million North-South Highway, and only started negotiations after the board aggressively insisted on it, former chairman K.D. Knight has revealed.

Knight, who served as board chairman from April 2012 to March 2016, also said the Simpson Miller Government did not plan to compensate the UDC.

He told The Gleaner yesterday that he was "dissatisfied about the entire transaction" relating to how 1,200 acres of prime real estate was to be transferred to the China Harbour Engineering Company (CHEC) with which the Government signed a 50-year concession agreement to develop the highway.

"The UDC was not consulted in the beginning when the arrangements were made between the Chinese and the Government of Jamaica. The arrangements were made in early 2012, but I was never satisfied," he said.

An implementation agreement that references the lands was signed in November 2011 under the Jamaica Labour Party administration and remained when the final deal was signed in 2012 when the People's National Party took over the government.

NO CONSULTATION

According to Knight, the UDC's interests "were never considered" when the Government was contemplating lands at Mammee Bay, where the 66-kilometre roadway ends. The UDC owned two parcels of land worth 200 acres there - Top Fort and Laughing Waters in Ocho Rios. The Caymanas lands, he said, were never finalised.

"Although the lands were owned by the UDC, the decision for those lands to be earmarked for the use of the Chinese was not a decision made in consultation with the UDC. Our board protested and said that could not be, because the UDC is a self-financing corporation. Later on, we began negotiations with the Government because we said, 'Look, if you're handing over these lands, then the Government had to pay UDC for the lands,'" the senior attorney explained.

"No, no," he stressed, when asked if there was any contemplation to pay the UDC. "There was none!"

In addition, Knight said no payment for any of the lands was made up to his departure last year March, "because the negotiation was never concluded".

"What upset us," he added, "was the fact that one of the parcels of lands was pledged as collateral to PetroCaribe because the previous Jamaica Labour Party administration had caused UDC to be involved with the development of Falmouth and monies were borrowed from PetroCaribe for that purpose".

Knight continued, "My board said, 'No, it can't be a situation where we are servicing the loan which was imposed on the UDC and now the lands will go free.' So, we insisted on Cabinet taking a decision and Cabinet took a decision that negotiations should be held between the UDC and the Ministry of Finance."

Those negotiations with the then Peter Phillips-led ministry, Knight said, included an arrangement for the two parties to co-finance a valuation.

Up to press time, the Ministry of Finance had not commented on the matter. Meanwhile, questions sent to the UDC are yet to be answered. The senior management team of the agency was meeting up to late yesterday evening.

Knight's comments come as former transport and works minister, Dr Omar Davies, who signed the deal with Phillips in June 2012, said the UDC and finance ministry should explain whether any valuation of the 850 acres already identified was done.

Broken down, the 850 acres is made up of 200 acres of prime beachfront real estate in Mammee Bay, and 650 acres at Caymanas - a prized area for residential and industrial development. The lands are for development based on contractual provisions.

Davies stated: "There was valuation, but I don't know if all the different parcels were valued. But the Ministry of Finance initiated valuation. Some valuations were done, and I'm not stepping away from it, but this was the Ministry of Finance's job."

PUBLIC OUTRAGE

Public outrage has been mounting since last Wednesday after Ivan Anderson, managing director of the National Road Operating and Constructing Company (NROCC), told a parliamentary committee that there was no valuation of the lands because they were state owned.

He said, though, that the lands could cost about US$20 million if the J$2.1 million per acre paid to acquire land to build the highway was used.

But Davies said yesterday, NROCC, which reported to him but now falls under the economic and job growth ministry of Prime Minister Andrew Holness, "was simply involved in the technical relationship with the construction firm".

Dr Horace Chang, who works from the ministry, said Holness could address the issue as "early" as today.

Government provided the lands as part of an incentive to the Chinese to develop the highway which, according to Anderson, is not expected to make a profit for at least another 20 years.

The lands are to be used for development purposes and, under the deal, could revert to Government if the proposed development does not take place.

The Office of the Contractor General is probing the US$720-million deal. Davies unsuccessfully used the courts to block the monitoring of the contract.

Finance Minister Audley Shaw was reported in March as saying the land-transfer deal has been finalised.

jovan.johnson@gleanerjm.com