Errol Greene (centre), new executive chairman of the National Solid Waste Management Authority (NSWMA), watches as a mini dump on the Spanish Town bypass in St. Catherine is cleared on June 25. He is flanked by representatives of the NSWMA and the St. Catherine Parish Council. - IAN ALLEN/STAFFPHOTOGRAPHER
THE NATIONAL Solid Waste Management Authority (NSWMA) head office is located at 61 Half-Way Tree Road. Initially this property was leased by NSWMA for a period of five years from the agents and property managers, Life of Jamaica. The lease expired in July 2003.
The EXIM Bank purchased the property on August 18, 2003, and continued the lease arrangements with the NSWMA. Subsequently, the EX-IM Bank sold the property to the NSWMA for $68 million.
Of the $68 million, $52 million was financed through a mortgage from West Indies Trust Co. Ltd, and the balance of $16 million was paid by NSWMA. Two valuations for this property are on record; National Land Agency, March 2004 for $55 million and from Easton Douglas & Co. Ltd August 2004 for $65 million.
The EX-IM Bank previously bought the building in 2003 for a cost of $53 million. The NSWMA purchase price registered on the certificate of title is $55 million as per the valuation of the National Land Agency. A further $13million was paid to the EX-IM Bank under a collateral/chattels agreement. This was for a 162KVA standby generator and a 60-ton air-conditioning system. Independent checks in the marketplace reveal a possible maximum value for both these items of $3 million. A further review of the valuation report prepared by the National Land Agency indicates that the equipment was already accounted for in the valuation of $55 million.
The NSWMA have reported expenditure of $10 million to $12 million in relation to building improvement works, $10million of which was expended prior to the purchase of the building. The NSWMA expended funds to improve the leased property without the requisite approvals, prior to purchase.
There was no evidence to support that the proper procurement method was utilised to obtain quotations for the improvement works carried out both pre- and post-sale. The procurement of services regarding refurbishing did not conform to the GoJ Procurement Guidelines.
iv. Subsidiary Leasehold Properties (WPM, SPM etc.)
Due to time constraints, the scope of the investigation was limited to NSWMA and its properties and did not include the expenditures for other leasehold/rented properties.
9. EQUIPMENT RENTAL
The NSWMA has developed a list of 60 entities from which various types of equipment may be rented or leased. A distribution of these entities by wasteshed is provided below.
The list has several anomalies including duplications of entities and separate entries for principals of a company and their related entities, for example:
Denzil McDonald and Melrose Farms & Estate, registered by NSWMA as two distinct entities;
Sylvester Green and S.A. Green & Associates, also registered by NSWMA as two distinct entities.
The only stated criterion for inclusion on this list is the historical provision of adequate service delivery. Only eight of these 60 entities or individuals listed were on the National Contracts Commission register of suppliers of goods and services.
NSWMA's response to questions raised by Parliament regarding equipment rental for the various wasteshed sites conflict with the information submitted by them to the OCG.
These conflicts include but were not limited to:
A 966E front end loader was hired from K. Morrison for the Retirement Wasteshed, but the report provided by NSWMA for submission to the Senate stated a D8 bulldozer;
D9 bulldozers were hired from both Black Brothers and Melrose Farms for the Riverton Wasteshed, however the report provided by NSWMA to be submitted to the Senate stated hireage from Melrose Farms only;
The Riverton Equipment logbook shows 10 pieces of equipment rented at the Riverton Landfill in contrast to the six reported by the NSWMA for submission to the Senate.
A review was completed of the logbooks for both the Riverton and Retirement wastesheds for the period 2002 to present. The logbook from the Retirement wasteshed listed the type of the equipment, the name of the operator, the log-in time, and the log-out time, which was verified by signature of the landfill supervisor. In addition, there was a summary of the hours logged by each piece of equipment and a reconciliation of downtime was also recorded and verified by the supervisor.
In contrast, the logbook for the Riverton wasteshed only recorded the type of equipment, as well as the log-in and log-out times. There is no proof of verification of the hours by signature or otherwise by the landfill supervisor. Further, the information provided was for the period August 2004 to May 2005, despite the request for information from 2002 to present.
The MLGCDS's internal auditors reported that claims from Melrose Farms for equipment rental were paid without the requisite time sheets being submitted to substantiate these claims. The NSWMA has indicated that the time sheets were never normally presented for these types of claims. The Director of Corporate Services, Planning & Research has the responsibility to authorise these payments.
The equipment logbook for the Riverton Landfill shows that the D9 bulldozer and the 966E front end loader rented from Melrose Farms worked for 16 hours and 12 hours respectively, continuously, for a period of six months. Checks made with several entities that are familiar with the operation of equipment of this nature, including members of the bauxite industry, revealed that it would be near impossible to operate these machines in this manner as the maintenance regime required would not accommodate it. This is true, even under conditions less severe than at a landfill. Further, the minimum maintenance regime recommended is consistent with those currently utilized by the NSWMA on their equipment. The NSWMA have made payments on unsubstantiated records and for what appears to be unrealistic operational hours.
NSWMA did not utilise the GoJ's procurement procedures to procure equipment rental services, nor did it enter into any contractual arrangements for the lease/rental of any equipment. Although no explicit NCC category for equipment rental exists, for the purposes of registration, the norm is to register the supplier under the General Services category and specify Equipment Rental.
The rates per hour utilised are in most cases within industry standards. For the period February 19 to August 18, 2004, Melrose Farms submitted claims totaling $3.3 million per fortnight. During the period June 26 to July 5, 2004, S.A. Green & Associates Co. Ltd. claimed for payments totaling $369,000.00.
There was no established basis for the selection of contractors. Moreover, the hours logged and claimed appear questionable and demand further review and investigation.
