HDC launches billion-dollar mismanagement probe

DA­REECE PO­LO

Se­nior Re­porter

da­reece.po­[email protected]

Hous­ing De­vel­op­ment Cor­po­ra­tion (HDC) chair­man Feeroz Khan has al­leged sig­nif­i­cant fi­nan­cial mis­man­age­ment at the state-owned agency, which he said oc­curred un­der the pre­vi­ous ad­min­is­tra­tion.

Khan said the HDC is now in a dif­fi­cult fi­nan­cial po­si­tion, with bills owed to con­trac­tors and sup­pli­ers in ex­cess of $600 mil­lion, a deficit in the em­ploy­ee pen­sion fund of more than $300 mil­lion, and bank over­drafts ex­ceed­ing ap­proved lim­its by about $100 mil­lion. He al­so said the cor­po­ra­tion has close to $1 bil­lion in re­ceiv­ables that may be ques­tion­able.

De­spite the scale of the chal­lenges, Khan said the HDC has a clear strat­e­gy to sta­bilise its fi­nances.

“All our fu­ture con­struc­tion is go­ing to be on the ba­sis of de­sign, build, fi­nance at fixed prices, so those over­runs and vari­a­tions and the mis­man­age­ment would not hap­pen. Those month­ly main­te­nance con­tracts that amount to $150 mil­lion a year now are be­ing re­or­gan­ised and re-ten­dered in ac­cor­dance with the rules and some of these ser­vices are go­ing to be pro­vid­ed in-house by the HDC, and we will save $100 mil­lion an­nu­al­ly from the man­age­ment of these con­tracts,” Khan said yes­ter­day dur­ing a Unit­ed Na­tion­al Con­gress me­dia con­fer­ence at the par­ty’s head­quar­ters in Ch­agua­nas.

Khan said the cor­po­ra­tion’s cur­rent fi­nan­cial state de­vel­oped over time and was the re­sult of poor con­struc­tion man­age­ment over the past decade.

He al­leged that, on av­er­age, 400 homes were built an­nu­al­ly un­der the Peo­ple’s Na­tion­al Move­ment (PNM) at an es­ti­mat­ed mar­ket val­ue of $500,000 each, but con­struc­tion costs es­ca­lat­ed to about $2 mil­lion per unit. He said this ap­plied to ap­prox­i­mate­ly 4,000 homes, with con­struc­tion av­er­ag­ing about $1.5 mil­lion per house.

“That’s a to­tal of $6 bil­lion. That $6 bil­lion could have built 12,000 hous­es, which would have great­ly made it eas­i­er for those cit­i­zens who have been wait­ing in line for years to get an HDC house.”

He fur­ther al­leged that main­te­nance con­tracts were rou­tine­ly is­sued with­out ten­der and award­ed to friends, fam­i­ly mem­bers and fi­nanciers linked to the for­mer ad­min­is­tra­tion, at a cost of about $150 mil­lion per year. He said mil­lions of dol­lars were spent each month on grass-cut­ting con­tracts in Cou­va.

“I don’t think Cou­va have enough grass to be worth $760 mil­lion that we have to cut grass in Cou­va.”

Khan list­ed sev­er­al com­pa­nies that re­ceived pay­ments to cut grass near hous­ing de­vel­op­ments, in­clud­ing one that re­ceived more than $300,000 month­ly to cut grass near the Roys­to­nia EC­CE Cen­tre close to the Cou­va North Hous­ing Project. Oth­er com­pa­nies re­ceived pay­ments of $12,000, $18,000, $26,000 and $60,000 re­spec­tive­ly.

He al­so re­ferred to an­oth­er com­pa­ny which he said was be­ing paid $80,000 per month to cut grass. An­oth­er com­pa­ny, he said, billed the HDC near­ly $500,000 per month, about $6 mil­lion per year, for garbage col­lec­tion and grass cut­ting, to­talling rough­ly $60 mil­lion.

“This is what has brought us here,” he said.

Khan al­so said the HDC owns sev­en malls near hous­ing de­vel­op­ments that gen­er­ate rough­ly $1 mil­lion an­nu­al­ly in rental rev­enue but cost about $10 mil­lion per year to main­tain.

“Make that make sense. Ten years of man­ag­ing these malls, $100 mil­lion gone down the drain. How many hous­es we could have built with that?”

He fur­ther al­leged that the HDC over­paid cer­tain con­trac­tors and sup­pli­ers by more than $20 mil­lion over the past decade, in­clud­ing one con­trac­tor who was over­paid by $10 mil­lion, with no ef­fort made to re­cov­er the funds.

Hous­ing Min­is­ter David Lee al­so is­sued a warn­ing to cit­i­zens il­le­gal­ly oc­cu­py­ing state-owned hous­ing, sig­nalling that it will not sup­port squat­ting on HDC prop­er­ties.

While Khan had ear­li­er in­di­cat­ed that reg­u­lar­i­sa­tion formed part of the HDC’s plan­ning con­sid­er­a­tions, Lee said the board was mis­led by an out­dat­ed pol­i­cy draft­ed un­der for­mer hous­ing min­is­ter Camille Robin­son-Reg­is Robin­son-Reg­is’ tenure.

He said his Gov­ern­ment’s di­rec­tive is that reg­u­lar­i­sa­tion will not pro­ceed and that il­le­gal oc­cu­pants will be held ful­ly ac­count­able.

“In­di­vid­u­als who il­le­gal­ly oc­cu­py HDC homes will be re­moved if they oc­cu­py those homes by break­ing in­to those homes and tak­ing oc­cu­pan­cy. That is a no-no un­der this gov­ern­ment. We will not al­low that law­less­ness,” Lee said.

Lee said re­ports of il­le­gal oc­cu­pa­tion were re­ceived over the past week in Green­vale, Oa­sis Greens and Cashew Gar­dens.

“That is a non-starter. It will not hap­pen un­der­neath my watch or un­der­neath chair­man Khan’s watch or un­der the Prime Min­is­ter, the ho­n­ourable Kam­la Per­sad-Bisses­sar.”

He said the HDC’s se­cu­ri­ty di­vi­sion is in­ves­ti­gat­ing ar­eas of il­le­gal oc­cu­pan­cy and that en­force­ment ac­tion will fol­low as the law takes its course.