November 19, 2014
Based on new information that has come to light since their last release on the matter, the Jamaica Chamber of Commerce (JCC), Jamaica Manufacturers’ Association (JMA) and the Private Sector Organisation of Jamaica (PSOJ), are expressing heightened concerns about the National Housing Trust’s (NHT) decision to spend J$180 million to purchase Outameni.
On November 6th, based on the view that the NHT had purchased Outameni as a going concern with the intent to operate it as an attraction, the groups questioned the NHT’s purchase decision and expressed a lack of confidence that the NHT could possibly turn around the attraction and make a profit from a loss making venture which had previously been run by private sector interests.
Since then, despite some conflicting statements, the JCC, JMA, and the PSOJ’s concerns are seriously heightened by some of the additional information that has come to light:
- That the Government had in 2006 invested in Outameni through the NIBJ/DBJ, and in 2013 had to write off J$76.4 Million.
- That the NHT has so far purchased only the property and buildings on the property, all of which have been subject to a valuation that even further clouds the issue.
These revelations have heightened our concerns for the following reasons:
- The fact that the NHT bought a property when a Government entity, the NIBJ/DBJ, had previouslyprovided for a substantial investment in the sameproperty, having not ever received a cent in dividends, shows extremely poor judgment on the part of the NHT and a weak approach to risk analysis of a commercial investment. We have to ask why in doing the deal there has been no evidence yet that the NHT demonstrated a will to recover funds due to DBJ.
- Additionally, the valuation of the property and buildings lists the value of the land itself as only $12.7 Million, and the buildings and infrastructure make up the rest of the valuation. The buildings and infrastructure that form the attraction have been publicly described in a letter from the former principal of Outameni, who has stated that, “the site is built as a heritage attraction which was architecturally designed to house this specific concept. It has limited usage otherwise.”
- Put another way there is no return on investment whatsoever, and in fact most probably a loss, in the purchase of just the land by the NHT for J$180 million, unless they plan to operate profitably the property as a commercial attraction of similar type to the Outameni Experience.
The JCC, JMA, and the PSOJ have previously clearly stated our lack of confidence that the NHT can make such an attraction venture profitable, and therefore now question even more forcefully, the judgment and business logic of the NHT in making such an investment.
In light of the foregoing governance concerns, and the fact that this controversy is distracting the nation from focusing on other critical economic and social issues, the JCC, the JMA, and the PSOJ renew and strengthen our call for urgent and speedy investigations into the NHT in this matter. We note positively that the Prime Minister has asked the Auditor General to investigate and we ask for this to be done speedily, but we have heard nothing officially from the Office of the Contractor General (OCG) who in our opinion has a major role to play in this matter.
Accordingly we urge the Prime Minister to also use her good offices to welcome the OCG to immediately investigate this matter.
Contact: Ms. Kareen Cox, Marketing & Public Relations Manager, PSOJ
Tel: 927-6238 (Ext. 2052); Fax 978-2709