Saturday, February 24, 2018

The Milshirv judgment

Reginald Dumas logo28

Mark Fraser

Pt. II

There are aspects of the Milshirv judgment we should look at.

First, the judge said that “(o)ne of the main advantages” (of a BOLT arrangement) “is that the entity contracted by the client” (in this case, the THA) “has the responsibility to raise the project financing during the construction period. This permits the client to utilise recurrent expenditure to pay for the facility over a period of time as opposed to upfront capital expenditure.” (My emphasis.)

In  a media release of September 6, 2012 the THA had made the same point: one of the benefits of a BOLT arrangement, it said, was that “the THA (would) not have to put out any money for the project.” Yet merely one week later a THA ad then told us that “(t)he Assembly was required” (my emphasis) “to put aside 18 months of lease payments, or approximately 7.5 per cent of the total expected lease payments, so as to guarantee that the actual lease payments would be made when due.” 

This requirement to establish an escrow account, the ad went on, was “quite normal financial market practice...” A document in my possession enjoins the THA to pay an upfront amount of $21.56 million “as a security deposit...” So, readers, there’s the logic—the THA says it doesn’t have to put out any money, but nonetheless it has been required (by whom?) to put out money. Taxpayers’ money. I hope someone can help us with an explanation.

Second, the judge said that “(a)ll State lands in Tobago are vested in the THA by section 54 of the Act.” But he omitted a crucial phrase. Section 54 provides for such vesting “in right of the Republic of Trinidad and Tobago.” What does that qualification mean?

In piloting the THA Bill through the Senate in November 1996, Attorney-General Ramesh Maharaj,  replying to a question from Senator Martin Daly on the interpretation of the phrase, said this: “The lands are being held by the Assembly in trust for the state of Trinidad and Tobago. Whatever procedures and laws exist are subject to those laws, whether it is the State Lands Act or any other Act...(The THA) can deal with land in Tobago, subject to the powers of Cabinet and existing laws.” Does the Judge agree or not?

Third, the Judge said that if Parliament had wanted to make provision for the Cabinet or a Minister to have the power to approve BOLT arrangements it could have done so. But it hadn’t. He may be right, though I wonder how many parliamentarians in 1996 had even heard of such arrangements.

Fourth, the Judge quoted section 4 of the CTB Act, which confers on the CTB sole and exclusive authority (save as provided in two other sections) “to act for, in the name and on behalf of the Government and the (relevant) statutory inviting, considering and accepting or rejecting offers for the supply of articles or for the undertaking of works or any services in connection therewith, necessary for the carrying out the functions of the Government or any of the statutory bodies.” (Judge’s emphasis.)

As noted in my previous article, the THA argued unsuccessfully that this was not an issue of articles or works or services but of land. The judge apparently didn’t feel it necessary to mention—perhaps it wasn’t relevant in the circumstances—that, under section 4(2) of the CTB Act, the functions and duties of the CTB were extended in 1997 “to include the authority to act for, in the name and on behalf of the Government to dispose of real property owned by the Government...” I assume that “real property” includes land.

Interestingly, statutory bodies, of which the THA is one, are not mentioned in the 1997 amendment. Because of the phrase “in right of the Republic of Trinidad and Tobago”, however, I would strongly suggest that the THA exercise great caution in its approach to State lands in Tobago. 

Fifth, the Judge made it clear that the THA should have used a competitive bidding process. I agree. In an Express article of September 12, 2012 I asked, “Were tenders (for the Milshirv project) publicly invited?” I knew the answer was no, of course – the THA had, in Manningspeak, previously deemed Milshirv a “special purpose build the facility.” But now that the Judge has in essence said that the THA has violated the law, in this case the CTB and THA Acts, what happens? What legal and other steps will, or can, now be taken by the government, the THA and the company?

Lastly, the Judge urged prudence on the THA. If it had plans to get into BOLT-type arrangements, it should, he said, first discuss the matter with the government. Without such prior consultation, he warned, the Finance Minister “(might) not allocate recurrent expenditure each year to cover the payment of (the) lease rent.” (Hence the escrow account, I wonder?) The Judge’s wisdom wasn’t Solomonic, just commonsensical. Even the gladiators of the THA should be able to grasp it.

And he added that “ongoing discussion, consultation and cooperation” between the government and the THA were “fundamental to good governance and efficiency.” He is perfectly correct, and Article 31 of the THA Act makes provision for such meetings. But it takes two to tango, and at least two to talk. The THA Chief Secretary, Orville London, not infrequently adopts the pose and posture of the pugilist in his relations with the Government. At the same time, he complains about the Prime Minister’s silence on his requests for peaceful and productive encounters.

May we now hear from her? 

• Reginald Dumas is a retired diplomat and former head of the Public Service