BLYTHEACCORDING TO the report, the Commission received several corroborating statements during the period of consultations and interviews, from varying stakeholders in the PRIDE process, some of which are enunciated below:
In many instances, pressure to make payment to contractors comes directly from the Minister of Water and Housing.
The independent consultants' report has some genuine excesses, but it points overwhelmingly to the fact that something is very strong.
While PRIDE may be better administered if the contractors/consultants were answerable to and engaged by NHDC and not the IPs, the problem is more profound. Consultants/contractors would never begin work without receiving an indication either from NHDC or MWH that payment will be effected. They are well aware that payment does not come directly from the IP. Further, consultants are generally paid on a percentage basis, and so it is in their best interests to do elaborate and costly designs, e.g., 60ft wide roads in Whitehall.
Direction comes from Ministry of Water and Housing (MWH) as to who should get paid, how much and when.
"Beneficiaries" get no benefit when they cannot afford the high selling prices, even after subsidy. Therefore the lots go to the open market for sale. Even if full recovery is made on the open market, this is not the purpose of Operation PRIDE.
The Minister of Water and Housing and/or Mr. Evan Robinson select(s) the site, identifies consultant (usually Mr. Robinson) and contractor (usually the Minister). This is the contract award system.
There is a "brotherhood" or on-the-ground network of communication among the IPs that facilitates the PRIDE Operation. TSD was not accepted as part of the communication network, but Evon Robinson's group - having become familiar through on-site representation - was part of that network, and gained the trust of the IPs. The Government must have that kind of foothold on the ground or the programme will not work.
Contractors give money to IPs to ensure that IPs use their services.
NHDC needs to realise that cutting corners cannot speed up a project. It's going to cost more in the final analysis. For example, the topography on Belle Air was received when the contract was already 50 per cent complete.
NHDC's cash flow problems delay work on sites. As a result, contractors frequently claim for extended preliminaries, which in turn increase project costs.
With the change of Minister in 2000, NHDC's plans approved by the Board and the former Minister of Environment and Housing for reformulating implementation of PRIDE in a sustainable manner and allowing for improved expenditure control were put aside in lieu of a new way forward for NHDC as instructed by the Minister of Water and Housing.
NHDC's cash flow problems were caused, primarily by the pace of development, constant addition of new projects, and the inability to make full recovery due to reduced selling prices.
At project completion, the Minister of Water and Housing gets a report from NHDC identifying full costs by components, a recommendation from NHDC to reduce or remove certain components, and a recommended selling price. The Minister makes final decision. For example, the Minister instructed the removal of land, admin, water and sewerage costs from Melrose lots. Further, subsidised lots can be re-sold on the open market at significant capital gain to the seller.
Initially NHDC made genuine attempt to reconcile selling prices with socio-economic surveys, but this fell apart under pace of Minister's programme. The Minister, more than once, instructed to "let the paper-work catch up to the construction."
During early 2000, and following the change of Minister, work commenced on a number of the previously deferred 91 projects. When the new Board was constituted in September 2000, it found that, irrespective of the Cabinet's decision instructing to the contrary, several additional projects had begun implementation; some in the absence of or inadequate critical technical work, thus returning NHDC to a situation that had it previously taken almost two years to overcome, prior to deciding on a sustainable way forward for the organisation and the PRIDE programme. Further new projects, outside of the previously identified 111 sites, were frequently added.
Thirty letters were written to the Minister of Water and Housing informing of NHDC's discontent with the current practice by MWH of adding new projects to the portfolio and the commencement of implementation without reference to and/or approval of the Projects Sub-Committee of the Board. The Minister was also repeatedly informed of NHDC's financial position both orally and in writing. His response was that Operation PRIDE is a priority programme for the Prime Minister and that NHDC should not be overly concerned about its financial situation because the Cabinet would instruct that the necessary financial resources be made available.
The Minister of Water and Housing subsequently agreed that there were to be no new projects without reference to NHDC Projects Sub-Committee. However, a few weeks following on that directive, new project bills came to NHDC for payment. The bills came from IPs, but were routed from MWH. NHDC has refused payments because it did not approve start of any of these projects. To date, there is approximately $200 million in unpaid bills with respect to these projects.
Due to the futility of full financial recovery with respect to monies expended on projects, particularly in respect of the frequency of reduced selling prices, there was and, in some ways, still exists a "feeling" among the NHDC staff that Operation PRIDE is a Government "give-away". This has contributed to the cultivation of nonchalance in ensuring the existence, accuracy and proper execution of sale agreements, loan agreements, and other critical pre-contract documentation. The pace of the Minister's programme exacerbates this situation.
