Paulwell DESPITE FULSOME acknowledgements that the management of the two-year old Intec Fund was mismanaged, there were no indications from the Government yesterday that anyone would be held accountable.
The chips fell squarely within the Ministry of Industry Technology and Commerce (MICT) however.
The Auditor General's March 8 report on the Intec Fund noted that the State Minister at the time the loan was disbursed, Colin Campbell, authorised a transaction in breach of clearly defined loan guidelines in respect of NetServ Jamaica.
The National Investment Bank of Jamaica (NIBJ), which carried through the directive, disbursed a $22.36 million loan to NetServ for working capital, 'although the Loan Policy Guidelines stipulate that loan funds should not be used for this purpose,' said the Auditor-General (AG) in his report submitted to Minister Phillip Paulwell.
The report does not specify whether the amount was an additional loan on the $202.7 million disbursed to NetServ Jamaica for training, retrofitting of factory space, and telecommunications infrastructure.
The AG also noted that while a memorandum of understanding between NetServ and the Ministry exists, the document does not have the signature of the Government Ministers or relevant officers.
A letter of complaint was also sent to the Ministry of Finance on November 28, 2000 - when the Intec Fund was seven months old - about the MICT's impatient and impromptu directives to the Loan Committee, leading to insufficient time to complete the necessary analysis before loan recommendations were made.
The Ministry's IT role has now been confined to locating and securing investors.
The NIBJ has operational responsibility for the Intec Fund as administrator and trustee, and under its management some $703 million was disbursed to six call centre operations. The agency reports to Prime Minister P.J. Patterson, but despite urgings from the Opposition benches for him to answer for the actions of his agency yesterday, Mr. Patterson remained rooted to his chair.
The PM rose once, but only to support House Speaker Violet Neilson in her attempts to curb the questions of the Opposition. He indicated that the debate would be continued next week and more questions accommodated then.
Opposition Leader Edward Seaga also rose to remind the House that what the AG's report outlines amounts to the wrongful exercise of lawful authority.
"There is no such thing as an agency that operates independently of some ministerial responsibility. This agency is under the portfolio of the Prime Minister," he said. "Now that the Auditor General has recommended that the MICT should not have any more authority, I trust that when the debate is on next week, someone will assume responsibility."
NetServ is at present the most controversial of the loan beneficiaries. Minister Paulwell assured the House that the company could be very valuable in the future when the telecommunications sector is fully liberalised, but admitted that there was no valuation on the "voice-over IP" software that the Government paid US$150,000 in settlement to the Trustee of Bankruptcy in the United States to secure for Jamaica.
Mr. Paulwell said in his presentation to Parliament that NetServ's real value was in the intellectual property rights to the software, but later when asked he admitted to not knowing the worth of the software. He said, "There is no valuation of the software, but we intend to do so now."
NetServ Jamaica is now owned by Government, and so are its liabilities. Pressed by Jamaica Labour Party Member of Parliament Andrew Holness about the company's debt of US$600,000 to a supplier, Paulwell said the intent is to have the liability assumed by the new owner of NetServ Jamaica.
Asked the company's value as a going concern, Paulwell said it would be determined by the bids for its acquisition.
