Kamla reveals $M sweetheart WASA deal

Opposition leader Kamla Persad-Bissessar on Thursday called on the government of Trinidad and Tobago to stop the award of contracts during a general election campaign.

Speaking at a news conference at her office in Port of Spain, Persad-Bissessar noted that Prime Minister Patrick Manning is repeating what he did in 1995 in the days preceding the election which he called ahead of schedule and lost to the UNC/NAR coalition.

She said five days before the 1995 general election the Manning government awarded "a sweetheart contract requiring taxpayers of this country to pay TT $570 million to Severn Trent for ambiguous deliverables."

She said, "This country was forced to stick to the arrangement for three painful years. Today, fifteen years later, we see a repeat of the same sad story."

The UNC leader said the government has now rushed to sign another multimillion dollar contract with a foreign company, "and once more under conditions and circumstances which can best be described as nebulous, and once more detrimental to the national interest."

She said according to information contained in Cabinet Minute No. 327 dated February 11th 2010, the Cabinet agreed to approve the Management Action Plan (MAP) of the WASA, and authorized WASA to seek TT$ 2 billion financing in order to meet the obligations under the short term 18 months of the plan.

She added that at the last cabinet meeting on May 13th 2010, the Cabinet agreed to give Citicorp Merchant Bank the mandate "to arrange and fully underwrite a TT dollar fixed rate 20 year bullet bond in the sum of TT$1.35 billion to be issued by WASA."

She added that Citicorp Merchant Bank has also been awarded a mandate by the Government to arrange an interim six month Bridge Facility in the sum of $1 billion.

"I am advised that the Ministry of Finance was authorized by the Cabinet to issue a Letter of Comfort to support the obligations of WASA to meet all interest and principal payments under the interim six month Bridge facility," she said adding that "the Minister of Finance will provide a Government Guarantee to guarantee the obligations of WASA to meet the relevant interest payments."

The UNC leader showed reporters a letter dated May 17th 2010 signed by Jacqueline Ganteaume-Farrell, the Permanent Secretary to the Ministry of Public Utilities to Andrew Smith the CEO of WASA that she said clearly confirms the arrangements.

She said an industry specialist has examined the documents and he raised concerns about whether the bank was chosen on the basis of sole selective tendering.

That, she said, raises the issue of a transparent tendering procedure for the provision of this service. "This is important because our expert’s analysis suggests that the cost of borrowing was higher than conventional standards," she said.

She raised a red flag by asking "who gets the minimum $54 million arranger’s fee and any other commissions for this financing" and invited journalists to investigate further.

"The important question for us today, is what is the purpose of this billion dollar transaction? Why the haste in pursuing it four days before a General Election?" she asked.

The UNC leader said the government is raising the TT$1.35 billion financing to finance the implementation of an Engineering, procurement and construction (EPC) contract signed between WASA and a company named Merhav Mekorot Development Trinidad and Tobago Limited (MMD).

She said Merhav Mekorot Development Trinidad and Tobago Limited (MMD) is an Israeli company incorporated on January 10th 2010 in Israel, and February 19th 2010 in Trinidad.

Persad-Bissessar said in September 2009, WASA signed an agreement with Merokot even before WASA officials visited the Merokot water facilities in Israel.

Then in January 2010, WASA and the Ministry of Public Utilities engaged the services of MMD and in April 2010 a TT$700 million contract between WASA and MMD was signed.

She said the one commitment required of the contractor MMD by the Government is that the contractor will try not to exceed the contract value. In return the government agreed to make an advance payment of 20 per cent of the contract sum which is TT$ 132 million, with $66 million to be paid within two weeks and the other TT$66 million required within 60 days of signing.

She said there are no safeguards in the contract and one clause states that the contractor's liability "shall be limited to 10 per cent" which means that the contractor can collect TT$132, do nothing and walk away with TT$66 million.

"So what exactly is Trinidad and Tobago going to get for TT$700 million?" she asked. She suggested that since half of the water produced by WASA is lost to leaks what is needed is a pipeline replacement program that would not foreign input, million dollar studies, new engineering designs or technical studies.

"It is an expenditure that will not improve the water supply. It is not transparent. This contract is unacceptable," she said.

The opposition leader called on the Prime Minister to stop the contract, calling the expenditure "an act of sheer madness" that is not in the people’s interest or the national interest.

She also called for an investigation into the award of this contract, saying it reeks of "conflict of interest and political manipulation."