Dr. Omar Davies

DR. NATHAN Richards is to sever ties shortly as chairman of the National Development Bank (NDB), says Dr. Omar Davies, Minister of Finance and Planning.

He disclosed this in the House of Representatives on Thursday as he closed the 2000/2001 Budget debate. He was responding to the charge made in the Budget debate on April 11 by Audley Shaw, Opposition spokesman on Finance, that Dr. Richards, previously named among public sector bosses earning $9 million or more, annually, was still being paid full emoluments despite his resignation.

Also, Dr. Davies said that foreign consultants employed by the Government to work with FINSAC, earned as much as $26,000 (£400) an hour.

Dr. Davies said that Dr. Richards had not resigned as chairman of the NDB, but was sent on leave after the disclosure. He was still being paid in line with the terms of his contract, which requires that if it was terminated prior to its specified date, he is entitled to full settlement, Dr. Davies said.

"I have asked the chairman of the board (Mrs Rita Humphries-Lewin, chairman of the Development Bank of Jamaica which was created from the merger of the NDB and the Agricultural Credit Bank) who in any event, had promptly responded to this erroneous comment, to bring this matter to an end now that the two institutions have been merged," Dr. Davies said.

Turning to another issue raised by Mr. Shaw in his Budget speech on April 11, that of the amounts paid to foreign consultants working with the Government as well as their competence, Dr. Davies said such professionals were not only difficult to come by, but had options, local and international.

The Minister said that nine foreign consultants or consulting firms had been employed by the Government in the rehabilitation and reconstruction of financial institutions under FINSAC, as well as in forensic accounting and auditing.

These are: Ernst & Young; Kroll Lindquist Avey; McKinsey & Company; Holland & Knight; Peat Marwick; Deloitte and Touche; TransAmerica Financial Services; Kurtis Bray; and Tom Turulla.

He said that the first six firms named were world renown and could not be described as having dubious credentials. Further-more, they operate on a basic fee structure:

"You either afford such persons or you can't," Dr. Davies said.

He said that TransAmerica was employed after a comprehensive search to provide the management for Union Bank and all the consultants they provided had good track records.

"I make no apology for the fact that the management agreement provides for billing rates for consultants ranging from US$475 per day to US$1,200 per day. In addition to reimbursement of air fares and related travelling expenses, those consultants on long-term assignments are given a living allowance of US$3,600 per month to cover the rental of an apartment, utilities, meals, et cetera," the Minister said.

He said those on short-term assignments received hotel accommodation in discounted facilities paid for by FINSAC.

He said that Peter Standish, a senior partner of Ernst & Young in the United Kingdom, who visits Jamaica once every two months, is paid about £400 pounds ($26,000) per hour: "You don't get a senior partner out of Ernst & Young out of London for under that. You either want him and can afford him or you can't".

Turning to the individuals, Bray, and Turula, Dr. Davies said that Bray was paid a total of $11.4 million, while Turula was paid $10.5 million. Both men were required to advise the Government on setting up a new insurance company but, eventually, advised against it.

He said that although the men were not "schooled in a whole lot of manners and niceties and all that," they were effective.