A forensic audit ordered by the APNU+AFC government of state broadcaster NCN found no justification for a costly decision to move a transmission station from Sparendaam on the East Coast which later became an exclusive housing scheme for former President Bharrat Jagdeo and some of his ministers.
Since the inauguration of the Pradoville 2 housing scheme on the East Coast of Demerara and Jagdeo’s occupation of a prime section of it, questions have been raised as to the basis for decisions taken by NCN and the Central Housing and Planning Authority (CH&PA) which enabled the scheme.
It has been contended in some quarters that the sole purpose for the moving of the NCN transmission station at Sparendaam was to facilitate the plans of Jagdeo and others for an exclusive housing estate.
For NCN, it then raises the question of its justification for expending $185m to move the transmission tower from Sparendaam to the West Demerara.
The report of the forensic audit for the period November 1, 2011 to May 31, 2015 by Parmesar and Co which was recently released by the Ministry of Finance addressed the issue.
It pointed out that for years NCN had a transmission station at Sparendaam but that during the period 2009-2010 it was dismantled and relocated at Onderneeming West Bank Demerara. The total cost of the relocation was $185,553,394.
The auditor’s report noted that the relocation of the transmission station was executed by National Industrial and Commercial Investments Limited (NICIL), the parent company of NCN.
“We did not find any evidence that the (Board of Directors of NCN) nor management made any decision to relocate the Transmission Station. We were unable to determine the reason or benefit for the relocation of the Transmission Station”, the auditor’s report said.
The expenditure of $185m was later converted into share capital.
The audit report said that in March 2015 the audit of the Financial Statements for the year ended 31 December 2012 was completed and recorded the acquisition of the Transmission Station as an addition to equipment with a corresponding entry in equity as a deposit on shares of $185,553,395.
The authorised share capital of NCN at the time was $35,000,000 (350,000 ordinary shares of $100 each). In November 2013 NCN increased its authorised share capital to $237,863,100 (2,378,631 of $100 each).
The audit report said that the draft Financial Statements for the year ended 31 December 2014 shows the deposit on shares being transferred to issued share capital, increasing the issued share capital from $35,000,000 to $220,553,395.
A new share certificate for 220,553,394 ordinary shares of $1.00 each was then issued to NICIL on 11 February 2015.
The audit report concluded that no benefits were identified from this investment.
The transmission station relocation was also addressed in the audit of NICIL by former Auditor General Anand Goolsarran. One of the first audit reports to have been made public, Goolsarran said in his report that “The evidence…suggests that the removal and relocation of the NCN transmission tower were done to facilitate the housing development of the area. Instead of accumulating all the costs associated with the Sparendaam Project, including the market value of the land, in a special account to be applied in arriving at the price to be charged per house lot, NICIL’s board and Cabinet were complicit in charging the related costs of $257.049 million to NCN in the form of equity investment, and to CH&PA in the form of receivable. The fact that several key Cabinet members are the beneficiaries of the house lots, renders it highly inappropriate for the very Cabinet to approve of the charging of the expenditure to the accounts of NCN and CH&PA”.
In December last year, when he was asked to explain\, former NICIL CEO Winston Brassington had a different version of the events.
He told the media that NCN’s transmission tower under an agreement between the Government of Guyana and the European Union (EU), needed to be removed prior to the EU assisting in the funding for the expansion of the Ogle International Airport. According to him, the tower had to be removed as it was in the path of air traffic.
Brassington said there was a signed agreement of what needed to be done in order for the €1.5M grant to be processed and since NCN is a fully owned subsidiary of NICIL, the entity was charged with the removal of the tower.
“We have an agreement that was signed with the Ogle Airport where the government committed to one, in exchange for the European Union to (provide) monies for Ogle airport, that it would be caused to remove that tower which was in the flight path and a number of other commitments, squatters and so on for the Ogle Airport expansion and it becoming an international airport.
That was the driving reason why that antenna had to be removed from there,” he asserted.
This is contrary to Goolsarran’s finding that the evidence suggests that the removal and relocation of the NCN transmission tower were done to facilitate the housing development of the area.
