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THE BOND DEAL

Aug 14, 2016 Features / Columnists, Peeping Tom

The New GPC cannot and should not be blamed for the decision by the Ministry of Public Health to rent a facility for 12.5 million dollars per month with a deposit of two months rental up front, a sum that was equivalent to the purchase price of the facility.
The price quoted by the New GPC was for a much larger facility and, when worked out per square foot, is many times lower than what the Ministry is now paying for the facility in Sussex Street.
There are a number of aspects of this deal which are controversial and which justify a much fuller, detailed and independent investigation. The need for storage could not have been urgent after fifteen months of a new government. You had fifteen months to know that storage was a problem. The matter should have gone to tender.
But even if we assume there was an urgent need, a tender could have been hastily put out asking for a short-term arrangement. There must be companies which import large quantities of medicines and which have to store these. They must have existing facilities, and a reasonable rent could have been had until a permanent solution was found.
The fact, however, remains that there was a quotation provided by one such company, which in terms of cost per square feet was less than a quarter of the price which the government now has to pay.
The government did not need to ask to rent the whole of that bond. It could have asked to rent the exact space that it wanted, which would have ended up costing far less than what it now has to pay. There may have been other places which could have given an even a better deal, but you can never know unless you go to tender.
We must not forget, also, that for years the New GPC, had previously been the main supplier and had for years been supplying storage free of cost, no doubt as part of that arrangement. If there was an urgent need, what harm was there in negotiating a short-term rental arrangement with the New GPC, which in any event was offering a price which was more than four times less than what was being paid. The New GPC could have been invited, under an emergency selective tendering process, to submit a bid.
How was the rental price arrived at with the new company? Why pay multiple times per square foot than what was being asked by the New GPC? Who decided on this $12.5 million per month rental?
Even if we assume that there was an emergency which necessitated the Ministry bypassing open and selective tendering processes, why pay such a high price?
It would be interesting to know if the government is paying any other company such a high rental, and if not, why this did not raise a red flag within Cabinet. If I come to you with a proposal to pay $12.5 million dollars per month in rental, an explanation as to why such a high rental had to have been given is basic. What was the explanation given?
This deal does not smell right. The government needs to get to the bottom of it. Right now the Minister of Public Health is taking a lot of flak for it, but it may not have been his fault. This is why there needs to be a full investigation, not a 48-hour report into the matter.
Why was the Auditor General’s Office not called in to do an investigation? Why did Cabinet choose to involve itself in this matter when it was the one which, it is said, consented to the deal? Cabinet should have been more interested in whether it was misled in granting its approval to the deal.
There are thousands of supporters of the government out there who are privately saying that the government is, with each passing day, embarrassing itself. These supporters are worried about what is going on, and believe that the right action is not being taken in these matters. They are genuinely worried about the leadership within the government.

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