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CDA saddled with $118m debt
The Chaguaramas Development Authority (CDA), the State-owned company responsible for managing and developing the north-western peninsula, is saddled with a $118 million debt incurred under the People’s Partnership government.
However a 12-page draft report dated August 2016 to September 2017 shows that its Chaguaramas golf course recorded a 105 per cent increase in revenue from $292,397 to $598,529 over the two-year period ending September 2017.
The report shows that CDA’s financing and accounting department had original reflected a debt of $80 million but after an organizational audit during which all departments were mandated to conduct searches of records and submit outstanding invoices, the debt was calculated at approximately $118 million.
As result, the CDA priorities for the next three years include reduction of operating costs, increasing revenue, achieving financial self sufficiency, completing rent reviews and improving collection of rent.
A reviewed of the finances of the CDA for 2015-2016 showed that expenditure exceeded revenue. In light of this, the board agreed in March to conduct a manpower audit to help reduce operational costs. In addition, the legal department together with external counsel has been reviewing leases and rents as well variation of leases which may be in contravention of the CDA’s 1974 development plan and a team of employees has start an intensive collection drive to recover debts from private tenants.
“Since this collective drive the CDA was successfully able to recover $6.5 million from its arrears as at September 2017. Some tenants were also issued legal letters and we are currently negotiating payment plans to settle outstanding balances. Daily follow ups are done with tenants to ensure that rents are paid in a timely basis, failing which the CDA would have no alternative but to consider termination of the leases for this breach,” the report stated.
The CDA recovered $6.3 million of debt between November 2015 and September and its collection rate increased from 31 per cent to 76 per cent since the collection drive was introduced. It has also been able to reduce its debts with some of its main suppliers, some of whom were owed as much as $150,000.
“It would appear that the previous administrative was incurring expenses monthly and not paying for same and as such the CDA was left with an enormous debt. The CDA is in receipt of numerous filed court matters and pre-action protocols for breach of contract having failed to pay contractors and suppliers.
“The acting general manager and the legal department are working continuously to amiably resolve these matters without incurring further legal cost,” the report stated.
The report also revealed that the CDA rented vehicles from Massy Stores in August 2015 for three years at an annual rent of $1,460,868.
“The CDA was having difficulty in paying the rent of the vehicles and after examining the contract agreement it was determined that the vehicles should be purchased outright which proved to be more economical. In September 2016 the vehicles were purchased from Massy Stores for the sum of $2,090,000 which was duly paid. In total the CDA would have paid $4,382, 604 to rent these vehicles for those three years. In purchasing the vehicle the CDA instead paid $3,382,595.”
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