Part V of a Special Report:

The Conclusion

It had all the makings of a brilliantly hatched and organised bid-rigging scheme: a corrupt local contractor, a discredited United Nations official, a world-renowned desalination expert for hire, another hired-gun consultant formerly in the employ of the UN, a web of shell corporations claiming non-existent ties to the UN and lax government oversight that facilitated a corrupt public procurement process.

As reported previously in this series, the desalination bid process managed by the Ministry of Public Utilities (MPU) was manipulated from the outset. The outcome pre-determined. The taxpayers of Trinidad and Tobago cheated by the State's inability and or unwillingness to prevent Hafeez Karamath and his co-conspirators from obtaining a lucrative 20-year water-supply contract through corruption.

Karamath and his co-conspirator in chief, Dr Joseph Ben-Dak, in an elaborate conspiracy to steer the contract in Karamath's favour, arranged for Israeli consultant Mark Austin to help the MPU and the Water and Sewerage Authority (WASA) design the bid-evaluation criteria on the US$120 million water infrastructure-related project. Austin was then a consultant in the UNDP Global Technology and Business Group, which was headed by Dr Ben-Dak until his ouster in April 1997.

And though the Israel-born Ben-Dak was terminated on April 1 that year by the UNDP for misuse of UN credentials for his personal benefit, he retained a leading role from outside, using personal friendships and ties to former colleagues and countrymen, like Austin, to put his bid-rigging scheme into action. Austin was the first Ben-Dak man on the scene, dispatched to Port of Spain in late 1997 to set the stage for a Karamath win.

Austin would later tell investigators at the end of the first of four trips to Trinidad, he met with Karamath who told him there was plenty of money to be made on the desalination project. Austin also admitted in interviews with the police to being the beneficiary of a US$12,000 kickback from Karamath, who also paid for and provided travel and hotel stays for him and his companion.

In January 1998, Ben-Dak's first consultant on the project produced a written report for the MPU which, not surprisingly, found an initial proposal by the firm Hafeez Karamath Engineering Services Ltd (HKESL) as the best way forward. Seven months before the MPU issued the formal invitation to pre-qualify, the Austin Report was urging the then United National Congress (UNC) government to start negotiations with the Karamath company.

Then Public Utilities minister Ganga Singh, who has refused to answer questions related to his role in the desalination saga, acted on an Austin recommendation to take a first-hand look at desalination facilities in Antigua and Arizona, in the US, with his then technical adviser and coordinator of the desalination bid evaluation committee, Kansham Kanhai.

Austin, who played a key role in influencing the design criteria for the project, was taken out of the bid-rigging set in late January 1998 on a Ben-Dak explanation that the Trinidad and Tobago government had rejected his report because he was not a desalination expert and lacked a PhD. He was replaced by another Israeli consultant, Daniel Hoffman. Documents seized by investigators from the MPU, however, show a note to Cabinet reporting reliance "on the assistance of Mark Austin from the United Nations".

The Cabinet note, dated February 18, 1998, detailed the proposed plant visits and the MPU's efforts to explore the available options to satisfy the "acute water supply deficit". Most tellingly, the note says: "In this regard, the MPU is being advised by Dr Mark Austin, senior adviser, Global Technology Group, UN Development Programme, on the issue of water-based technologies."

A January 28, 1998 Austin letter to then minister Singh, which was seized in a 2005 police-conducted search of the privately owned consulting office of Kanhai, shows an unrevealed link between Minister Singh and Ben-Dak. That letter, sent via fax number 868-627-1193, referenced Ben-Dak's role in the affair. The Austin correspondence stated, in part: "I apologise for the delay in completing the report. After giving a copy to Dr Ben-Dak a week and a half ago (his letter to you will accompany the report), I took it upon myself to do some additional work, especially in the area of economics... Please let me know if I can be of further assistance."

Except for the one letter, written by then permanent secretary Emmanuel George on the minister's letterhead, there is no reference to Ben-Dak on the official record at the Ministry of Public Utilities or anywhere else. And even that George letter, dated August 25, 1998, addressed to Ben-Dak in his capacity as chairman of a dummy corporation, International Industrial Development Foundation (IIDF), does not form part of the official record. As previously reported in this series, that letter was supplied to investigators by counsel for Ben-Dak as proof he was properly and formally engaged by the government of Trinidad and Tobago to assist the State's bid effort on the desalination project.

George, now Minister of Public Utilities, has refused to answer questions about how he came to write a letter of that type on the minister's letterhead. He has refused to say who put him on to Ben-Dak or provided the fake company's details contained in his formal letter to the discredited UN official, inviting him and his sham company to recommend an industry expert for the public procurement bid. The George letter, which breached public service protocol, facilitated Ben-Dak's entry as a behind-the-scenes puppeteer in the bid-rigging scheme.

George has relied on memory loss to avoid answering direct questions about his role in the desalination scandal and has made clear, in a September 1 phone interview with the Sunday Express, he has no intention of reviewing the official record to assist his failed memory. He said the same thing to investigators in two interviews in 2005. He was also unable to help investigators' efforts to retrieve a cache of missing documents related to the desalination affair, including the file copy of the August 25, 1998 letter he wrote to Ben-Dak and his made-up IIDF corporation.

George had no explanation for where the letter might be. He told investigators he had left a cache of documents relating to the desalination bid process in a filing cabinet in a corridor outside his office at the MPU before his move to the permanent secretary's chair at the Ministry of Labour. The Sunday Express was told when the investigators failed to locate the missing file cabinet, George suggested it might have ended up in the ministry's archival centre. An exhaustive search at the MPU's record centre, however, turned up empty.

Both Minister George and Ganga Singh, who George has brought back in controversial circumstances as the new Ag CEO of WASA, have refused several requests made by this newspaper for an interview or to respond to questions submitted to their respective offices. It was during the tenure of these two high-ranking public officials, one a Cabinet minister, the other a top civil servant, that Karamath succeeded in his bid-rigging scheme.

Both men in separate press interviews, at different intervals, absolved themselves of any blame after the lid blew off the contract-fixing scheme in 2005. Both maintained the process was transparent and free of corruption. More recently, on September 1, Minister George, in his phone conversation with this reporter, said: "As far as we were concerned in the ministry, there was no corruption in the desalination project, and I maintain that even now."

His stock response to several specific questions, however, was a bad memory though he held the view if Karamath bagged the lucrative water supply contract, then he must have had the best proposal. Three individuals and a Karamath-owned company, HKESL, were charged four years after the desalination plant was finally commissioned in June 2006.

The fraud and bid-rigging charge against Karamath died with his death on November 2 last year. Hoffman, who initially cooperated with investigators, refused a plea bargain deal and has remained in Israel since a warrant was issued for his arrest on charges of fraud and bid-rigging. There is no extradition treaty between Trinidad and Tobago and Israel.

A US District Court in New York, USA, refused an application for the extradition of Ben-Dak, on the grounds this country had failed to meet stringent probable cause test Ben-Dak manipulated the bid process to favour his buddy, Karamath. A second application was filed in 2009 but was withdrawn last October before it could be heard. Sources familiar with the situation said Karamath, who was battling cancer at the time, was in negotiations with State officials to a plea bargain deal, in which he and his company would plead out and pay monetary fines in exchange for his testimony against his co-conspirators. A fresh application was being drawn up when the government changed.

The civil action brought by WASA against Desalcott, the joint-venture company between HKESL and Ionics Inc, which won the 20-year water-supply contract, was withdrawn last year after the company refused to take its water production supply up from 24 million gallons of water per day to 30 million gallons a day unless and until WASA dropped its lawsuit.

In 2004, a unit of multinational giant General Electric acquired Ionics' 40 per cent interest in Desalcott.

The fraud charges against Karamath's company, HKESL, continues on October 25 at the Eighth Magistrates Court in Port of Spain.

The value of Karamath's investment in the desalination project was a grand total of US$500,000, excluding kickbacks paid to people involved in the bid-rigging process. For his half-a-million-US-dollar investment, he has already cashed out US$10 million worth of fees from former partner Ionics. His 60 per cent interest in Desalcott, according to a 2002 Ernst & Young fair market valuation, was put at US$29.1 million. Sources say it is now closer to between US$35 million and US$40 million.