By Lynford Simpson, Staff Reporter
Phillip Paulwell, Minister of Industry, Commerce and Technology, gesticulates as he addresses Parliament yesterday. - Junior Dowie/Staff Photographer
AUDITOR-GENERAL Adrian Strachan has painted a damning picture of mismanagement and breach of proper procedure in the handling of the Intec Fund from which more than $700 million was used to finance several call centre companies.
Most of those companies have failed to meet their targets.
Resulting from the report, the management of the loan component of the Fund has been transferred with immediate effect from the Ministry of Industry, Commerce and Technology to the National Investment Bank of Jamaica (NIBJ).
Projects for which funds have been disbursed will now be under the sole management of the NIBJ and its board; the investment bank will only make further loans from reflows collected from existing projects.
"Based on the many shortcomings noted in connection with the projects so far financed under the Intec Fund, it must be concluded that the management of the Fund was inadequate in several respects," Mr. Strachan said in his report. His findings were tabled in the House of Representatives yesterday in the form of Ministry Paper No. 10.
According to Mr. Strachan, "more careful attention should have been paid in assessing the track record of those seeking public funding of projects".
He noted that the "viability of projects and reasonableness of business projections ought to have been subjected to more meticulous analysis and assessment before loans were approved".
He stressed there should have been stricter insistence that loan conditions intended to protect the public interest were complied with and recommended that those concerns be addressed before any future disbursements from the Fund are made.
The Intec Fund was established in 2000 with the proceeds of the sale of two cellular licences. At that time it stood at about $1.5 billion.
The money was to be used, among other things, to outfit companies involved in the information technology (IT) business. It was part of the Government's thrust to create 40,000 jobs over three years.
Mr. Strachan was asked to probe the fund last December by Phillip Paulwell, Industry, Commerce and Technology Minister, following the collapse of NetServ Jamaica, the IT company in which $180 million was injected. The company folded within six months of the massive capital injection.
Mr. Paulwell, in a statement to Parliament yesterday, acknowledged the management of the Fund was "inadequate in some respects" but said "there really is no hint of corruption associated with the Fund".
Nonetheless, the Auditor-General's report was damning. For example, an examination of the minutes of the Local Approval Committee (LAC) revealed that they were not signed. "There was also no indication that most of them were confirmed at subsequent meetings," Strachan said.
A fuller debate was promised for next week by Prime Minister P.J. Patterson who has portfolio responsibility for the NIBJ.
