THE GOVERNMENT is owed millions of dollars by some of the Information Technology (IT) companies which were granted loans from the Intec Fund to kick-start their operations.
The matter of the outstanding sums arose during yesterday's sitting of Parliament's Public Accounts Committee, where the Intec Fund was put under the spotlight.
Caytech Jamaica Ltd., which was granted a loan of $59.2 million to start its operations in 2000, subsequently decided to discontinue its borrowing relationship with the Fund. It paid up some of the money borrowed, however the company still owes the government about $10 million.
Permanent Secretary in the Ministry of Commerce, Science and Technology Dr. Jean Dixon, explained steps have been taken to recover the money and that the matter was now in the hands of lawyers connected to the National Investment Bank of Jamaica (NIBJ).
The NIBJ had responsibility for managing the $1.5 billion Intec Fund, which was set up to finance the development of the IT sector. Disbursements from the Fund have since been put on hold. The IT programme was supposed to have created about 40,000 jobs. However, just about 1,270 jobs have been created so far.
Baytel, another of the companies funded by the Intec Fund, owes about $35 million. However, Dr. Dixon said this money is secured through the NIBJ's lien on a building which the loan was used to refurbish.
According to the report of the Auditor-General, the Intec Fund was poorly managed in several respects.
"More careful attention should have been paid in assessing the track record of those seeking public funding of the projects," said the report.
NetServ, the most controversial company to have been granted a loan from the Intec Fund, found itself in receivership in 2001. The company which was granted $180 million to set up a call centre, collapsed, sparking calls for the resignation of Phillip Paulwell, who had Ministerial responsibility for the Fund.
At the time, there were charges by the Opposition Jamaica Labour Party that the due diligence assessment of the company was inadequate and that this led to unscrupulous persons acquiring government funds.
The company has since been sold for US$4.25 million (about J$208 million) to a Miami-based company, Touchpoint Centres International Corporation.
PAC chairman Audley Shaw said even though the Fund was not properly managed initially, the IT programme should not be abandoned. According to him, the programme can reap benefits if the proper research is done to ensure that the companies which are attracted are genuine.
