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Gov't defends hefty fee paid to Hill's firm
BY PATRICK FOSTER Observer writer fosterp@jamaicaobserver.com
Friday, October 16, 2009
The Government is paying former banker Aubyn Hill's firm a hefty $1.9 million monthly for overseeing the divestment of the bleeding Sugar Company of Jamaica (SCJ).
Aubyn Hill
Invoices submitted to the agriculture ministry by Hill's consultancy, Corporate Strategies Ltd - copies of which were obtained by the Observer - show that the heavy fees include reimbursable remuneration of just over $70,000 and $85,000 for a driver in July and August, respectively.
Yesterday, the Observer tried without success to contact Hill for comment. However, he defended the payments in an interview on Radio Jamaica (RJR), saying that they represented value for money.
"The issue is whether you're getting value for money, it's not whether you can afford to pay me," Hill told Janice Budd in an interview on the station's evening news and current affairs programme Beyond the Headlines.
"Last year the Government paid out $4.5 billion to subsidise the sugar industry. Can you afford to keep it?" he questioned in clear reference to the SCJ, which is subsidised by the state.
". is it worth that subsidy that we all have to pay as taxpayers, or you get qualified, capable people to negotiate on your behalf? That is the issue, are you getting value?" the former banker added.
Hill also waved his academic and professional credentials in an effort to justify the fees. "I bring to the table 23 years of formal education, the last two of which are from Harvard Business School, and about 33 or so years of international banking experience from around the world, negotiating with all kinds of people," he told RJR.
The Cabinet appointed Hill in July last year to head an implementation team during the heat of negotiations with Brazilian company Infinity Bio-Energy for the sale of the five sugar companies owned by the SCJ.
The Bio-Energy negotiations fell through in January and the Government extended its contract with Corporate Strategies to facilitate the SCJ sale.
Last night, Agriculture Minister Christopher Tufton also came to Hill's defence, arguing that the Cabinet's decision to hire him to handle the negotiations - for which his firm has so far been paid approximately $27 million - was indeed "value for money".
He described concerns raised about the payments as "overreaction without consideration of the variables".
"If it costs $30 million to divest something that costs government $5 billion, how can that not be value for money," Tufton insisted in an interview with the Observer.
Tufton, acknowledging the "enormity of the task", praised Hill for the sale of two of the five sugar estates, adding that negotiations are ongoing in respect of the sale of the remaining three estates.
In a late-evening press release the agriculture ministry said that it is "satisfied that it has been receiving value for this expenditure based on the deliverables agreed in the contract".
The release added that the expenditure to Corporate Strategies is way below what it has cost the Government to engage similar services with respect to the divestment of other State entities.
A timeline and terms for a possible extension of Corporate Strategies' contract was, however, not given.
"As soon as we have divested the remaining three factories this arrangement will come to an end and the ministry is monitoring very closely the entire process to ensure that the divestment process is concluded as early as is practicable," the agriculture ministry said.
http://www.jamaicaobserver.com/news/..._MONTHLY_.asp#
BY PATRICK FOSTER Observer writer fosterp@jamaicaobserver.com
Friday, October 16, 2009
The Government is paying former banker Aubyn Hill's firm a hefty $1.9 million monthly for overseeing the divestment of the bleeding Sugar Company of Jamaica (SCJ).
Aubyn Hill
Invoices submitted to the agriculture ministry by Hill's consultancy, Corporate Strategies Ltd - copies of which were obtained by the Observer - show that the heavy fees include reimbursable remuneration of just over $70,000 and $85,000 for a driver in July and August, respectively.
Yesterday, the Observer tried without success to contact Hill for comment. However, he defended the payments in an interview on Radio Jamaica (RJR), saying that they represented value for money.
"The issue is whether you're getting value for money, it's not whether you can afford to pay me," Hill told Janice Budd in an interview on the station's evening news and current affairs programme Beyond the Headlines.
"Last year the Government paid out $4.5 billion to subsidise the sugar industry. Can you afford to keep it?" he questioned in clear reference to the SCJ, which is subsidised by the state.
". is it worth that subsidy that we all have to pay as taxpayers, or you get qualified, capable people to negotiate on your behalf? That is the issue, are you getting value?" the former banker added.
Hill also waved his academic and professional credentials in an effort to justify the fees. "I bring to the table 23 years of formal education, the last two of which are from Harvard Business School, and about 33 or so years of international banking experience from around the world, negotiating with all kinds of people," he told RJR.
The Cabinet appointed Hill in July last year to head an implementation team during the heat of negotiations with Brazilian company Infinity Bio-Energy for the sale of the five sugar companies owned by the SCJ.
The Bio-Energy negotiations fell through in January and the Government extended its contract with Corporate Strategies to facilitate the SCJ sale.
Last night, Agriculture Minister Christopher Tufton also came to Hill's defence, arguing that the Cabinet's decision to hire him to handle the negotiations - for which his firm has so far been paid approximately $27 million - was indeed "value for money".
He described concerns raised about the payments as "overreaction without consideration of the variables".
"If it costs $30 million to divest something that costs government $5 billion, how can that not be value for money," Tufton insisted in an interview with the Observer.
Tufton, acknowledging the "enormity of the task", praised Hill for the sale of two of the five sugar estates, adding that negotiations are ongoing in respect of the sale of the remaining three estates.
In a late-evening press release the agriculture ministry said that it is "satisfied that it has been receiving value for this expenditure based on the deliverables agreed in the contract".
The release added that the expenditure to Corporate Strategies is way below what it has cost the Government to engage similar services with respect to the divestment of other State entities.
A timeline and terms for a possible extension of Corporate Strategies' contract was, however, not given.
"As soon as we have divested the remaining three factories this arrangement will come to an end and the ministry is monitoring very closely the entire process to ensure that the divestment process is concluded as early as is practicable," the agriculture ministry said.
http://www.jamaicaobserver.com/news/..._MONTHLY_.asp#
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