Jagdeo decided on sale of all ‘state assets’ in last decade

May 17, 2012 News

By Gary Eleazar

Executive Director of the National Industrial and Commercial Investments Limited (NICIL) Winston Brassington, appeared on State Television this past Sunday to clear the air on the government holding company.
He said that it was Cabinet, headed by the President, which ultimately has the final say in the disposal of state assets.

NICIL’s Executive, Winston Brassington

He said that the Board of Directors on the Privatization Unit which is the body that falls under NICIL evaluates proposals and makes recommendations to the Cabinet which has the final say.
Former President Bharrat Jagdeo, would have been the Head of Cabinet from 2001 to 2011 when he demitted office and de facto, would have had the final say on each of the sale of state assets according to Brassington.
Shadow Finance Minister, Carl Greenidge, has already signaled that A Partnership for National Unity (APNU) will be paying special attention to all NICIL transactions.
Greenidge told Kaieteur News, recently, that while it is ultimately for the Government to decide where the money is invested; it is also for “the Legislature to know and to give its view on the matter.”
Parliament’s Exclusion
He was speaking to the fact that monies garnered from the sale of state assets by NICIL are utilized to the exclusion of the Parliament.
Greenidge said that ultimately, “it is for the government to decide on how state assets are used, but it does not exercise that power in a vacuum.”
He also argues that it is illegal for the government to make transfers of state lands to NICIL “free of cost,” which in turn sells it at the behest of Cabinet and the entire sum not turned over to the Consolidated Fund.
“If NICIL is a private company over which the Government has no control, then what is it doing receiving free land from the Government,” asks Greenidge.
Greenidge suggests that if NICIL is a private company over which the government does not have control, then it is illegal to be transferring lands to NICIL “free of cost.”
State land is transferred to NICIL which in turn disposes of it in some cases to Ministers, “which as far as I am concerned is illegal, especially to (Bharrat) Jagdeo,” said Greenidge.
Speaking to what NICIL is supposed to be doing with its money, the former Finance Minister insists that the Constitution of Guyana supersedes any law and the Constitution demands that the monies be turned over to the Consolidated Fund.
The former Finance Minister said that “it is not an absolute monarchy here in which the King wakes up one morning and decides that I am going to give all this money to somebody and nobody must ask me anything…This is not part of the mechanism of a democratic government.”

APNU’s point man on Finances Carl Greenidge

Greenidge reminded that the money in question is very substantial amounts and “whilst the government is taxing people and telling them that they cannot reduce taxes, the government has taken revenues from the sale of land and property, has it essentially in a slush fund and they just facilitate friends, cronies, and businesses associated with government and other things.”
He said that what Government must now do, is establish that the monies are being disposed of in a way that is defensible and, “the idea of putting it in the Consolidated Fund is in the Constitution…The default position as it relates Government monies is to put it into the Consolidated Fund.”
Tracking Billions
Turning to his Motion that is before Parliament and slated for debate at the end of this month, Greenidge says that it is meant to assist in the tracking of the billions invested by NICIL for which there has been no public accounting recently.
He reminded that several of the large transactions for which NICIL would have come under fire would have occurred a long time after the 2004 audited accounts.
He says that the motion before the House, is aimed at compelling the Government Minister responsible for NICIL which in this case is the Substantive Minister (Dr Ashni Singh) “to explain what has been done with the funds…The question has to be answered.”
During the last quarter of 2011, it disposed of at least 16 plots of land to several individuals in Mackenzie/Linden Industrial Site.
The sale of land minus the amount of money received for the various plots, each less than an acre, has been documented in the Official Gazette dated March, 2012 and points to agreements for the sale which were effected in August 2011 but made final in February.
According to the information published in the Gazette, the Order was made by the Minister of Finance, Dr. Singh.
The previous year NICIL handled an estimated 30 properties but no sale prices have been disclosed or monies transferred to Government’s Consolidated Fund.
One property was transferred from the Guyana Sugar Corporation (GuySuCo) to Prime Minister Samuel A.A Hinds and Yvonne Z. Hinds jointly.
Another property was transferred from NICIL to Queens Atlantic Investment Inc. (QAII) headed by Dr Ranjisinghi ‘Bobby’ Ramroop.
There was no known advertisement of this transfer nor was there a tender.
Dangerous Role
Christopher Ram, whose company, Ram and McRae has been conducting reviews of Guyana’s budget for the last few years, believes that NICIL has become the vehicle of choice and a “convenience for diverting public funds for all kinds of unusual expenses.
“As it has succeeded in that unlawful and dangerous role it has become more brazen and less concerned about public criticisms.”
NICIL was established under the former Companies Act and the Public Corporations Act to subscribe for, take or otherwise acquire and hold the government shares, stocks, debentures or other securities of any company, co-operatives societies or body corporate.
“It has been doing much more than that. It was involved in the sale of land at Pradoville II; the sale of properties to politically-connected business persons and to others; and it was involved in the controversial and contested award of the Amaila Falls Road contract to Synergy Inc. It is a government favourite that acts as though it too enjoys immunity from action.”
Among the most notable of the questionable transactions done in 2010 by NICIL was the transfer of government land at Liliendaal and Pattensen, East Coast Demerara, to NICIL.
This land, 103.88 acres, was in turn sold to National Hardware Guyana Limited for $600M.
According to Ram in analysis, there is nothing that would have prevented the government from selling the property to National Hardware and placing the money directly into the Consolidated Fund.
“Instead, the land is first vested in NICIL which then sells the land, holding the money which it can then spend as it pleases and pay into the Consolidated Fund whatever dividends its directors – all politicians – choose to pay.”
This is in direct violation to the Constitution and the Fiscal Management and Accountability Act which state that monies should be placed in the Consolidated Fund, from which it can only be withdrawn with parliamentary approval.
Another questionable transaction was the dealing with the property, 6.88 acres at the north western side of the Kingston seawall, which is slated for a Marriott Hotel.
This land is earmarked for the Kingston Atlantic Hotel Inc which is a 100 per cent owned subsidiary of NICIL and whose sole director is the CEO of NICIL.
“It would be hard to find a more improperly interconnected relationship even in a private setting. NICIL is 100 per cent state-owned. There is no indication that NICIL will become compliant with the Companies Act 1991 or the Public Corporations Act or have its annual reports laid in the National Assembly by its subject Minister who is the Minister of Finance,” the accountant argued.