Winston Brassington interview on Under the Microscope with Michael Young
Michaeal Young: Welcome you to another edition of under the microscope I am Michael Young thanks very much for joining me. In the studio today is the head of NICIL Mr. Winston Brassington and we’re going to have a very focus discussion today we are going to discuss several topical issues with respect to NICIL, its operations of course we’re going to find out, we’re going to get to the bottom of the matter, to find out exactly how much money NICIL has, what that money is going to be used for or why the funds are at that level. We are also going to speak to Mr. Brassington on several other issues relating to or how NICIL does its business or what’s its record with respect to transparency and accountability.
Thanking you very much for joining me in the studio, when I call you for the interview you readily agreed so that we can this discussion today.
Now Mr. Brassington tell us a little bit about NICIL, I don’t think persons understand essentially what NICIL is and what it is about or what is it purpose or how is came in to being.
Winston Brassington: Ok, thank you for having me
Michael Young: You’re very much welcome
Winston Brassington: NICIL was formed in July 1990; it was setup by the PNC Government with the purpose of being a Government Holding Company for Investments.
Essentially in simple terms it can basically hold the shares, hold the assets, invest in companies, sell companies, anything you think a company can do, NICIL has the authority to do.
And this was setup in 1990; I became head of NICIL in 2002. I became head of Privationsation in 1996, so I have been doing my job now for over seventeen (17) years.
NICIL is basically the company that owns most of the state sector, most of the Industrial Estates and it operates like any other company. It has revenues, it has expenses, they profit that it makes some of it is distributed to the Government as dividends, so of it is retained for working capital, some of it is Invested. And because it is such a big group when you look at NICIL, what you are looking at on one hand a company called NICIL, but as a group a set of subsidiaries that includes companies like GUYOIL, National Shipping, NCN, National Newspaper, so NICIL accounts reflects all of the transactions of every single member of its group.
Michael Young: Alright, now thank you very much for sharing that with us with respect to NICIL operations, now tell us about the company current Financial State, before we get to further to audited accounts and all of the other burden issues, tell us as is what is NICIL current financial status.
Winston Brassington: As of the end of March, NICIL has little over 700 million in its bank accounts, this is March of this year, this is for NICIL as a company alone it does not include the position of any of its subsidiaries. Anyone of its subsidiaries from time to time may have cash, e.g. GUYOIL has to keep a fair level of cash because it has to have enough working capital to buy fuel.
You know depending on…so… Companies like GUYOIL has to have a fair bit of cash.
Michael Young: Alright, now there is this concern by the opposition benches that there have not been audited accounts for NICIL for some time, consolidated audited accounts I think all together. Explain to us what is the procedure with respect to dealing with Audited accounts, because for many persons the issue of transparency and accountability is very important and people treat it has the hallmark for saying whether or not there is corruption is not corruption or something to hide, so to speak.
But what is the status, why haven’t the accounts come to the National Assembly in the way that they should have for the last couple of years.
Winston Brassington: Ok, NICIL produces its accounts and submits it to the Auditor General for Audit, as a general practice NICIL have been timely in preparing its accounts and submitting it to the auditor General within four months at the end of each financial year.
As we speak right now, the auditor general has already completed the audit of NICIL up to the end of 2010. They have indicated that they will be starting 2011 next week, but the group accounts have only been submitted to Parliament 2005 or 2004, 2005 was just recently completed and will be laden in Parliament shortly. And the reason the Auditor General has not issued the Consolidated Opinion for the NICIL group is because some of the subsidiary audits have not yet been completed. And he awaits that before he issues the entire group accounts. But he has promised us, he is working that by the end of June the consolidated for NICIL up to the end of 2010 should be ready.
Michael Young: Alright, now thank you very much for that comment. Let’s talk a little bit about accountability and transparency. Now NICIL operations has of recent, since Donald Ramoutar administration and even before then has come under heavy scrutiny from members of the opposition and some independent commentators who seem to say that the monies that NICIL generates, before I believe they were banking on a figure of about fifty billion dollars or fifty five billion dollars, it is clearly now that, that money does not exists, but they have been saying that they monies and revenue generated by NICIL should be paid directly into the Consolidated Fund. I think that was the subject of heated parliamentary debates, it’s the topical issue, one of the issue being discussed across the board by these commentators, why is that not the best scenario at this time, and why is that not rational, as the finance minister seems to be explaining because NICIL operates under the Companies Act. Why is it not rational for all of NICIL monies to be bought into public office in that way?
Winston Brassington: if you take what they are saying to its logical extension, you would dissolve every company and everything would operate out of the consolidated fund. So when you sell, if GUYOIL sell fuel you won’t need GUYOIL anymore, because they will operate like a department of the Consolidated Fund, that’s what the logical extension is.
Each company has a commercial set of operations and objectives it collect revenue, it has to pay expenses, only at the end of the year do they determine how much profit they have made, from the profit they may declare a portion of that as dividends.
If you just started putting all of the monies into the consolidated fund, it will be highly inefficient, it will be too bureaucratic and it will basically create a situation where you don’t have the autonomy that companies need to operate efficiently and effectively.
This is the way it is done throughout the world, you have state owned enterprises, they operate as separate legal entities, what we are doing here is no different. If they suggest that you put all the monies into the consolidated fund, they basically suggesting that you dissolve every company and just have their operations conducted out of the consolidated fund which is ludicrous.
Michael Young: but do you believe these experts in the field that they are aware of this argument and they are aware too of the situation with respect to the operations of NICIL, and probably there maybe something more that is being hinted at here as they continue to play out this game of politics or rational in the National Assembly, if you want to call it that?
Winston Brassington: I believe that they should know how these things work, I believe that they are also being intellecually dishonest, I think this is political games, political theater, it’s called cheap political mileage. They are making what they ought to know are deeply irresponsible statements. They are not coming forward and backing it up. They are not coming forward and backing it up and then they just throwing that out there and creating an impression and I am very upset that they this sort of behavior because it is going to hurt anyone who wants to do business with Government when you have members of parliament and the opposition who seem bent on making statements that are dishonest or irresponsible.
Michael Young: Now there seems to be lots of talk about private deals, secret deals, things that are happening that are under minding the public interest so to speak, favoritism. I can go on by describing it through several different words, different themes if you want to call it that. Now is this business about secret deals you understand a facade or is it something that was actually in existent and now government is trying to clean its act up and is now putting laws in place to ensure there is transparency. Are they any secret deals or projects, you call it agreements if you will, that NICIL has negotiated behind closed doors that the public has not been properly informed about to date.
Winston Brassington: they are not secret deals, NICIL has conducted its operations in a transparent manner, that being said you do not go out and reveal the details as of what you are doing until there is certainty and agreement on what’s being done.
That’s a cardinal of principle of doing business. The Principle of transparency that we adhere to is if we have something to sell or we are looking to buy something we would advertise it. It would go through a tender or process. Our privatization programme is conducted in accordance with a privatization policy paper that came out in July 1993.
Every transaction that we do goes through the privatization board, which they are stakeholders on the board which includes representation from Private sector, Labour, Consumers, so we don’t have secret deals. We follow a certain cardinal principles on transparency.
Michael Young: you might say there are no secret deals, let me close it off for you there is some talks that there is favoritism and that the persons who benefit some of these deals, the largest of these deals are persons who are either related closely to government, pro government, friends of government and so whatever the transaction is comes into dispute especially in the political arena is that the case?
I know for one period of time, we can address that here, persons were talking about the Sanata Textiles deal and the fact that the person who would have benefit from that deal got tax holidays, concessions, and all these things that they should not have gotten. I don’t know whether or not that’s true. You are here you are head of both Privatisation and NICIL Unit, you should be able to tell us, let’s use that deal as an example, was there anything corrupt, secret, that lack transparency about that deal? Then probably you can allude to some of the others that have reek controversy in the public.
Winston Brassington: Let’s start with Sanata and let me say that we fully ventilated this matter in 2008. In fact coming out of this we had a work shop at the Pegasus and we published a book basically showing every single privatization and the transparency in it. The stages it went through from the privatization unit to the board, to cabinet. And where we hadn’t award something based on a tender we showed the justification. In the case of Sanata, Sanata has basically been in a dilapidated state for many years. The Chinese handed it back and left because they couldn’t make it work, we advertised it twice, public advertisements, we got no takers, it was costing us to continue to hold it, they vandals were breaking in and stealing everything, we were paying a huge cost for rates and taxes and for security, it became a haven for criminals to go, even the security guards were afraid, they were guns shot from people and you know with people who are trying to steal. And so we were actively trying to find someone who can beneficially use the property. When Queen’s Atlantic…., we approach a number of people and Queens Atlantic was interested in doing it. Now we looked at the complex from a privatization perspective to achieve a couple of objectives. Money was one, what was more important was the development trust of what could be done with the property and so the deal that was worked out was that there would be a lease and there would be a substantial level of investment in a number a businesses and that investment would exceed twenty million United State dollars. Of course you would see major rehabilitation, you would see significant employment, you would see basically a conversion of basically what was lost making property to something that was no longer a lost making for us, we would be collecting lease fees. And we said that if you made the investment, you would have a option to buy it based on independent evaluations and that is what we had here. And at every stage of the game all of this was approved by the Privatisation board. So there is a lot of people who seem to ignore that we have spoken about these issues in the public awhile ago and they keep referring to it because the perceive friendship.
Well the fact is no one else was willing to put that offer on the table and if they were let them come and show us. Now we do many transactions, some people you may know some people you don’t know. I don’t hear Mr. Ramjattan complaining that we sold Stock feeds to Mr. Badal, or we sold Guyana Stores to Mr. Cassin, that Mr. Glen Lall is a director of Guyana Stores and they owe us money. You know I don’t hear them complaining about these things. So we treat fairly and impartially with friends, family, Foe whoever it is. I know a lot of people and I can say I have a lot of people that know me, when it comes to get the business of government done, not only myself, I am very tuff on negotiations, but not just that we have over sight processes, we have a board, we have cabinet, so whatever we do there are layers of processes that helps to ensure there is transparency.
Michael Young: well thank you very much, I saw you get a little…………
Winston Brassington: It keeps coming up and its like amnija, a lot people forget we have ventilated these matters in great detail in the past.
Michael Young: now given the fact that you have spoken about those things, the leasing of state lands and the other operation that NICIL does, there seems to be a clout now over the integrity of NICIL as an entity now more than ever minus the fact that you just quite eloquently explained to us what the processes are. What is responsible because even the information that you shared with me is public knowledge. So what is responsible now for this clout still remaining with respect to whether or not NICIL is going to negotiate fairly whether or not they are negotiating for next to nothing, whether or not NICIL is being run as though it is a department of the People’s Progressive Party Civic, if you want to go so far. What is responsible for this clout and how can we remove it now so that NICIL can continue to function and we can get ahead with our business.
Winston Brassington: ok, first of all let’s look at NICIL and what we do. As I said most of the, NICIL owes a lot of assets and virtually all of the assets that we have they are privatized in accordance with our privatization policy, so you have a set of principles for transparency that is set out there, now on the other hand you have the accountability issue. Now, NICIL has been proactive in seeking to have the accounts audited but we don’t appoint the auditors, we don’t do the audit.
Michael Young: You don’t?
Winston Brassington: no
Winston Brassington: the law of the country states that the Auditor General, is the auditor of all state owed entities. So we have no choice in picking the auditors.
What we have to do, which we do, is submit in a timely manner our accounts to be audited and I have explain the delay,
Michael Young: yes you have
Winston Brassington: what we have additional done, because of the time it is taking to get the consolidated audits completed is the following, we published in 2008 a booklet on all the privatization’s transactions from a transparency perspective, we actually bringing that update and will be issuing very shortly a more detailed revised booklet up to the end of 2011. We will have all of the money matters mention and in more detail in that booklet.
As the audits of our subsidiaries are completed we have cause these accounts or annual reports to be tabled in parliament. Within the last two years the Ministry of Finance has tabled in excess of eighty set of accounts of annual reports related to NICIL subsidiaries.
So we have sought to do all we can within our control to be as opened and transparent. I believe the controversy over NICIL, has to do with the fact that NICIL is going to be part of the Public Private Partnership for the Marriott Hotel Project and because Mr. Ramjattan receives strong support from Mr. Badal who owes the Pegasus. And we know that Ms. Badal does not want the Marriott Built.
The Private Sector Commission has come out and support to the Marriott, many hotels have come out, but Mr. Badal is opposed to the Marriott. And because Mr. Ramjattan is a close friend of Mr. Badal and probably receives substantial financial support they are trying to remove the autonomy that NICIL always had which was setup from 1990 by the PNC, to say bring it to parliament so they can cut funds and cut this as the deemed.
The cut the LCDS eighteen billion, that money was suppose to go to the Hydro, so they would like to have the ability to say we don’t want to do this, cut it. The elected government has made decision and has announced a long time ago, the government will be investing one third in the Marriott, through the public, private partnership. We’ve had the Berbice Bridge with is a Public Private partnership, a lot of what we do without taking money from the treasury, we have taken NICIL which in the 1990’s or the 1980’s when you look at those companies, all of them were going to the treasury to get money.
We have turned that group around, we have restructured, we have privatized, what we have does not require any funds from the treasury except in two instances, NCN for government serviced and in the case of electricity subsidies for customers. But apart from that NICIL and its group are entirely self financed, plus we paid in the last ten years over nine billion in dividends to the treasury, so it’s not that we are keeping all of our monies, we do what we do in a transparent manner, we pay over substantial sums as dividends and we invest some of it, not a lot of it. The Marriott is the single largest investment we will ever undertake.
Michael Young: well I don’t know some of the comments you would have made in respect to Mr. Badal, whether or not he wants the Marriott or whether or not he is a friend of Mr. Ramjattan
Winston Brassington: it is a public record, it is stated publicly that he supports the AFC.
Michael Young: well I may recall that fact but for the rest of this show we’ll treat that at this time as some sort of allegation that we obviously cannot prove.
Winston Brassington: well maybe Mr. Ramjattan since he has been making some many allegations can come out and state whether they have received financial support from Mr. Badal or any of his companies.
Michael Young: Thank you very much Mr. Brassington now moving forward, let us talk quickly about the way forward. First of all are you prepared to this point in time, I know you have made several presentations to the opposition with respect to various projects, are you prepared to engaged in a constructive public manner any individual any company that would like to have information either about the projects, as you have said you have published a book, but probably presentation are one on one with respect to the projects that have been undertaken, NICIL Operations or would you urge anyone that have information which would so prove in public domain that NICIL is corrupt, lack transparency and has been doing under hand deals to come forward.
Winston Brassington: Definitely, if we do that, they can do that anytime. They don’t have to come to me, they are many other bodies, if the politicians have this let them come forward and present it, let them come forward and present it. I have done my job last seventeen years with honesty and integrity, let them prove otherwise. Everything that we have done can stand scrutiny. I don’t report to Mr. Ramjattan, I don’t report to Mr. Greenidge, I report to boards and I report to Cabinet. There is a process that , I don’t make follow, I don’t make decision on my own, so I can stand up and say I have done my job with honesty and integrity, and if you want to say otherwise prove it. Because I will say they are deeply dishonest, these sort of innuendos that they are peddling deeply dishonest, and they should come out and stand up. If they have any dignity, if they have any shred of honesty in them, come out and say where it is, because we can prove them wrong.
Michael Young: Well some of these commentators themselves, persons aligned to political parties have themselves at one point in time worked with NICIL, either benefitted financially for the services they have provided, consultancy or so, it would be surprising for you to tell us who these persons are and how naïve it is that some of these said individuals are the biggest critics now of entities which they were publicly aligned or have done some work with.
Winston Brassington: we have worked with many many professional firms, many many groups, when we set about producing consolidated accounts for NICIL we hired Chris Ram, Ram and McRae.
Michael Young: When you say, you talking about
Winston Brassington: Christopher Ram, the same person who every day is writing about NICIL
Winston Brassington: well as a professional we hired him as an accounting firm and himself to provide training and accountancy work for us in 2003 and 2004. This is the same person who, today he is accountant tomorrow he is a journalist and so we hired him then. They are members of the AFC, Mr. Nagamootoo has serves as a legal advisor, as an attorney on transactions for the Berbice Bridge, for Dutch four, he is serving as an arbitrator. I am not saying Mr. Ramjattan will not do his job, I am not saying Mr. Nagamootoo will not do his job as an arbitrator, but some of these same people saying that we doing this and we spending money have been the recipients of fees paid by NICIL for professional services.
Michael Young: is that dishonest to professionally to do a job, be associated with a firm, understand clearly the operations of the firm and then to come out into public and so say otherwise after you have benefited, to come out and say, “Look I know these people, or NOT to say first of all that I have been associated with this company in this way or that way, and I have not benefited” and then to criticised but just to come out with the criticism as though we are all holy men or men of the cloth.
Winston Brassington: You know after ENRON and WorldCom and these transactions, you now see popular journalist, first thing they will say is I own shares or I am affiliated with. These disclosures are now becoming customary, so indeed once, if you are doing business or you are in receipt of income you should disclose it, but I don’t see much of that happening.
Michael Young: the way forward now, if the NICIL issue continues to be a political ball field what is at stake, what will we loose? You mentioned a little bit about the companies probably being dissolve and the inefficiency that could be associated with, and NICIL to rushing to the treasury every time it needs to get its business done, but more so I believe that there may be some serious implications with respect to investment and doing business in Guyana with this state, your take on that.
Winston Brassington: for years any big transaction that we are working on be it the Berbice Bridge, be it the Hydro, be it the Marriott, we have been dogged by criticism by people who are seeking to pull down the project to make it not happen, despite these criticism we have persevered and succeeded. I think that if these people continue as it is very few people will want to do business with Guyana with the government. Because they would feel that they would come in and the opposition will try to start to throw mud at them without any justification.
Secret deals, Secret MOUs, this can’t happen, why are we doing this. At the end of the day the government is the elected government, they are the executive, parliament has a roll, and we are willing to be accountable to parliament.
All of these questions that are being asked about NICIL, because we are not the Auditor, questions should be directed through the Public Accounts Committee to the auditor general, “tell us why NICIL Audits are not completed.”
They have not been using the Parliamentary process to get information, instead they have descended into cheap political theatrics, grand standing in the public media, in the public arena ignoring the past, ignoring all that’s out there and I think they are just doing it to be destructive. They are not interested in seeing Guyana develop; they’re interested in sowing the seeds of destruction. They are not working constructively.
Michael Young: Thank you very much Mr. Brassington for joining us on under the microscope, several issues have come out, now finally if you have any closing comments to make at this point in time you can go ahead.
Winston Brassington: I think that over all NICIL is committed to being open about what it does, despite the fact that the audited accounts are not completed which we have said is not our fault, we are willing to provide information, the privatization booklet that is being updated will be a very useful bit of information. One can obtain information of what we published in 2008 by going to www.privatisation.gov.gy. I have also recently taped a programme with Olive Gopaul it will be aired on NCN tomorrow Sunday and repeated during the week on Wednesday and I speak more about NICIL in different respects.
We are opened to answering any questions from Parliament; we are tabling the accounts in Parliament. I think that all of this may make us realized the role of public enterprises. I think we have taken a lot of this for granted and in the decade public enterprises in Guyana have turned the corner.
This is a group now that is commercially viable, that does not require money from the treasury and has been contributing money to the treasury.
My closing comments, in the last ten years we have paid over nine billion dollars in dividends to the treasury, this is all in the public record. You don’t hear a single mention of this from the opposition. In the last twenty years we have paid over twenty billion dollars in privatization proceeds and dividends to the treasury, we don’t hear any comment about that.
When Mr. Goolsarran wanted to audit privatizations, he advised he has a letter from Mr. Greenidge which says he is not the auditor for privatizations he cannot audit it. That Mr. Greenidge today wants an independent audit after this government past a law, and made it very clear that the Auditor General is the Auditor of all state owed entities.
Now Mr. Greenidge wants to say, well let’s get a special audit. I remember Mr. Goolsarran upgrading me when we were doing a special exercise for GAC back in the 1990’s. He said I am the Auditor General of the Land and the law states that you cannot do a single audit without going through me. I think we have some double standards here and I think that what is happening seems to ignore the past.
Our record can stand scrutiny; those who are throwing the attacks let them put their records to see if it can stand scrutiny. Let them put substance to these allegations and then we will deal with it, let them be accountable for the numbers that they are throwing around, because I call it jumbie arithmetics. They just creating this out of nothing or they seemingly peddling information, they should understand better.
Michael Young: Thank you very much Mr. Brassington for joining us under the Microscope it was my pleasure of course interviewing you and getting to the bottom of the matter. This has been another edition of Under the Microscope.