Tuesday, 20 May 2014

Could it be time the JDC curtailed its lofty ambitions?

The Jersey Evening Post's online website no longer prints any selection of "Letters to the Editor", which is a shame, because there are some very good ones. To take care of this hiatus, I will repost occasional letters on this blog. This excellent letter, which deserves a wider audience, is by Dave Cabeldu.
Readers may also be interested in my yesterday's post looking at the Financial Statements of the JDC.
Could it be time the JDC curtailed its lofty ambitions?
From Dave Cabeldu.
HAVING followed with interest the saga of the future of the Esplanade car park as planned by the States of Jersey Development Company since their formation in June 2011, and on listening to the facts emerging at the States debate following a proposition brought by Senator Alan Breckon in March of this year, I became intrigued as to what this company was about.
The answer is interesting and muddled.
JDC was itself a result of an attempt to clarify responsibilities and accountabilities surrounding the development of publicly-owned property and thereby improve its transparency. It would also relieve the States Assembly of having to be party to each and every decision taken about it. In short, JDC, which is owned by the States, but operates as, a separate legal entity outside the States, would take over responsibility for the development of publicly-owned land and buildings. As such, it would have its own board of directors and would be able, without continual reference to the States, to buy, sell and develop property
This well intentioned rationalisation, however, had a flaw which very soon became evident. Although the legal entity could now get on with its business alone, it was a fully owned subsidiary of the States and there were only two shareholders; the States Greffier with 19,999,999 shares and the Treasury Minister with one share. In accordance with precedence, the former did not exercise his rights so that, in effect, the latter became, de facto, the only link between JDC and the States.
Senator Philip Ozouf, the current Treasury Minister, contrary to the stated requirement to do so, has not shared JDC's business plans with the Assembly. The States has thus sleep-walked itself unwittingly into a very precarious situation since both planning and implementation for all this has effectively been transferred to one person, Accountability for performance is unclear.
From a starting point of being. given the Esplanade car park for a nominal price of £1, with its income of £759,000 per annum, this company has an. enviable advantage that no other company does, To date £4m has been spent on the Esplanade proposals without a penny of income yet being evident anywhere on the horizon. The JDC directors have received emoluments of £400,000 in salaries plus 142,000 in bonuses!
The board of directors is headed by Mark Boleat, a highly respected City of London financier and he, together with Senator Ozouf have, almost to the exclusion of all other States building projects, been directing JDC's efforts and resources towards the highly controversial creation of a massive office development sited on the Esplanade car park.
The only real financial information that is available to the States and the public comes from JDC's annual financial statements which, by law, have to be published within six months of their financial year-end (i.e. after the horse has bolted), but JDC does not even set these out so as to indicate the financial status of their most important project. Furthermore, the public are not invited (or allowed) to attend the AGM to raise questions as to how JDC's investment of public resources has been used and to form a judgment on the directors' emoluments. The only attendees are the company's board and the two above-mentioned shareholders.
The decision of the Royal Bank of Canada to go with alternative and proven private developers surely signals that the International Finance Centre as promoted will not be viable, and the availability of other already approved `Grade A premium office space coming on stream will soak up any other prospective tenants. Could it be that it is now time for the JDC to curtail its ambitions as developers for the finance sector and place greater emphasis on matters which will have more benefit for the public who are increasingly alarmed at seeing their savings being frittered away?

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