Two bits of government spending (actually one is proposed) caught our eyes and caused use to squint while reading. The first was the government’s plan to purchase the Deluxe Cinema building on High Street and the second was the massive overspend on the new headquarters for the Antigua Department of Marine Services (ADOMS) on Factory Road.
The justification and reasoning behind the purchase of the Deluxe Cinema building are baffling to many people, especially after the comments from the government’s Chief of Staff, Lionel “Max” Hurst.
According to Hurst, the public should not worry about the $8 million being paid for the building because it represents less than one percent of the annual budget. Specifically, he stated, “The government spends more than $1 billion annually. That’s one thousand million dollars, so $8 million to acquire additional property is not a burdensome amount given the amount the government will spend. It will be less than one percent, or even less than one tenth of one percent, but it will be a significant property that the government will own afterwards.” Well, first thing is to get accurate with the math, $8 million is not less than one tenth of one percent. It is less than one percent, but we do not understand the reference to percentages of budgets since, no matter how you calculate it, $8 million is a significant amount.
Even the Chief of Staff had to concede that the money could be better spent in other areas like upgrading the country’s lone prison facility, the country’s boys training school, home for girls, the debt owed to civil servants or putting internet into schools, but apparently the investment opportunity is too good to pass up. That clearly indicates that the government has shifted to an investment-first policy. With all the obvious needs in our society, coupled with declining revenues, the priority shift is perplexing.
How does a real estate investment trump many of the critical needs in the country? It will not be a money-spinner like the West Indies Oil Company, and the financial benefit of the asset will only be realised when it is sold or mortgaged. Of course, its intended use as a performing arts centre does deliver some benefits, but we all know the fate of the last House of Culture on Parliament Drive.
Buying the building is one thing, maintaining it as a performance arts centre is another. The cost of upkeep must be factored into the equation. Maybe someone in officialdom can provide some clarity?
Next on the spending list is the ridiculous overspend on the ADOMS building that the government has indicated will now be the subject of an audit. Before we get into the worrisome part of this project, we would like to congratulate the government for announcing the audit. We only hope that the full findings will be presented to the public upon completion, because on the surface, the cost overruns are hard to understand, much less justify.
Baffling to us is the fact that a building budgeted to cost $17 million and take less than 24 months to construct has ballooned to somewhere around $30 – $33 million and has been under construction for more than 48 months.
Now, we have heard the usual political excuse that the project was a United Progressive Party (UPP) initiative and that the Antigua Barbuda Labour Party (ABLP) inherited the contracts for construction, but the groundbreaking for this building was in April 2013.
Just over a year later, the ABLP took over. So what did the administration inherit? Did it inherit a $17 million dollar project or did it inherit something extremely different?
The situation at the point of handover is key to understanding who is responsible for this botched project because on the face of it, the UPP was only into the project for about one year. Was the project improperly scoped? Were modifications requested? Was it poorly managed? Wait, forget that last question because the answer is obvious. And speaking of obvious, how is it that no one has been fired for such an egregiously poor performance. Certainly there is someone from the ADOMS/government side that oversaw the contractors. And taking one step back, if the project was improperly scoped, then those responsible for that faux pas have to suffer the consequences for their very expensive screw-up. The contractors as well must be called to defend their performance in this fiasco. If the scope was incorrect, the contractor should have identified the deficiencies in the bidding process.
At least in this case, we are hearing about accountability. Not that we should worry about the cost overruns, because it is less than two percent of the annual budget and “is not a burdensome amount given the amount the government will spend.” Now that’s taking the reasoning to its logical absurdity!