Dart deal risks remain as talks continue
Kimpton Hotel, Grand Cayman
(CNS): The ongoing re-negotiations between the Cayman government and Dart over the controversial NRA agreement still pose risks to the public purse, auditors revealed Wednesday. During the Public Accounts Committee hearing Wednesday, as members questioned Alan Jones, the chief officer in the planning ministry about the lessons learned from the audit report that found the deal to be unlawful, the committee heard that the current talks are still posing risks as the necessary framework and processes are still not being followed.
The continued closed-door negotiations, the failure of the planning ministry to adopt and implement recommendations, ongoing work before the deal is done and the direct involvement of ministers were just some of the problems raised by the acting auditor general and his team.
During intense questioning of Jones by PAC Chair Ezzard Miller in particular about the findings in the auditor general’s report, the chief officer said that the re-negotiations with Dart over the third agreement broke down before the 2013 elections. The current administration restarted the talks in an effort to renegotiate the whole deal but those negotiations have gone on for more than two and a half years with no final agreement reached.
Jones said trying to renegotiate a deal that the developer sees as a legally binding agreement had been “a torturous road” and the negotiations have been very challenging. He felt, however, that the proper processes and laws were being followed and that his ministry was directly involved. Although ministers were attending talks for policy direction, Jones said they never did so without technocrats being present.
He told PAC that lessons had been learned from past negotiations that led to the agreement in the first place, and agreed with the deputy governor’s position that civil servants have to start being brave and tell ministers when they are not doing things the right way. Confident that things were being done by the book this time, he said that the ministry was in constant talks with the Office of the Auditor General to ensure they did not “unwittingly stray off the path and pick up errors early”. However, he said he did not agree with the OAG that the deal with Dart was unlawful.
Despite his confidence that things were going correctly now, as he was questioned by Miller it became clear that was not necessarily the case as there was no arrangements over who would be responsible for ensuring the deal was fulfilled or that the concessions were properly managed or in line with legislation, or that the developer’s obligations were fulfilled. It was also clear that no criteria for enforcement and accountability had been established or that there was a single person in control, all of which caused concern for PAC members.
There also appeared to be nothing in place to prevent the height restriction in the planning law being ignored again. Concerns have been raised that Dart’s Kimpton Hotel has circumvented planning laws and is actually twelve storeys, not ten, after the developer was allowed to raise the ground floor level. Jones implied that was all down to the interpretation of the planning law by the Central Planning Authority.
Asked about the current situation, Acting Auditor General Garnet Harrison said that his office had communicated their current concerns about the ongoing agreement negotiations, flagging the risk elements around the governance framework, including the continued involvement of ministers and that expenditure or giving up of revenue still has to go to the Legislative Assembly.
Martin Ruben, the OAG director of performance audits, said it was still questionable whether the current process is following the law on that point as the LA is the ultimate authority for all government spending. “When these agreements are negotiated and before they are signed technically to spend, collect or forgive revenue, it should be the LA that has the finally say,” he said.
Ruben and Harrison also pointed out that work was proceeding before the deal was done and there were still concerns over the management of the large duty waivers. They noted significant risk due to the failure of the ministry to implement the recommendations made by the OAG, though Jones said he believed many of the auditors’ recommendations could not be implemented without changes to law and policies.
In a perfect world, Harrison said, these kind of deals needed to be brought to the LA, where they can be publicly debated in a transparent and accountable manner. He pointed to the requirements in the Public Management and Finance Law and the Constitution, the need for a better management model, as well as more clearly defined and documented roles for the administrative and political arms of government and ensuring civil servants were empowered to fulfil their roles.
Harrison said there are still too many gaps, especially with public private partnerships like the NRA agreement with Dart, because they are not being well defined and there is no framework to govern them.
Category: Government oversight, Politics
Be very thankful that we have DART – their developments are of exceptionally high quality and ALL persons are permitted to use them as long as they conduct themselves appropriately. Dart gives so much back to this country/community for free. Think of it like this we could be stuck with the Chinese like Jamaica who are developing roads but acquiring properties all over the country and giving back nothing to the people to enjoy for free.
When is Government going to start doing there share of the Esterly Tibbetts highway from Lakeside to the Butterfield roundabout?..Dart will have his done in no time and we will have four lanes dumping into two lanes for about 2 miles..this will be an absolute bottleneck and traffic jam every day…
Read the deal…. Dart is going to do that too but government will pay them for it.m problem is, government keeps moving the goal posts on the Dart deal so I don’t blame them for not starting it…
don’t hold your breath….they can’t even do a simple widening of bobby thompson…..
btw that bottleneck will be exactly what esterly tibbetts will be like….10 times worse….
Dart will be grinding rocks for a long time if they think they can rid the sea of rocks. These rocks come and go, with the tides, ebb and flow of the sea etc.
Just rename your island to Dartland and get it over with.
Have any of our politicians looked at Dart’s wikipedia page? The man is labelled as a “vulture-capitalist” – yes, ‘vulture’… any other words he flies and circles above a dying Government strained under Debt and swoops down and picks and picks and picks at it during its most vulnerable stage – right not the Cayman Islands and its Government, with the weak-back sitting politicians have no fight left to fend of this vulture.
However, I am not one to think the Darto has not done magic for the Cayman Islands – but let’s face it, he has not necessarily done it with the people in mind – he is a business man and it is his job to invest for profit and to keep any partnering investors happy- this is not a charity set-up with this man!
Where our not-so-insightful or innovative Government officials lack is the realization that the law is above all and as legislators of such, they have the ability to put breaks on anything and everyone if playing the cards correctly and not being intimidated by a panel of private attorneys and investors.
At the end of the day, regardless of the bad press and corrupt Caymanian FIFA dudes and financial institutions – this little land is not going to be shut-down anytime soon and many corporations take great pride and pleasure in setting up shop here – trouble is the Government seems to feel they have to beg or bend-over to interest these people and now the globe over these investors realize that our officials are push-overs and they come in with well-drafted “offers” to our officials as if we need them more than they need us (the $30 million in duty-waivers to Beach Bay resort for example) – where else did they intend to build if we had told them to cough up their dues?
We are sacrificing money that our country desperately needs in order to regain its independence from the vulture-capitalist – another resort on Seven Mile Beach?
No sah, I would insist he haul those construction plans to that nice East End plot he bought a few months ago! Why Not?
Why continue to over-develop what already looks like a mess of no real plan? Are we trying to tip the island to one side or something? Send some development east if we must develop so that if we achieve anything, it will at least be some form of evenly developed country instead of this lop-sided mess we are creating!
Here’s a productive suggestion:
CIG should ask Dart to invest in a University here, bring in some high quality professors, build some global prestige, and of course locals would get preferential admissions.
That way, good kids don’t have to leave the island to get a quality education, and perhaps never come back when they see what the rest of the world has to offer. Vice versa, good kids from other parts of the world could be drawn to come here for their education.
Would we welcome them?
“We are sacrificing money that our country desperately needs…” Here is the catch 22 – you think it is money we desperately need but how do we get it without sacrificing some money. Perhaps you have difficulty understanding the concept involved with “sacrificing money” – it is not money we have in the bank it is money that we will earn ONLY if the project goes ahead ie we have to give up some future money to get some more future money.
The problem is our Government told us that we were “sacrificing” money now for what will be made in future on so many occasions that it is obvious their judgement cannot be trusted!
For example, the CI Turtle form was slated to produce a certain amount of millions within 10 or 15 years (news articles on the internet to confirm this) – however the place has been losing money since opening day… the Ritz was suppose to bring so much benefit (and yes it very much has), but to whom?
Long-term investment (or fiduciary sacrifice) is all well and dandy when a Government already has their stuff straight, but for one that is in the whole with deep denial, the policy of “no charge now for profits later” cannot and should not be allowed for every single investor that calls on Cayman with a project – especially since they obviously chose Cayman for their own reason.
A 50% or some agreed percentage discount would not be as ridiculous, but waiving an entire sum of duties for billion-dollar investors is foolish and I am very confident other terms could have been negotiated.
However, it is quite pleasing to know that these bozos do not have an additional $30 million to split, swindle and misplace all the same.
Carry on..
Face it. Dart owns the Cayman Islands government.
Well if that was the case, then why can’t he get the dump moved? Checkmate.
Why would Dart want to own something that is a failure at everything but making a small fortune out of a big one? The Caymanian people own the Caymanian government. They are responsible for it.
This is all smoke and mirrors as we hurtle towards our new passports.
I am sure there must be a Law on the books against bring in projects on time and on budget.
Money talks, and the money bin is bottomless.The vulture flies too high for the little pipsqueaks of the Caymans to control. There has been enough money available to swing any member of CIG over to his side and as long as there are closed-door meetings everything will remain the same. Yes, MONEY TALKS!!!
We must hope that the CPA Chair excluded himself from all Dart talks since he sold Dart property namely the old World Gymn building.
Wrong again.
What about the hotel licence issued in Cayman Brac without the proper inspections and not in compliance with the laws of the land. There is not even planning permission for this hotel. As this hotel licence is not legal why did a civil servant sign and issue the licence
What that again give it up it has no more traction
No traction? Would you want to stay in a hotel that has not been inspected and passed by the three government departments: Fire, DEH, and Tourism?
You mean the hotel that had a few business jets of guests this past weekend? I right with you. I think we should close down the only person who is investing anything in Cayman Brac.
Investing huh? How much are you being paid? Cayman Brac has many businesses that actually contribute to the island and the money gets circulated. This hotel doesn’t employ any Caymanians, has their own planes, vehicles, boats, grows own produce so basically no money is circulated on island. They have their own gated community and yes, it’s a very high wall. Hopefully, she’s paying taxes to Customs and not getting breaks like DART otherwise all the money is leaving the Cayman Islands.
But hey I guess it’s okay. She can break all the rules as long as someone is getting money. Isn’t that the same problem that you have with DART?
Investing??? Interesting that’s what you call it. Would be interested to know if they even paid to stay at this place. Most people who stay there are non paying guests??? check the hotel board to see if and when the government room tax has been paid if you doubt me.
in dart i trust….
So how did they explain the abject failure to deal with the pathetic National Development Plan?
DART owns this ppm government just as much as it owned the last udp just look at the decisions made by Cabinet. Ministers are still directly negotiating with DART in private despite recommendations of the OAG.
One Chief Officer did stand up to a Minister…over a phone bill…and look how she was treated. More needs to be done about interfering Ministers.
More importantly look how the Minister was treated. Alden swept it under the carpet like a coward when Ossie’s racism should have led to him being fired.
True but other chief officers allowed millions of dollars of our money to go out through the door without reviewing a contract.
So, who’s responsible this time??
Does it matter? No-one will be held accountable. Just pick a name at random if it helps.
I have to say that the auditors sound a little over the top on the Dart deal. Ministers should definitely be involved, not just a pack of civil servants. If they can get a new deal they can bring it to the LA or the cabinet to get duty waivers, as has been done already. Future management of existing duty waivers across the board is a different question and should be being dealt with by those civil servants.
zzzzzzzzzzzzz
Never heard of a mess like this , but I can see it all .