Minister of Local Government Portia Simpson Miller, ordered an investigation into the operations of the National Solid Waste Management Authority (NSWMA) after an emergency meeting on March 1. This has placed the agency and its executive chairman, Alston Stewart, under intense scrutiny. Earl Moxam spoke recently with Mr. Stewart about some of the concerns raised.
EM: Mr. Stewart, there have been
several concerns raised about the
operations of the NSWMA. Let's start with the surplus that the NSWMA had generated. What were the specific
concerns of the board member, Steve Khemlani, and what was your response?
AS: The surplus was more of an accounting procedure. The authority being a new agency, had a number of staff members and activities budgeted in the year in question that did not materialise. I can recall $24 million for transfer stations for Westmoreland and Clarendon that were not purchased because the funds were not provided. I can recall members of staff who were not yet recruited that were budgeted for. Every month, we reconciled our expenditure against the budget, and therefore if you come to a point where you should have spent X and you did not do so, it will show that you have a surplus. Concurrently, there are areas that we might have budgeted for a particular figure and we overspent it for one reason or the other and it would therefore represent a deficit. But because we only spent say 60 per cent of what our ambitions for that particular year, it might appear to be a surplus, but really only in terms of accounting procedures.
EM: Mr. Khemlani was very concerned about how this matter was being handled. I think the question of possibly investing some of these funds came up. How was this handled?
AS: I don't see how one could even be considering investing funds you don't have since it was not cash at hand and
secondly, as an agency, any investment we would want to do would require the approval of the Ministry of Finance.
EM: You would be drawing down on these funds as required. From where would they be generated?
AS: It comes from our subvention and the subvention is in two parts: A portion comes from property tax and the rest is from deficit financing out of the Consolidated Fund.
EM: Did you try to explain to Mr. Khemlani what the procedures were that you were following?
AS: I tried. Several other board members tried. We just were not successful. One of the reasons we were not successful is that we consistently did not have our board finance committee for which Mr. Khemlani was responsible.
EM: Some may wonder, was it
responsible for you to have been
projecting substantially more than you were actually spending.
AS: Well, every year, we would set out a target for what we would want to achieve, both in terms of staffing and equipment and then we attempt to execute, based on the resources provided. If the resources are not provided good accounting practice doesn't allow you to go in and modify your original expectation to match your resources to make sure that you come out even. What you do is you
compare what you expected with what you received. If you have not received it and therefore could not spend it in that area, in terms of a budget comparison, you will see a surplus. If you have overspent against what you budgeted, then in the budget comparison, you will see a deficit.
EM: Let's come to the question of the contractors that are used as far as the landfills are concerned. How many of these arrangement are based on formal contracts?
AS: They are all based on a purchase order, not on a contract.
EM: Meaning?
AS: Meaning, the hours expected to be provided for is done on a purchase order to the particular supplier. These suppliers normally are itinerant suppliers. We require about 16 pieces of earth-moving equipment to properly move the solid waste tipped off on the tipping face by the tipping trucks that come in on a daily basis. It needs to be compacted and then covered with topsoil to avoid the stench due to decay and to avoid fires and the breeding of vectors on the landfills. We own about eight pieces of these types of equipment and we rent others on a demand basis. Sixty per cent of the solid waste generated by the country goes into the Riverton landfill which is on 80 acres of land. In addition, when we have
emergencies like fires or when we have extraordinary solid waste going into the landfill, like after a hurricane, special
provisions have to be made. A landfill is an extremely delicate location because if you should have a major fire, it's not something that you can put out with water. You have to use equipment; topsoil and you cut off the oxygen that gets to it. You have to separate the area burning from the other areas. It's a really involved exercise. Most of the equipment we use was not built for landfill activity and so was very unreliable and so you will see on our
service provider a host of persons.
Over the last two years, not by political 'cronyism', we stumbled into a supplier who I did not know at all. He was introduced to us. We found his equipment to be reliable; we found him to be reliable. And it turned out that in addition to other persons who have used equipment, he has turned out to be consistent there.
EM: Is it that he has subsequently turned out to have a political connection?
AS: Yes. He has a particular political affiliation. When I was introduced to him, I didn't know that political affiliation. I never asked. In this business it's not something that you do. You don't ask. I need to make a point: the amount of money we are talking about is minuscule. It is less than five per cent of the total expenditure on solid waste management in the country.
EM: You're talking about someone affiliated to the governing PNP?
AS: Yes.
EM: Now that this matter has arisen as far as political 'cronyism' is concerned, and the contracts which were not formalised from before the NSWMA was formed, how are you responding with that in terms of having it dealt with by the National Contracts Commission?
AS: The new dispensation for solid waste cleaning started with the removal of the responsibility from the municipalities in 1984. Within a year, it appeared that all the parks and markets companies had developed their solid waste scope of work and the MPM in particular, contracted persons to provide services in some areas. That contract was, I think, for three years. The contract was never renewed via signing a new contract, but it remained the basis on which compensation was calculated, taking into consideration inflation and any other adjustment to the scope of work that might have taken place. In 1994 an
extensive review was done by the
engineer, Mr. Bobby Evans, for which I found the documentation here. No new contract was signed but a letter outlining the new conditionalities, on top of the old contract, was issued to the current contractors.
EM: Was this a matter that was brought to the attention of the office of the contractor-general's as to how the agency proposed to proceed?
AS: No. When I became chairman of MPM in 1998, I saw what was in place and I must say, with the managing director at the time, and with the encouragement of the minister at the time (Arnold Bertram) we attempted to develop and in fact developed a tender package, which we put to tender in 2000. We went through the full tender exercise and we evaluated all the tenders in-house. We sent them to the National Contracts Commission (NCC), which in turn passed them on to a sector committee the construction sector committee, which after examining the conditionalities of our tender and the procedures we had adopted, indicated that they were unable to sanction it and returned the tender
package to us.
EM: Why were they not able to?
AS: Because the nuances relative to the solid waste sector were not in the guidelines they had in the construction sub-sector and so there were a number of areas in which they said they could not make informed pronouncements. That having been done, I wrote to the NCC and requested that as soon as possible, a set of guidelines for the solid waste subsector be done. That was done concurrent with the study that was being done to create the National Solid Waste Management Authority by an act of parliament. Once the act went through in 2001 and came into being April 2002, I decided that we needed to rationalise solid waste management islandwide. So we embarked on a concurrent set of exercises.
DIVESTMENTS
The first being to rationalise the service provided, the second being that we had to change the accounting system since funds were being accounted for centrally. The third thing was that we had to move to regulation sooner than later. That meant that in all the areas that we were doing the solid waste collection ourselves, we would divest to the private sector. To be able to do that one needed to first clean up those areas for which we were having private sector service provided. I unilaterally decided, and I emphasise, I unilaterally decided, that I would document what
existed in the Riverton Waste Shed as a basis on which discussions could be held with the service providers and also to
provide the government agencies who would be looking at providing us with the guidelines, as to what our scopes were, what the standards would be, what our expectations as an agency would be, and that was done. As soon as it was done, it was sent to the Ministry of Local Government and in a conversation
resulting from the problems we had with the Riverton inspectors, etc., I invited the contractor-general to come in and assist us. He sent his officers and he requested of us certain bits and pieces of
information. November last year, we gave him the contract book with all 69
contractors included and their details.
We gave him the specifications that we had developed and the standards that we had developed we also gave that to the Ministry of Local Government. And as we now speak, those private sector persons who provide us with service regardless
of how they were selected, now have a contract document which also gives the authority the basis on which they can be properly supervised and penalised
where there is need for them to to be penalised, etc.
I need to make the point, not an apology, not an excuse: 90 per cent of the contractors that are operating in the Riverton Waste Shed have been doing so between 15 and 17 years on the basis they do now. The only difference is that they have a current documentation. A few new contractors were selected. Again, 90 per cent of the new contractors were ex-MPM employees who had the skills and knowledge of sweeping and collection exercises at the execution level, who had failed at the upgrading standards in terms of their educational background and training.
IMPORTANT LEVEL OF SERVICE
And I had said to the public then and I say it now, we did not feel that we should lose the expertise of these persons because it was an important level of service that we needed, and accordingly they were contracted.
Then there were one or two other
persons who came into the system,
particularly one person who was an ex-general manager of MPM and there was a particularly difficult zone in Portmore and I requested her to assist me in developing and managing that zone. And she has been doing an excellent job. The calls and complaints from that Portmore zone, which is a large and complex zone, has dropped by at least 90 per cent.
EM: Did you not anticipate when you made that arrangement with that ex-general manager that there might have been charges of "cronyism"?
AS: No, I did not. And at this time, in the absence of guidelines, I would do it again. Earl, I do not have the luxury
of shutting down an operation and developing a system and then restarting the operation. Solid waste starts getting to be a problem within five days. I must collect it! I must find a methodology to collect it. I have accepted the challenge of concurrently carrying out the collection exercise with improving the systems. It is not going to happen overnight.
Part II will be published in
tomorrow's Gleaner.
