Friday, March 29, 2024

Saga of the Barrack muddle

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Every day that passes, Barbadian taxpayers will have to fork out just over $7 000 more in interest alone to pay off the multimillion-dollar debt Government owes Barrack Construction.
That is if Government falls through on its promise to settle the arrears with head of the company, contractor Al Barrack, who in recent times has gone silent on his threats to sell the National Housing Corporation’s Warrens Office Complex to retrieve the more than $65 million owed for his role in its construction.
If, for example, a pay package is not arrived at between now and Christmas Day, Barrack could be getting a “gift” of almost $300 000 more – just in interest charges.
Despite Minister of Finance Chris Sinckler’s promise last month that the legal battle with Barrack will “very shortly” come to an end, unless the Government reaches a signed deal with the contractor for the debt, the initial $34 million award by a court-appointed arbitrator in 2006 could double come yearend.
While Sinckler said the debt was “forward of $62 million”, according to sources close to the negotiations, it stands at almost $66 million if it were to be paid today. That amount includes principal, interest and arbitration costs.
Information from an affidavit filed in the High Court showed that the initial award given by the arbitrator back in September 2006 was just under $35 million – $34 490 518 to be exact. And with interest at the rate of ten per cent per year from the date of submission to arbitration (July 25, 2002) to the September 6, 2006 ruling, and by eight per cent thereafter, the bill quickly rose to more than $50 million.
It was only in November 2008 that Barrack received any payment from Government – $2.5 million from the David Thompson administration.
Since then, not a cent has gone to him, and the aggregate keeps rising. And in all this, court costs, including those accumulated in Barrack’s bid to seize and sell the NHC building over the last five years, haven’t even been brought into the equation.
It was back in early 2010 that Barrack had scoffed at a proposal that would pay him $45 million.
The offer had been contained in a December 28, 2009 letter sent to his lawyers by Government’s legal representative in the matter, former Attorney General Sir Maurice King. It sought to pay Barrack $15 million initially by January 31 of 2010, with monthly payments of $1.67 million thereafter for 18 months until the debt was paid in full.
Barrack deemed it as “ridiculous”, and said he wanted his money in full.
His public snubbing of the offer so disgusted former Prime Minister David Thompson that he declared he would make “no further personal intervention” in the matter, but would leave it up to the lawyers.
And that is where it has been until recent times.
Barrack even once staged a “black and white” protest outside his office in Warrens, claiming that perhaps if he were of a different complexion, he would have been treated differently.
Last June 20, the High Court had made an order for Barrack’s lawyers to sell the Warrens Complex, which houses a number of Government ministries and departments.
The parties were scheduled to return to court the next month, July 25, to show how they would go about that sale. However, highly placed sources told the SUNDAY SUN that nothing further had transpired between then and now as his legal team appeared to “hold off” further action as Government “seemed serious” about finally settling the matter.
It is understood that Government has now called in an additional negotiator to try to broker a deal, and that it has been talking to a potential buyer.
Sinckler, at his October 30 Press conference, said negotiations were “fairly advanced” with a view to a conclusion by yearend.
He added he was “working assiduously” with Minister of Housing and Lands Michael Lashley and they were hoping to get the matter resolved.
Lashley reiterated to the SUNDAY SUN that Government was about to settle the matter with Barrack, but he could not give an idea as to exactly where the money would be sourced, when it would be paid, and how much, as “the matter is sub judice”.
“We are working along with the Ministry of Finance and trying our best to have this matter resolved. This is a stranglehold around the neck of the NHC [National Housing Corporation], as every time we go to source financing locally for our projects, the banks are asking when are we going to pay the money . . . . So it’s a problem for us.”
At the end of the day, Barrack seems to be the one holding the cards. His previous hard talk has not given the impression that he will want anything less than what is currently owed.
And he is keeping those cards close to his chest this time.
“I am not saying anything until I see what is being put on the table,” he told the SUNDAY SUN in a telephone interview last Thursday.
“I am giving the minister a chance to do what he says he is going to do. That is all I have to say.”
It is also in Barbados’ international interest to have the matter resolved amicably, something Sinckler alluded to in his Press conference.
“I believe Mr Barrack should get his money,” he stressed. “As a former foreign minister myself, I don’t think it would be good to have it going around that a court judgment is there for the Government of Barbados to pay a debt and that court judgment is not honoured.”
If Barrack refuses, then payment would be through the court system where every single cent, including interest up to the day of final of settlement, would have to be paid out.
And that could be millions more, millions the country may not be able to afford, with the local and global economic outlook.
The questions remain: can the Government afford at this time to pay this bill? Can it afford to let it keep mounting?
 
 

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