Paulwell
MINISTER OF Industry, Commerce and Technology, Phillip Paulwell, is expected to tell the House of Representatives today what went wrong with the NetServ information technology project, bolstered by a public declaration that he still enjoys the full confidence of his ministerial colleagues.
It will be Mr. Paulwell's first comment on the issue since last Thursday morning when he attempted to explain on public radio why Government had injected funds in the company, despite due diligence reports that raised questions about other operations of chief executive officer, Paul Pereira.
The Opposition Jamaica Labour Party (JLP), whose Standing Committee met last night, continues to insist that a statement must also come from Prime Minister P.J. Patterson as portfolio minister with responsibility for National Investment Bank of Jamaica (NIBJ), the state agency that oversees the Intech Fund from which the loan was granted to NetServ.
Meantime, JLP Senator James Robertson issued a statement last night detailing his involvement with NetServ as minority shareholder and consultant, and stating that he fronted and recovered $1.8 million in stamp duty payments on behalf of the company.
Yesterday Cabinet approved the draft Ministry Paper, which is roughly a 100-page document. The statement is expected to detail the chronology of events, payment schedule and loan disbursements, grants to the company, and the equity injected by NetServ Communications in the business, if any.
Asked at a post-Cabinet press briefing if the Ministry Paper fully clarifies the issue, Information Minister Colin Campbell said: "This is what we intend to do."
Senator Robertson's statement last night came a day after one from Mr. Pereira in which he accused the JLP Senator of pressuring his company for money, despite having no payment arrangement with him.
But Mr. Robertson's story varied.
"As consultant to this project, it was agreed that I be paid US$250,000 for all pre-incorporation work and be subsequently given a consulting contract on a mutually agreed scale of fees," he said. The deal also gave him minority shareholdings in NetServ, of some 50,000, he said.
The statement suggested that the Senator had fronted $1.8 million on the request of the company which needed the funds to pay NIBJ for stamp duties and registration costs, and that those funds which amounted to $42,500 in United States currency were in fact repaid.
Those funds were advanced to Netserv in mid-November, a month after Senator Robertson himself wrote to Mr. Paulwell indicating disquiet about the information technology investor, based on information that had surfaced.
"I made the advances on the basis of my belief that the Minister (Paulwell) had given approval for continued dealings with the company after having investigated the allegations in the fax which he had received, and after completing the necessary due diligence," Senator Robertson said.
The JLP, which played a key role in bringing the Netserv issue into the public domain, said that it wants both Prime Minister Patterson and Minister Paulwell to make statements on the issue, and that the exercise in the House of Representatives "won't just be the tabling of a report".
Mr. Campbell said that within the context of the House, a ministerial statement does allow members to field questions and seek clarification.
"We are hoping that the Speaker will exercise discretion and allow extensive questions to be asked by Opposition," said Karl Samuda, the JLP's spokesman on industry and commerce.
According to Mr. Samuda, the Opposition will be seeking the details and history of transactions associated with the project, and the involvement of the political directorate and bureaucracy in the decision-making process.
NIBJ is the agency managing the Intech Fund from which over $600 million in loans have been disbursed to date to IT investors, $180 million of which went to the Netserv project. Mr. Paulwell's statement will deal mainly with NetServ but will have background to the Intech Fund, said Mr. Campbell, the Information Minister.
Netserv Communications operated for almost six months, before being placed in receivership on December 13 by the NIBJ which was concerned about the viability of the operation. The company had created 209 jobs over the period, a fraction of the 3,000 it was mandated to deliver under the terms of the loan with NIBJ.
Those loan terms gave the company a three-year moratorium on repaying the loan principal, a repayment period of eight years at 5 per cent interest.
But in a statement Sunday, Mr. Pereira, who described himself as a "businessman with a dream", claimed that politics and violence were at the root of his company's problems.
Netserv, he said, lost a major investor because of the July 7 violence in West Kingston. He also blamed bad publicity, and the September 11 terrorist attacks on the United States for the pull out of others.
Mr. Pereira did not specify who the investors were. He said his problems began because Senator Robertson was peeved when his company refused to bow to pressure to enter into an agreement to pay him.
