This is not my conclusion but the conclusion of the Auditor General, Alastair Swarbrick in another damning report on government’s handling of our affairs.

In a Press Conference Swarbrick held today (Thu) he presented his report, part of which has been published on our Front Page under the title “Government needs a development plan for Cayman Islands, says Auditor General”.

The report, “National Land Development and Government Real Property,” looks at how well Government manages both public and private lands in the Cayman Islands.

They haven’t done a good job at all. And we are mainly talking about the government headed up by Mr McKeeva Bush.

The Report highlighted the National Road Authority (NRA) Agreement (building of the West Bay Road extension), South Sound (Adagio) Development and Health City. It also looked at management of the land that is covered by water around the islands.

Swarbrick claims:

“The audit found a number of areas where government has not followed its own laws. For example, on several occasions the Public Management and Finance Law (PMFL) was effectively ignored, and former ministers overreached their roles in the negotiations relating to the NRA Agreement. The audit also identified a number of areas where the framework in place does not provide the level of transparency and accountability the auditors expected to find.”

“We found that the framework for the management of development and land in the Cayman Islands established in the Development and Planning Law is neither comprehensive nor up-to-date. The Law requires the Central Planning Authority carry out a “fresh survey” every five years and submit a report to the Legislative Assembly with proposals for alterations or additions to the plan. This was last done in 1997.”

‘Initiative for development has passed from the Legislative Assembly to the private sector. The two largest developments undertaken in the last five years – the NRA Agreement and Health City -were not guided by the Development Plan. There is no evidence that the NRA Agreement was ever assessed against the Development Plan. The Central Planning Authority used the Plan in a cursory manner to assess the Health City proposal, but the Department of Environment stated it was obsolete and did not use it.”

“Authority and the Central Planning Authority do not agree on the allowable depth for quarries, resulting in the override of the judgment of the technical authority. Storm water management is increasingly problematic as wetlands have been eliminated. The National Roads Authority has become involved, but regards storm water management other than for road protection as outside its mandate.

“The Development Plan 1997 is further limited by lacking zoning regulations for the Sister Islands. In addition, oceanic and seabed resources are outside the Development and Planning Law. Cabinet is responsible for Coastal Works licenses. This divides responsibility for developments that cross the high water mark and involves the politicians in operational decision making, inconsistent with their policy­ only role defined in the Public Management and Finance Law.

Decisions regarding land use are not always transparent. The Central Planning Authority and the Development Control Board publish submissions made to them, but their deliberations are not open to the public and objections or recommendations by technical authorities such as the Water Authority are often overruled or ignored without explanation. THE NRA AGREEMENT AND THE HEALTH CITY AGREEMENT WERE NEGOTIATED OUTSIDE THE NORMAL PLANNING PROCESS IN SECRET BY MINISTERS WITH NO PUBLIC DISCLOSURE UNTIL AFTER THE GOVERNMENT HAD COMMITTED TO THEM.”

“In the case of the NRA Agreement, the contract was negotiated by Ministers without the knowledge or assistance of civil servants and presented to them in a detailed agreement drawn up by Dart Realty (Company) Ltd. (DRCL) which had legal obligations they were required to implement with little time for analysis or revision. The Ministers were acting outside their roles in the governance framework. In addition, although a highway was acquired, land disposed of and extensive tax and duty concessions made, no approval was sought from the Legislative Assembly as required by the PMFL. In the case of Health City, the agreement was negotiated by Ministers. It was presented to Cabinet together with input from the Ministry commenting on the terms of agreement. Although there was input from the civil service, Ministers acted outside their legal roles by becoming involved in the selection of means. Again, no approval from the Legislative Assembly was sought, even though the agreement committed government to hundreds of millions of dollars in tax, duty and fee concessions and contained obligations for infrastructure upgrading and expenditure.”

“I CONCLUDE THAT IN BOTH CASES THE GOVERNMENT ACTED UNLAWFULLY AND WITHOUT PROPER AUTHORITY IN SIGNING THESE AGREEMENTS.

“THE GOVERNMENT DID NOT CONDUCT ADEQUATE VALUE FOR MONEY ANALYSIS FOR EITHER THE NRA AGREEMENT OR THE HEALTH CITY AGREEMENT. IN THE CASE OF THE NRA AGREEMENT THIS HAS RESULTED IN THE GOVERNMENT’S REFUSAL TO HONOUR THE HOTEL TAX REBATE OBTAINED BY THE DEVELOPER WHO NOW CLAIMS THE GOVERNMENT IS IN MATERIAL BREACH OF THE AGREEMENT, RAISING THE RISK OF A SUIT FOR DAMAGES. IN THE CASE OF HEALTH CITY, THE GOVERNMENT COULD COME UNDER PRESSURE TO PROVIDE INFRASTRUCTURE IT CANNOT AFFORD.”

I have capitalized the most damning statements.

The Auditor General has noted the effort of the new government to address some of the issues but does not agree with some of their conclusions.

However he does give this cautionary compliment, “Officials told us that the Government has already taken steps to improve the procurement process. They informed us that a Director of Procurement has been recruited with a view to establishing a procurement office. They also informed us that Ministry of Planning, Lands, Agriculture, Housing and Infrastructure (PLAHI) has taken steps to establish a major projects office. We believe these are welcome developments and represent the first steps in responding to the related findings of this audit.”

In conclusion Swarbrick says:

“We have noted that between 1976 and 2008 that two-thirds the wetlands on the western part of Grand Cayman have been lost with no protection for eastern wetlands in place. We have noted many other specific instances where environmental concerns have been overridden without explanation or preservation goals were unmet. Large-scale, investor-driven development such as the NRA Agreement and the Health City development is accelerating the pace of development. The Legislative Assembly needs to determine whether these trends should be allowed to continue or whether a comprehensive development plan should be developed by the Government and put before it as required in the Development and Planning Law.

“We also found considerable problems related to the Government complying with its own governance framework for managing public expenditure. We highlighted examples where there has been a lack of respect for the segregation of roles demanded by the PMFL. Under the PMFL, Ministers are to set policy and have limited means of influencing program delivery, Chief Officers are to craft plans to deliver the outcomes, and to oversee implementation, and the Legislative Assembly is to approve all expenditure. In the two cases we studied, assets were acquired and long-term tax concessions made by Cabinet without any form of approval being sought from the Legislative Assembly. In our opinion, these actions were unlawful and are serious deviations from the process in place to protect the people of the Cayman Islands from possible corruption by public officials.

“Other parts of the governance framework have not been put into place, even though laws have been passed by the Legislative Assembly. The Public Sector Investment Committee in the PMFL, the Standards in Public Life Law, and the National Conservation Law have all been enacted and given Royal assent, but are not yet fully in force.

“Finally, our audit shows that much remains to be done to create a framework for the management of Public Private Partnerships (PPP’s). The increased use for such vehicles was anticipated when the Framework for Fiscal Responsibility was signed and indeed, it appears that future major development of infrastructure will not necessarily be government-led or completely government­ financed. The FFR, which is now embedded in the PMFL, provided an outline of the principles that are used to manage PPP’s, but detailed policies and procedures are still required to ensure that the Government receives value for money. Examples of such policies and procedures exist and have been used for a considerable period of time in other jurisdictions and it should not be difficult to adopt and customize the required! framework for the Cayman Islands. A framework and transparent process would assist the Government in attracting high quality institutional investors as they are now diversifying into infrastructure PPP’s.

“The creation of a procurement office and a major capital projects office should strengthen the Government’s management framework and result in more effective management of PPP’s and major capital projects in the future.”

It is a pity that government ministers and civil servants who do not obey the laws cannot be punished in the Courts for their flagrant disregard of rules put in place to protect the public from dubious actions that are far from being transparent.

Further, elected government ministers who do not abide by the laws of the country should be barred by ever standing in an election again.