Grant calls for Social Security Board Directors resignation
BASSETERRE, St. Kitts – FOLLOWING the circulation of a correspondence that alleges conflict exists between the Social Security Board and CONTEC with regards to meeting deadlines and monies advanced to the construction company, leader of the People’s Action Movement (PAM) Lindsay Grant is calling for the resignation of the Directors of that Board.
In a statement released yesterday (Oct. 17) to WINN FM 98.9, Grant accused the Directors of acting irresponsibly and putting the public’s fund at serious risk.
“We are calling on the Social Security Board to resign as a consequence of the leaked memo to the Chairman of the Board, Halva Hendrickson, for several reasons. The Social Security Board has a fiduciary responsibility, both individually and collectively, to the people of the country. There are questionable decisions made over several years with the people’s money now put this institution at serious risk.
“We can speak about the purchasing of land at Church Street to put down a parking lot; we can speak to the purchasing of land at Franklands Estate to build houses, which have not been done for several years; and now we speak about the Beacon Heights Development.”
He noted that this situation comes at a time when the last Article IV consultation showed that the Social Security Scheme is under serious pressure and could begin to have deficits as early as 2029 if not properly managed.
Grant also noted that a number of issues were highlighted in recommendations made to the Board’s Directors and the Minister responsible for Social Security.
“One”, he claimed, “is that they are now requiring the age to be increased from 62 to perhaps 67 or 70; secondly, they would wish to increase the level of contribution that employees pay from five percent of wages to perhaps eight or 11 percent. And what we are saying, that if the people of this country are required to have suffer greater by these measures so that the Social Security can remain solvent into the future, then we believe that the people…they have a right to demand an investigation into the Beacon Heights Project, as the failure or the success of this project can have an impact on the level of contribution from wages which employees in the future will have to bear. And these are some of the matters that came before the Social Security Reform Committee for them to consider.”
Referring to the Actuary Report of 2001 done by a Montserratian, PM’s leader enunciated that it shows the Board has the responsibility to go to the people.
He added that one has to look at the fact that there seems to be some measure of conflict of interest when one looks at the Social Security Board and the makeup of the companies involved.
“We are saying that had it not been for the leaked memo, citizens of this country, although they have been clamouring for the last several weeks and months to get some answers about this project, would not have had been the wiser had it not been for this leaked memo. And it also begs the question about what has happened to spending in a number of other projects in this country.
“For example, the La Valle Project where some US$250M has been spent, which has put pressure also on the National Bank, which is also the primary banker for the Social Security Board,” he said.
Grant stressed that these matters are of grave national concern and ought to be ventilated in the public with an investigation into the project, which findings should be made known to “the owners of the assets of Social Security, which are the people”.
The correspondence, which is circulating on the Internet, is purportedly written by one of the Directors of the Social Security Board.
The Beacon Heights Project is the St. Kitts and Nevis Security Board’s first residential venture and it involves the construction of over 191 homes.
In December 2008, CONTEC was awarded the contract for the construction of these homes, with a projected target of completing the first 10 by June 30, 2011. However, to date, the construction company has not reached that deadline although, so far, it was allegedly paid some $49M by Social Security.
The writer of the correspondence stated that “Our records show that we have paid a total of $49,392,190.76 excluding the price of the land on the project. I am sure that most of it passed through CONTEC either for material, supplies, labour or for services rendered. However, it is clear that after such a huge sum has been spent on the project, the company has apparently not made adequate surplus to propel itself from the financial quagmire. It appears to be also encountering problems in generating other business separate and apart from the project”.
The writer also stated that CONTEC had failed to keep the project service with adequate supplies and labour to continue the work satisfactorily, and that the penalty for such non-performance is termination of the contract.
The writer recommended that the Board invoke the clause of Section 17.4.1, 17.4.2 or 17.4.3 and terminate the contract immediately.
“Whatever the Board decides, the company must be required to account for all the resources provided to date. After all, the company has flouted deadlines, failed to present items promised, failed to endorse good business ethics, ignored letters and demands, failed to substantiate the expenditure of sums advanced inter alia,” the writer added.
The writer alleged that CONTEC is unable to negotiate line of credit, overdraft or other arrangement with banks, financial organisations and suppliers in the Federation, and that it appears to be in dire financial straits.
Additionally, the writer concluded: “Let us make the best decisions rather than bearing the consequence later and saddle our grandchildren to pay for the mistakes that we have made.”
Meanwhile, at his recent Monthly Press Conference (Oct. 12), Prime Minister Dr. Denzil Douglas, in response to questions based on the Social Security/CONTEC scenario, said, “The Beacon Heights Project, as the press lady indicated, is in a state of incompleteness to date. In other words, the targeted dates have not been met, and so the reporter wants to know whether there is a conflict between Social Security and the accounting of monies to date that have been advanced to CONTEC.
“That is something that I cannot respond to because I don’t know. What I know is, I agree with you, that the construction phase of the first 10 houses seems to be lagging behind. Because, as you said, the predictions were that the first 10 homes would have been completed by June, and I myself had heard of that.”
Dr. Douglas declared that he had visited the site on Saturday (Oct. 8) and found that the 10 houses were in a state of incompleteness and that he had asked questions, which he indicated that he would not share with the media.
“But I have also been assured that the project is going to be completed. That is, its first phase will be completed very shortly despite the lagging behind of the construction phase of the first 10 homes. I think they are now in the process of putting on the roofs from what I saw on Saturday. In fact, I believe some might have already had their roofs when I visited on Saturday,” he added.
The PM noted that these are very difficult and trying times and he is uncertain as to the specific reasons why the project is lagging.
He however advised that “we should really give it the benefit of the doubt at this time…because I know what is happening regionally and what is happening worldwide. Things are challenging, things are slowed, especially in the construction sector, and I know that there were some industrial concerns associated with that particular project. I hope that they have been overcome and the project is moving forward with regard to the workers and construction”.
Dr. Douglas promised to investigate and provide the media with more details.
“But the project is a significant project. I myself had reason to speak to a part of the Investment Committee that was responsible for that particular project, a few months ago. And I myself realise that there was a slowing of the activity, the construction activity, on that project. I did call the relevant members of the Board to my office a few months ago, and I said the government gave certain commitments of support to the project. I expect their commitments given to the government with regard to the continuing stimulation of jobs to construction, that that commitment would be met at the same time,” he emphasised.
On a visit to the construction site this morning (Oct. 18), SKNVibes was denied entry but observed that five of the homes were roofed.
To date, there has been no statement on the issue emerging from the Social Security Board or CONTEC.
