Tuesday, January 16, 2018

Wastewater worries


Mark Fraser

 Here we go again. Last Friday, the Minister of Energy delivered a seemingly comprehensive denial to Parliament of bid-rigging allegations made by Leader of the Opposition Dr Keith Rowley. These allegations stem from the billion-dollar contract award to Super Industrial Services Ltd (SIS) for the Beetham Wastewater Plant project. To borrow the famous “bikini” quote, what the Minister’s statement revealed was suggestive, what it concealed is vital. 

The Minister’s 2,100-word prepared statement makes no reference to searing allegations of conflict of interest levelled against the chairman of the National Gas Company (NGC) by Dr Rowley. The silence is instructive.

In a basic online search, August 2010 press reports name NGC’s chairman as chairman of SIS. Did he resign after his October 2010 appointment to the NGC board? Does his past prevent him for dealing with any matters between NGC and SIS? Was he excluded from the board’s deliberations on the project? And did he or his law firm act at any time for SIS, is there a conflict of interest and was any there a declaration and recusal from NGC matters involving SIS? 

Dr Rowley has made an unambiguous allegation of a relationship between NGC’s chairman and SIS. Alongside the facts revealed by the Minister, this is critical to debunking the allegations of bid-rigging. Why was this omitted from the Minister’s report to Parliament? 

The NGC and SIS relationship is not new to controversy. A Sunday Express report on June 9, 2013 identified SIS as the successful bidder to build NGC’s proposed $800 million headquarters. NGC denied this and justified the use of NIPDEC for the tender because of its lack of in-house resources to undertake the project. How does NGC now justify the use of its resources to manage procurement in an area — water recycling and wastewater management — that may also be beyond its core competence and in-house capabilities? The headquarters construction project was put on hold and NGC was advised to direct the $800 million to in-house infrastructural projects. Does this water recycling and wastewater project qualify as one of those in-house infrastructural projects?

SIS is also not new to controversy. A December 2013 Public Account Enterprises Committee (PAEC) report on the Estate Management and Business Development Company’s (EMBD) activities under the previous government found a debt write-off of $460,000 owed by Phoenix Welding and Fabrication. The company, an SIS affiliate, was named by TOP leader Ashworth Jack as his employer when questions arose about Jack’s Tobago mansion. And, at a May 2011 hearing, the PAEC found a lack of documentation in the mining of lucrative sandpits by SIS affiliates who were brought into the sandpits by the EMBD after a 2003 Cabinet decision gave EMBD control. The PAEC found no checks and balances at the former Caroni (1975) Ltd sandpits. This was no goldmine, but with heavy demand for sand for construction, it was close enough.

Now the Wastewater Plant allegations fall on extremely fertile ground. Integrity in public life legislation is weak and ineffective. New procurement legislation remains stuck in Parliament. Senator Helen Drayton’s motion on election campaign financing is before the Senate but new laws may not be in place before the next election. The financial sector intercepted 29 suspicious transactions in 2013, a total value of TT$1.12 billion, an average of $40 million per transaction. We do not know who is involved but we know nearly a quarter of the 554 suspicious transactions filed with the Financial Investigations Unit (FIU) in 2013 involved lawyers and other professionals, and senior company officials in the public and private sector. Some involved politically connected persons, possibly kickbacks. 

We also knew this NGC story was coming. When NGC advertised the invitation for bids in September 2013, Dr Rowley told Parliament the tender was the construction of the “very latest of the feeding troughs” for one particular company. In answer, NGC said the timeline was adequate, and “as proof” said it had received “many expressions of interest from both local and international entities”. From the Minister’s statement last Friday there were 11 expressions of interest and an extended 14-week period for bids. Why did NGC receive only two bids? Did a two-bid evaluation reduce competition to the point that the winning bid is TT$100 million more than NGC’s in-house estimate? Were potential bidders spooked by the spectre of political preference? Were there early signs that the award was heading to SIS?

NGC must clear its chairman’s good name. We know that Foster Wheeler and Hyflux have strong financial and technical qualifications, expertise, and experience. Foster Wheeler is a well-established global engineering procurement company and Hylux has a track record in Asia for this type of project. We also know NGC’s board is experienced, with a well-recognised water expert and engineering professionals on board, and an experienced solicitor as chairman. The allegation of possible conflicts of interest must be addressed.

All public sector corruption allegations will bring us to that $1.12 billion in financial transactions that local financial institutions refused to process in 2013. Who owns $1.12 billion but cannot satisfy the basic anti-money laundering and disclosure requirements? How much of the $1.12 billion involved political connections? How much involved state companies or public sector projects? 

Corruption has no party affiliation. It’s on all sides and that $1.12 billion will not remain idle. It would eventually have made it through the financial system. The allegations made on the Beetham Wastewater Plant project remind us of how those pervasive elements of public sector corruption have created the perfect corruption storm. Strong winds are pounding.    

*Clarence Rambharat is a lawyer and a university lecturer