Transparency versus Suspicion 

Editorial

The Med Point Affair

It may be recalled that suspicions of wrongdoing were in the air on the view taken by the MMM opposition that the acquisition late last December by the government of the Med Point hospital from members of the Jugnauth family appeared to be tainted with corruption. The MMM has alleged that the bid specification was made to measure with a view to influencing decision in favour of acquisition of this property for the government’s project to set up a centralised geriatric hospital. Allegation has also been made that recourse was had to two successive evaluations in a bid to elicit a higher price than the one originally estimated for it by the government valuer.

ICAC’s investigation into the Med Point affair has brought in new elements this week. Two officers of the Valuation Office of the Ministry of Finance have been put under arrest. If the arrests have been effected, as we understand it, under section 7 of the Prevention of Corruption Act, that is, against ‘a public official who makes use of his office or position for a gratification’, and the case is actually proved in court, the offence is sanctioned by imprisonment. The matter may not end up here; it will need further upstreaming to identify the device employed for gratification and who the ultimate or proximate gratifier/s behind the transaction could well be. In other words, the arrests effected by ICAC may be a first step only towards bringing in new witnesses and potential culprits in establishing more firmly the direction taken by ICAC’s investigation so far.

If it is established in the process that government officers may have allowed themselves to be influenced by superiors and thereby failed to carry out their duties objectively, the outcome of the investigation and trial, if any, could become a pointer to what public officers may or may not do in the execution of their duties. The basic principle is well established however: no matter how powerful or influential the superiors may be, the officers cannot afford to trespass the provisions of law or laid-down rules of administrative conduct. They cannot bend existing principles to suit the convenience of parties involved in an administrative decision. While being fair to all parties concerned, this administrative decision should first and foremost have minimized the cost to the government in the acquisition of the former Med Point property. It cannot go in the opposite direction as that will be to the detriment of taxpayers.

Ever since this affair broke out, the public has asked to be duly informed so as to be left with no doubts that possible conflicts of interest would have come into play and actually been acted upon, reflecting a possible institutional failure. This is because there was a general feeling that the element of transparency was missing. The week before, the Prime Minister stated in Parliament that it was not appropriate for him to make statements in Parliament on the matter or to set up a Select committee to look into it, as that could be detrimental to the ongoing investigation by ICAC. It appears that ICAC has started living up to hopes placed upon it and that it has a trail to follow to establish whether conflicts of duties have actually arisen. It is evident that no matter where the investigation will lead to, there is every reason for it to be done thoroughly, leaving no stone unturned and hence not the least doubt in the public mind that all has been done to spare the country similar “accidents” in future.  

The Neotown Project

The Neotown project of Les Salines in the vicinity of Port Louis harbour is another matter that has stirred up emotions in the local media. It involves a development project covering an area of about 60 acres. The government had invited requests for proposals for the development of this prime land in the capital next to the Caudan Waterfront. It is being said that a few property developers responded to the Request For Proposals and it is Patel Engineering, an Indian property developer, which was chosen by the government.

While addressing his company’s stakeholders on 15 November 2010, the Managing Director (MD) of Patel Engineering explained the various reasons for which they should feel satisfied with the deal the company has struck with the government of Mauritius. He has informed that the company was able to deliver factual projections on the taxes and revenues the government will be able to collect, the extent of growth of tourism the project will prompt as well as the quantum of employment and FDI it will generate. In his opinion, these hard facts have carried conviction with the government whereas other bidders may not have gone that far to convince the government about the actual positive fallouts of the implementation of the projects submitted by them. This difference in submission of hard facts would, according to him, have helped the company secure the development project against a couple of other bidders who would not have gone to that degree of detail in their submissions.

The MD of Patel engineering has gone on to explain to his audience that he has successfully extended the lease from the government’s original 30-year period to 99 years. He has also taken credit for having negotiated a favourable deal for his firm inasmuch as “for the first time in Mauritius the Government changed its law, went to Cabinet and gave somebody land on lease for 99 years”. Among others, he has stated that there will be no restriction on the heights of structures that the company will set up on that plot of land. No “zoning” restriction (i.e., specific areas to be developed strictly for pre-agreed purposes) will be enforced. Another matter for which he has taken credit relates to the rental amount agreed for the land (valued at $560 million= MUR 17 billion approximately) which he states as Indian Rupees 2 crores (i.e., INR 20 million= MUR 14 million) p.a. fixed for the first 10 years, which is equivalent of some Mauritian Rs 250,000 per acre p.a. He considers it to be an insignificant amount when compared to the company’s aggregate annual rental of INR 2,000 crores.

Like the Jin Fei project of Riche Terre, on the other side of Port Louis, the Neotown project of Les Salines is to be developed by non-Europeans. In other words, property development in Mauritius is no longer the exclusive preserve of a particular group of property developers to the exclusion of everybody else. It is good to diversify the entrepreneurial base because this is where Mauritius can use strategic arguments to get its economic and trade partners to apply rules flexibly enough towards us to enable us to increase our economic space and to spread out the benefits of development to a wider diversity of the population than it has been the case so far.

Traditional powers having had dealings with Mauritius will receive the message that we are prepared to keep our options and alliances open. We will not then be ignored as in the Chagos case because, in that particular context, we do not have a shadow of the international leverage power that the UK allied with the US actually have to deprive us of our rights on part of our territory. However, it would have been preferable if all these development activities were undertaken as transparently as possible. We need to have known the facts of the deals before the shareholders of companies taking on government property for long-term development at the least: this applies to both Jin Fei and Neotown.  

* Published in print edition on 8 April 2011