Monday, April 22, 2024

WHAT MATTERS MOST: A fair deal?

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APART from its legacy of generally sound macroeconomic management, there is a widely held view, especially in academic circles, that Barbados’ development may be somewhat attributed to its inheritance of (1) the Westminster system of parliamentary democracy; (2) constitutional protection of property rights; and (3) a legal system rooted in English Common Law.
There is no doubt that the legal system has facilitated the ownership of property in such a way that the average Barbadian is able to have, for example, land titled which is eventually used to secure finance.
The system has therefore contributed to the advancement of several individuals who otherwise would have been unable to acquire some form of wealth, without necessarily becoming wealthy.
In fact, one of the reasons why Barbados is able to boast of having arguably the most even distribution of income in the region maybe a direct consequence of access to an effective legal system. Furthermore, our Constitution provides for the protection from deprivation of property. It however goes on to identify some circumstances under which a citizen’s property may not be protected.
Section 16(4) of the Constitution makes provision for the Government to take away the property of the citizen to be used for public purposes, but with adequate compensation to the citizen.
However does the Constitution make provision for a Government to take up the public’s property and use it for a private purpose without receiving adequate compensation? Furthermore, does it make provision for such large chunks of property to be used for a private purpose without having to go to Parliament for debate and approval?
No matter how noble the goal of building houses for Barbadians, even with zero lot lines, the privileges granted to the developers at Coverley are worthy of questioning within the context of property rights and our system of parliamentary democracy.
Having received the land at $3 per square foot from the National Housing Corporation (NHC), the developer deducts the land cost from the 1.5 per cent of the price which the developer determines with the approval of the NHC. In addition, a proportion of the expenses on the sale which are attributable to the NHC shall also be deducted.
In the face of these unknown costs and expenses, is it possible for the NHC to have to pay, rather than receive, money from Concepts?  
It is known that the cost of land has become an integral part of the pricing of a home in Barbados over the last 15 to 20 years. There is a need, given the deal, for the public to know how the developer arrived at the pricing of the home, especially the land component. It is a reasonable request because there is a very public element to this private sector project.     
This right is implied in the language of the contract: “NHC will approve the range of prices at which the residential units shall be sold and Concepts and NHC shall be responsible for agreeing the terms of the agreements for sale of the residential units but the price at which the residential units are to be sold shall be fixed by Concepts provided that the same shall be within the range approved by the NHC.”
For the NHC to have a price range it must know the costs of building a residential unit in this particular project.
This sweetheart deal for the developer gets better when it is responsible for cleaning and tidying at a monthly charge of $100 per premises. This charge will vary annually to reflect the cost of living index. What a deal!
Furthermore who is receiving the fatted calf in this agreement?
There is something inherently wrong in the way in which a Government is allowed to use public property for a private purpose without having to seek the approval of Parliament to determine whether or not the Government is being adequately compensated.
 Do the final prices of the residential units reflect fairness?
• Clyde Mascoll is a professional economist and former Government minister in the last Barbados Labour Party administration.

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