The following is the key points summary of the Angus Commission, which was appointed by Prime Minister P J Patterson to probe the operations of the National Housing Development Corporation (NHDC) and its Operation PRIDE projects. The commission said it received several corroborating statements during the period of consultations and interviews, from varying stakeholders in the PRIDE process, some of which are listed below:

1 All projects were transferred to the NHDC in 1998. The NHDC realised that it did not have the financial and technical capacity to deal simultaneously with all of them. So a proposal was made, which the Cabinet approved, to focus with all of them. So a proposal was made, which the Cabinet approved, to focus on a priority 20 projects; the remaining 91 to be deferred for completion over a four-year period. However, if the relevant IPS (Independent Provident Societies) made sufficient contributions, the NHDC would help, through financial contributions, to cover the costs of planning and designs, but not construction. No NHDC-funded construction took place on those projects during the period 1998-early 2000.

2 Contract sums are based on anticipated expenditure. Deposits are not taken into account in determining loan sum. Deposits are treated as advances against payback to the NHDC for loans granted.

3 The NHDC Accounts Department does not believe that the checking for regulatory approvals, meeting loan agreement conditions, etc, is part of its function. The department looks for payments in excess of contract sums, missing signatures, etc, and flags those things for follow up with requests for explanation and/or rectification prior to disbursement.

4 Although on the face of it, the NHDC is in charge of PRIDE, most decisions were externalised to the Ministry of Water and Housing (MWH). CECL (Caribbean Engineering Corporation Limited) “directed traffic” in a major way and Evon Robinson usually decided who got what work, when it starts, etc. At any given moment the NHDC may be presented with bills for payment. The programme seemed to be using the “rapid response” mode as an excuse to begin work without proper documentation and controls.

5 If payments exceed contract sum, CECL simply instructs legal (department) to revise upwards the construct sum and the loan agreement without any of the proper controls, checks and balances. On one of the St Ann projects (Belle Air), CECL said it instructed a change in contract sum/loan agreement because the MWH needed water to get to a particular community and so it used this project to get it done.

6 At hand-over time, the NHDC looks at the full cost of the project and realises that lots are two to three times more costly than comparable NHT (National Housing Trust) developments and that prices are out of reach of target markets. This realisation usually in a ministerial subsidy to bring the selling price back down to reasonable levels and the NHDC suffers that loss. Subsidies flow from the minister’s removal of land, administrative, water and/or sewerage costs from the total project costs to come up with a final selling price. Last year’s subsidies were in excess of $800 million.

7 Payments were made on the Barrett Hall project in the absence of required contractual agreements.

8 Bills of Quantities are blank or incomplete on many projects, and contracts are under-valued.

9 In most cases, when the first indication of pricing occurs, drawings, surveys and designs are not yet complete. As a result project costs will exceed contract sums.

10 If the information was available and a proper pricing done, it is unlikely that many of these projects would have been allowed to continue.

11 Lot pricing strategies include a standard price of $460,000 per lot, irrespective of considerations such as terrain, which can cause significant price increases.

12 In many instances, pressure to make payment to contractors comes directly from the minister of water and housing.

13 The mortgage department is primarily idle, while NHDC pays Daly, Thwaites and Company to do the work. In one instance, when it became clear to NHDC that Daly, Thwaites was collecting monies from the IPS and NHDC for the same work (and still not producing the contracted output), the accounts department was instructed to withhold payment. However, payment was subsequently released on the instruction of the chairman of the board. In another instance, Daly, Thwaites was found to be submitting invoices for work for which the company had previously been paid. However, this was discovered after duplicate payment had been effected, and Daly, Thwaites agreed to work without payment in respect of the repayment owed to NHDC. The situation re-occurred and Daly, Thwaites was terminated by NHDC, but subsequently reinstated at the instruction of the chairman of the board.

14 The independent consultants’ report has some genuine excesses, but it points overwhelmingly to the fact that something was very wrong.

15 While PRIDE may be better administered if the contractors/consultants were answerable to and engaged by NHDC and not the IPS, the problem is more profound. Consultants/contractors would never begin work without receiving an indication either from NHDC or the MWH that payment will be effected. They are well aware that payment does not come directly from the IPS. Further, consultants are generally paid on a percentage basis, and so it is in their best interests to do elaborate and costly designs, for example, 60-foot wide roads in Whitehall.

16 Direction comes from the ministry as to who should get paid, how much and when.

17 “Beneficiaries” get no benefit when they cannot afford the high selling prices, even after subsidy. Therefore, the lots go to the open market for sale. Even if full recovery is made on the open market, this is not the purpose of Operation PRIDE.

18 The Minister of Water and Housing and/or Mr Evon Robinson select(s) the site, identifies consultant (usually Mr Robinson) and contractor (usually the minister). This is the contract award system.

19 There are too many projects in the programme, with more being added each week. In all fairness with the current level of resources of the NHDC, it is impossible to properly monitor all of them and to ensure credible results. The revolving fund has no time to replenish itself with 90+ projects under implementation at any one time.

20 There is a “brotherhood” or on-the-ground network of communication among the IPS that facilitates the PRIDE operation. The NHDC’s Technical Service Department was not accepted as part of the communication network, but Evon Robinson’s group — having become familiar through on-site representation — was part of that network, and gained the trust of the IPS. The government must have that kind of foothold on the ground or the programme will not work.

21 Contractors give money to provident societies to ensure that they use their services.

22 NHDC needs to realise that cutting corners cannot speed up a project. It’s going to cost more in the final analysis. For example, the topography on Belle Air was received when the contract was already 50% complete.

23 NHDC’s cash flow problems delay work on sites. As a result contractors frequently claim for extended preliminaries, which in turn increase project costs.

24 With the change of minister in 2000, NHDC’s plans approved by the board and the former minister of environment and housing for reformulating the implementation of PRIDE in a sustainable manner and allowing for improved expenditure control were put aside in lieu of a now way forward for NHDC as instructed by the minister of water and housing.

25 The NHDC’s cash flow problems were caused, primarily by the pace of development, constant addition of new projects, and the inability to make full recovery due to reduced selling prices.

26 The permanent secretary is abreast of what was happening with PRIDE. He was also involved in decision-making, and when no board was in place during the period March 2000-August 2000, he signed authorised payments on Riverton, Melrose and St Benedicts projects. In some instances Evon Robinson, who reports to the permanent secretary gave direction to the NHDC regarding payment to contractors.

27 At project completion, the minister of water and housing gets a report from NHDC identifying full costs by components, a recommendation from NHDC to reduce or remove certain components, and a recommended selling price. The minister makes final decision. For example, the minister instructed the removal of land, admin, water and sewerage costs from Melrose lots. Further, subsidised lots can be re-sold on the open market at significant capital gain to the seller.

28 Initially the NHDC made genuine attempt to reconcile selling prices with socio-economic surveys, but this fell apart under the pace of the minister’s programme. The minister, more than once, instructed to “let the paper-work catch up to the construction”.

29 During early 2000 and following the change of minister, work commenced on a number of the previously deferred 91 projects. When the new board was constituted in September 2000, it found that, irrespective of the Cabinet’s decision instructing to the contrary, several additional projects had begun implementation; some in the absence of or inadequate critical technical work, thus returning NHDC to a situation that had it previously taken almost two years to overcome, prior to deciding on a sustainable way forward for the organisation and the PRIDE programme. Further new projects, outside of the previously identified 111 sites, were frequently added.

30 Letters were written to the minister of water and housing informing of NHDC’s discontent with the current practice by the ministry of adding new projects to the portfolio and the commencement of implementation without reference to and/or approval of the projects sub-committee of the board. The minister was also repeatedly informed of the NHDC’s financial position both orally and in writing. His response was that Operation PRIDE is a priority programme for the prime minister and that NHDC should not be overly concerned about its financial situation because the Cabinet would instruct that the necessary financial resources be made available.

31 The minister of water and housing subsequently agreed that there were to be no new projects without reference to the NHDC projects sub-committee. However, a few weeks following on that directive, new project bills came to the NHDC for payment. The bills came from provident societies, but were routed through the ministry. The NHDC has refused payment because it did not approve start of any of these projects. To date, there is approximately $200 million in unpaid bills with respect to these projects.

32 Due to the futility of full financial recovery with respect to monies expected on projects, particularly in respect of the frequency of reduced selling prices, there was and, in some ways, still exists a “feeling” among the NHDC staff that Operation PRIDE is a government “give-away”. This has contributed to the cultivation of nonchalance in ensuring the existence, accuracy and proper execution of sale agreements, loan agreements, and other critical pre-construct documentation. The pace of the minister’s programme exacerbates this situation.

33 Fisher Road, Cover and Wentworth show that the programme can work well, but only if the proper procedures are followed and in the correct sequence. The omission of critical stops will result in serious difficulties on the projects.