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THE UDECOTT OFFICE PROJECTS
The sense of things

Published Thursday 17th July, 2008

Policy has never been put to the public for discussion or comments. In a democracy, that method of proceeding with major policies is incompatible with the fundamental ideals.

We are faced with the strategic move towards owning and not renting occurring alongside contradictory moves.

It is clear that the Udecott has significant supporters and not just within the ranks of the party in power. One of the most frequently heard arguments in support of the Udecott programme I have been criticising is that there really are important strategic goals which this programme will achieve.

The point of those supporters being that, even if you leave out all the financial details and criticisms set out in previous columns, there is considerable merit to the strategy. The strategic intention is stated as being to improve the standard of both the offices occupied by civil servants and, at the same time, upgrade our capital. There is also an additional advantage in that at the end of the day, the buildings will belong to the State, so there would be no rent to pay in the future. That is progress, say the supporters, and that can never be cheap. After all, our country has the money now and there is no better time to make these advances. Some even drive the point home by saying that any good businessman would prefer to own than to rent.

The reply is as simple as it is worrisome.

There are three obvious contradictions to the policy in terms of actual actions.

l        Policy has never been put to the public for discussion or comments. In a democracy, that method of proceeding with major policies is incompatible with the fundamental ideals.

l        We are faced with the strategic move towards owning and not renting occurring alongside contradictory moves. The largest of the new private office developments in the capital is in the Broadgate Place Project to be developed by Transcorp Credit Union at South Quay. The Prime Minister turned the sod for this project on April 9 2007 and during his address, he stated that “...the Government is supporting the project through the granting (sic) of a head lease of all the office space in the building.”

This important statement can be accessed at http://www.opm.gov.tt/news/index.php?pid=2001&nid=sp070409-3

Broadgate Place is to contain 341,000 sq ft of office space. Additionally, we have to consider unconfirmed reports that the State might have entered as yet unpublicised commitments to occupy a large portion of privately-built offices.

l        One has to consider the fact that the costs of these office projects are being borrowed as shown in Udecott’s accounts. We are not, in fact, building with the windfall funds, but by borrowing. That point will be expanded upon when we have sight of the 2007 Udecott annual report.

Last week’s Business Guardian editorial started to explore the implications of some of these borrowings and it is interesting to consider the balance of power between a borrower and a contractor which is allied to the lender.

Financial literacy for the Cabinet?

The Central Bank has embarked on a National Financial Literacy Programme. This critical information is shared through the media and in my view is a positive contribution to national development. The programme makes creative use of simple slogans and one of these caught my ear the other day: “loans should only be taken for essential purposes.”

Of course we know that in today’s market, people are encouraged to take loans for everything—from Carnival costumes to vacations—but that is now a fact of life. It is interesting to note that the unproductive and unprofitable office projects now being erected are being financed by loans. What a thing!

Afra Raymond is a director of Raymond & Pierre Limited. Feedback can be directed to afra@raymondandpierre.com.

Afra Raymond - Property Matters

The Central Bank has embarked on a National Financial Literacy Programme. This critical information is shared through the media and in my view is a positive contribution to national development. The programme makes creative use of simple slogans and one of these caught my ear the other day: “loans should only be taken for essential purposes.”

Of course we know that in today’s market, people are encouraged to take loans for everything—from Carnival costumes to vacations—but that is now a fact of life. It is interesting to note that the unproductive and unprofitable office projects now being erected are being financed by loans. What a thing!