Thu | Sep 20, 2018

Garnett Roper | Petroscam! Follow the money trail

Published:Sunday | July 1, 2018 | 12:00 AM
Garnett Roper
The Petrojam oil refinery on Marcus Garvey Drive, Kingston.
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About a week ago, someone told me that JLP Minister of Energy Andrew Wheatley was going to resign or be fired by the PM the following day. I was told that PM Andrew Holness was under pressure by Cabinet ministers and elements in the private sector who demanded that Wheatley go because of malfeasance and scandals at Petrojam and elsewhere with his energy and telecoms portfolio.

I told them that it would not happen. Resignation or dismissal in the name of accountability is not a strategy the Jamaica Labour Party adopts. I also said that while Andrew Holness is popular on social media, he is not politically strong or secure enough to take such action.

Instead, I argued, the JLP will adopt its favourite strategy: to circle the wagon. This is exactly what they did with the Dudus saga in 2010. The JLP will launch a counter-offensive to deny and say, there is no evidence of wrongdoing at Petrojam or on the part of Andrew Wheatley. Then they will find some political red herring to deflect attention and change the narrative. This is JLP DNA: deny, deny, deny.

This is the path being taken by the Holness administration in the Petroscam matter. Up to now, the administration, in the face of mounting allegations about the injudicious use of taxpayers' money, has refused to give up one of its own.

What do we know so far? By admission of the Petrojam management when they appeared before the Public Administration and Appropriations Committee of Parliament, we know that there has been a higher-than-average turnover of technical staff in the last two years.

We know that the HR situation has been compounded by the fact not only that persons, not suitably qualified or experienced, have been put in positions beyond their competency, but a new HR manager has been appointed a salary four times her previous pay and almost twice the salary of her predecessor in the same position.

The misfeasance matters are not nearly as significant as cost overruns on various contracts. The perimeter wall at Petrojam that the National Works Agency estimated to have built at a cost of J$29m has been completed at a cost of upwards of J$90m. One contractor has been paid U$200,000 per annum, at least the contractor has invoiced Petrojam in the order of US$50,000 per quarter.

The managing director of the parent company for Petrojam, PCJ, has told the PAAC that what the contractorhas been paid to do is a service that PCJ is quite well equipped to provide. The estimate by one US firm that provided a bid to Petrojam using Chinese products to upgrade the refinery was in the order of U$77m. Petrojam has proposed to spend US$119m, a profit to someone unknown.

 

Staff restive

 

Petrojam staff have been restive. The Petrojam board has resigned after the inglorious action on the part of its chairman, who received reimbursement for trips he did not make. What has been obscured by all of the above is the fact that there has been a protest by theVenezuelans, who are 49 per cent owners of Petrojam along with the Government of Jamaica which owns 51 per cent.

For more than nine months now, the Venezuelans have demanded answers for more than US$10m of value not accounted for.

The 15-page memo by Venezuela to their Jamaican counterpart raised questions about US$2m of pilferage and US$5m of crude oil converted to products for which no revenue flows can be traced. The Venezuelan memo is the reason that the Petrojam board has failed to meet for more than nine months.

In any decent self-respecting democracy, a Cabinet member who has presided over such a debacle would have been sacked for dereliction of duty. Calls would have come from the media and from civil society.

The canons of good governance and transparency ought to have demanded that the chairman of the Cabinet, who is the PM, act decisively to distance the administration from the minister and the debacle and scandal over which he has presided.

Alas, Petrojam may not be an isolated case within the Wheatley energy and telecoms portfolio. There is evidence of corruption, nepotism, and the waste of taxpayer resources elsewhere.

There have been calls for investigation, jointly made by three heavyweight business groups, demanding a forensic audit into the operations of the Universal Service Fund (USF).

 

Protests of innocence

 

The chairman of the USF has since protested the innocence of his organisation. However, perceptions of that agency's conduct have led to the call for a forensic audit.

The statement by the trinity of private-sector bodies failed to mention the National Energy Solutions Ltd. That agency also falls within the ministerial portfolio of Andrew Wheatley. NESOL is a tiny project management company, formerly the Rural Electrification Programme (REP). It employs a staff of what used to be mostly engineers. I say used to because since the change of administration in 2016, the staff has increased by almost 50 per cent, with very few, if any, being engineers among those added to the staff complement.

The two persons who have been arrested and charged by the police for money laundering are connected to NESOL. One of them was promoted and his salary and emoluments doubled since the change of administration.

NESOL, like Petrojam, has had an inactive board. Even without pointing out that the police (C-TOC and MOCA) have all but camped out at NESOL, interrogating various members of staff since the police recovered some J$85m in cash, high-end vehicles, and Rolex watches at the homes of the NESOL staff member and the mechanic, who is also a NESOL subcontractor, the minister must be called to account for his stewardship of the project-management company of government concerned with providing electricity to marginal communities. The minimum that we ought to accept in this matter is that Andrew Wheatley step aside. Then we should follow the money and let the chips fall where they may.

- Garnett Roper is president of the Jamaica Theological Seminary. Email feedback to columns@gleanerjm.com.