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Move on from Krauck - PSOJ boss advises state to seek new investors for logistics hub

Published:Wednesday | June 24, 2015 | 12:00 AM

Head of the Private Sector Organisation of Jamaica, William Mahfood, is calling for the Government to move on from the Krauck Group and seek out other investors for the much-touted logistics hub.

The Portia Simpson Miller-chaired Cabinet has accepted the recommendation from the National Logistics Initiative Council (NLIC) that there should be no negotiations between the Government of Jamaica and the Krauck Group concerning the development of an integrated logistics hub at this time, due to insufficient due diligence information being presented by Krauck, the proposed bidders.

The NLIC had twice reported to the Cabinet, raising concerns about Krauck's capacity to execute the intended projects and their fit-and-proper status to do business with the Jamaican Government.

Despite the Cabinet taking the position that the potential investors would no longer be entertained, the Ministry of Industry, Investment and Commerce (MIIC), which is led by embattled minister Anthony Hylton, insisted that the various banking instruments provided by the Krauck Group indicate that the entity has the ability to make the US$5-billion investment project a reality.

"In light of the position of the MIIC representatives, Cabinet has authorised the ministry, if it so wishes, to continue to have discussions with Krauck to see whether additional, credible due diligence information is forthcoming," the Office of the Prime Minister said in a media release yesterday.

Mahfood, meanwhile, told The Gleaner that with Krauck failing to satisfy the committee of its ability to undertake the project, "it means that they are not serious and we need to move on immediately".

"From the mere fact that they have not been provided with the requisite information, financial, etc., I believe that the only choice of action now is for the Government to press on, to look for alternative providers of such service and that would be the correct thing to do, both from a governance and from an accountability point of view," Mahfood told The Gleaner.

But a main supporter of the push to position as a logistics-centred economy, Dr Fritz Pinnock, feels the decision to dump Krauck was too hurried.

"My response to investors is not to go and tear them down. ... I don't know enough about them (Krauck Group), but let the people be around, and when there is a project let them bid on it," Pinnock said.

"I would hate to go and kill the people, smear their names and so on. These people have invested in other countries, so just allow it; back off (and) wait for the project."

He added: "There are other investors who are looking at us who are saying those people are too hostile and that is not the way to deal with people ... . Let us evaluate the things on the basis of the projects and stop assassinating people."

He said that he could not comment on the decision of the NLIC because he was unaware of the information they utilised in coming to a determination.

Pinnock, executive director of the Caribbean Maritime Institute of Jamaica (CMI), who is also the chairman of the Sub-Committee of Education and Training Division on the Logistics Task Force, said he was "not even moved by this [Krauck] proposal", noting that no specific idea was ever put on the table.

"It is a good sign when people are coming in and saying they want to invest in the country. We have to be careful how we go out and strike off people. Jamaica can be considered a high-risk place for investment, and anybody with US$1 billion or US$2 billion will not just come to Jamaica and invest like that," Pinnock said.

The CMI boss said Jamaica has a tendency to cater to big-name entities and people, ignoring the fact that everyone has to start from ground zero.

Pinnock said he remained positive about the push to make Jamaica the fourth node in the global logistics chain.

"I am very positive and I am hopeful that this project is going to work because this country is going to rise and nobody is going to kill my country. I will allow no political divide to try and kill a country like this, it is Jamaica's time to rise," he said.

But Opposition Spokesman on Industry, Investment and Commerce Karl Samuda said Hylton should be fired for his incompetence in dealing with the matter.

Samuda said it was outrageously irregular that the MIIC was being allowed to continue dialogue with Krauck.

"After three reports by the NLIC, they have failed to unearth a credible basis on which to recommend doing business with this company, yet the MIIC is being allowed to continue dialogue with Krauck and Anchor on the spurious grounds that the MIIC was impressed with various banking instructions provided by the group," Samuda said.

He further argued that the fundamental disagreement between the Cabinet and a minister and the customary practice is that "the minister should either resign, or the prime minister has no alternative but to relieve Hylton from his post forthwith, instead of giving him latitude to waste even more time to fiddle around with a company that cannot pass the fit-and-proper, due-diligence test".