…privatisation was best option
On Friday June 8, former PPP Finance Minister, Dr Ashni Singh, and former NICIL CEO, Winston Brassington were further charged on the counts of misconduct in public office, this time for the sale of Sanata Textile Complex to Queens Atlantic Investment Inc (QAII) between October 20, 2010 and December 20, 2010.
The charge asserted that they “acted recklessly” when they sold the buildings on the parcel of land of 18.871 acres together for $697,864,800 plus VAT, (total $809.5M) even though the valuation came in at $1,042,403,500.00 and claimed the property was sold at a “grossly undervalued price”, thereby breaching their duties.
However, the public documents released by National Industrial and Commercial Investments Limited (NICIL) and seen by this publication disputes the charge. The information in the NICIL publications contends that the facts cited were cherry picked to arrive at the charge.
NICIL’s efforts to sell the Sanata Complex
In October 2001, a contract was executed with a Chinese company for the leasing of the dyeing and printing sections of Sanata Textiles Limited but in February 2005, the then Foreign Trade and International Cooperation Minister Clement Rohee and then Chinese Ambassador to Guyana Shen Quing signed an agreement for the handing over of the equipment and raw material for the textile mill. The company returned the Complex to NICIL and walked away. It did not take long for the complex to revert to bush. Even with NICIL providing security, vandals still invaded to steal wires and other moveables.
The financial drain on the Government was considerable with the annual upkeep costs in 2006 being almost $20 million: $8 million in security, $6 million in rates and taxes, and over $5 million in cleaning and miscellaneous repairs including perimeter lighting. The fees for the short-term leases for portions of the complex were never sufficient to cover the upkeep.
NICIL began running advertisements for lease of the Complex in the third quarter of 2006 and finally extended its self-imposed January 2007 deadline by February 28, 2007 by which time they had run 20, without any tenders, as attested by the Auditor General when the Bid Box was opened.
In accordance with the Privatisation Policy Framework Paper (PPFP) of July 1993, where an entity has been advertised and no bids received, direct negotiations could then be held. This was the case with the privatisation of Linmine to Omai in 2003 following the non-receipt of bids to the privatisation offers.
And at this point, according to Geoff Da Silva, head of Go-Invest, they heard that NewGPC was seeking to expand its operations but were constrained at its Farm EBD Location. He contacted NewGPC to solicit their interest for leasing the fast deteriorating Sanata facility.
QAII’s proposal
The New GPC, via its parent QAII, submitted a proposal in April 2007 to the Privatisation Unit to lease the Complex, and after intense negotiations a paper was submitted to the Privatisation Board in May 2007, which unanimously recommended approval.
This was then submitted to Cabinet, which gave its approval. It outlined a programme of gutting the buildings, removing the asbestos and the introduction of five business ventures, including a Printing Plant, within five years. The Privatisation Board approved a 99-year lease at $50 million per annum, with an option to buy within three years subject to certain conditions. At the time, Da Silva had noted that QAII’s willingness to clear up the hundreds of thousand square feet of carcinogenic asbestos roof sheeting was very attractive to the Government since this was a very dangerous and expensive proposition.
Upon Cabinet’s approval, QAII immediately embarked on its promised programme and reclamation, cleanup and investment. By 2010, having kept its side of the agreement QAII chose to exercise its option to purchase the property in accordance with the Lease Agreement. On May 30, 2007 QAII had requested and received a valuation of the property from the Government Assistant Valuation Officer, which proposed $330.375M (Land $269.200; Improvements $119.175M).
On June 7, NICIL had commissioned a valuation from the private firm of Rodrigues Architects Ltd, which posited that the property be valued at $1,042,403.500 (Land $209,650M; Improvements $832,753.5M). NICIL also obtained on June 27, 2007 a valuation of the land and its improvements the Government’s Chief Valuation Officer of the Government, which came in at $245.175M (Land: $130M; Improvements $115.175M.
QAII was responsible at their expense for the asbestos cleanup and removal of scrap alone, which they incurred at a cost above $400 million.
In accordance with the lease agreement, QAII had the option to purchase the property based on an average valuation of a valuator acceptable to QAII ($330.375M was obtained from QAII, Deputy Government Valuation officer) and one obtained by NICIL ($1,042,403.5M from Rodriques Architects).
This amounted to $697M plus VAT or $808 million VAT inclusive. The Government was pleased that Sanata moved from being a drain on the Treasury, to one providing employment, paying rates and taxes; corporate and income taxes and of course removing a haven for vagrants and thieves.
The final price of the property has been determined in accordance with the 2007 Lease contract that details the determination of the price per two valuations. There has been no deviation from this. At the time of the lease and again at the time of the sale, both the Privatisation Board and Cabinet approved the transactions. Numerous press releases and reports have been made public since the lease some 11 years ago and the property sale some 8 years ago. The charges against Singh and Brassington for the sale of Sanata, again cherry-picks information and ignores the facts of the matter.
Similar types of charges made against Singh and Brassington have obtained an interim stay in the High Court by Justice Holder. The charges against Singh and Brassington relies on the same Misconduct in Public Office: Contrary to Public Law.
