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PEC-SL PROPERTY TAXES AGREEMENTS ARE FLAWED ….AND MUST BE REVISITED!!

By: Winstanley.R.Bankole. Johnson

 

 

 

In my rustic mindset, the recent Radio Democracy 98:1 FM with a Mr. Mallador Sowe, (purported owner or driver of an enterprise outfit called PEC-Sierra Leone) did nothing to advance his endearment to a good many of us. So even  at this outset, and insofar as it concerns the collection of properties rates within Local Councils country wide, I will respectfully urge the government not to enter into or support any purported legally binding agreement with PEC-Sierra Leone, that might just ultimately officially sanction the exploitation of an already overburdened citizenry.

In fact if anything, Mr. Mallador Sowe emerged from that interview leaving more questions unanswered, and exposing him as a malleable front man being remotely micro-managed by a wide ring of handlers (who had possibly previously managed other pseudo-corporate enterprises that have crashed) that still have strong political connections, and who are hell-bent on bleeding property owners further, except that this time round, their intentions and actions will be officially sanctioned. That is to say once their plans succeed, they will then possibly be the only ones better positioned to amass as much surplus wealth (as all looting machines in Africa do)  as would put only them into pole positions to acquire shares in, or completely buy out Para-statals as and when they would be offered up for privatization.

Gaps

To my mind, credible indicators suggest a need to properly re-examine not only the capacity of PEC-SL to collect properties rates, but also the entire structure of the proposed agreement so that neither the government nor the Local Councils, nay property owners come off the worse for it. Permit me to detail as follows, a few of the gaps that evolved from Mr. Sowe’s interview-:

  • “PEC is a name and not an acronym, and it means just what it means – PEC”. (Credit Mallador Sowe). But what corporate organization of international repute would be operating under an alias designation that cannot be interpreted? Even acronyms applied to firms and organizations such as “KLM”. “KGB”, MOSSAD are abbreviations with meaningful interpretations.
  • What are the structures of the tariff on which they will be charging property owners and with whom (Government/Councils/property owners) were they agreed? In his regard, properties taxes are technically subject to triennial reviews, but of recent, profligate Councils like the Freetown City Council and the Western Area Rural District Council are wont to wily-nilly adjust levies upwards without prior notice or consultations. Could this lacunae not be well abused by PEC-SL in due time?
  • Who are the equity holders of PEC-SL and what are the percentages of their holdings? And by extension who are the local Directors of PEC-SL? Quite a few impressive names appear on their website but that does not answer my question.
  • What prior experiences do they (PEC-SL) have in property rates collection within or outside Africa? Mr. Sowe’s casual references to contacts in Liberia, The Gambia, and South Africa are empty marketing gimmicks that have revealed a clear intention to mislead this government into believing they have a capacity to deliver on those tasks, but which in fact is not true.
  • Whilst Mr. Sowe was boasting on air of PEC-SL’s hands-on experiences in many countries, their website postings on the same issue cleverly absolved themselves from that commitment, by a deliberate altering of the statement to read instead “…includes Key offices in South Africa, Namibia, Angola, Nigeria, Ghana and Zambia. So rather interestingly if you clicked PEC (hyphenated any of those countries), in none of them is any reference made to Mallador Sowe as either a Director (not even alternate) or a counterparty with whom they have ever done properties rates collection before, or intend to do so within the future.

For crying out loud, “PEC” is a generic name in several countries that is used by as varied a number of enterprises,  and it can mean anything – from cheap air tours agents,  to educational consultants, trading, export and manufacturing consortiums – just like the “Alibaba” trading websites.  In fact in Angola to be precise, PEC stands for “Pestolozi Education Centre”.

 

It is only here in Sierra Leone that “PEC” is doing “Smart Light Metering” and Property Tax collection, and in neither of each case did I notice a single evidence of a synergy between PEC-SL and any of the sub regional countries Mr. Mallador Sowe made references during his interview to wit-: The Gambia, Liberia and South Africa. For all anyone may care, The Gambia and not least South Africa will never (I repeat never) be as naive as us here as to ever contemplate ceding a sector with such a huge revenue generating potentials to Mr. Sowe – as a foreigner. God forbid!! But let me go back to more gaps in that Mr. Mallador Sowe’s 98:1 Democracy Radio interview.

More Gaps

  • If PEC-SL were such a robust and specialized Smart Light Metering and Property Tax collectors, why are they not publishing their recent year’s Balance Sheets and Financial Statements so as to allow the public obtain a glimpse of their past performances and to evaluate their short-term potentials? Mr. Sowe should produce the Audited figures and allow the facts will speak for themselves.
  • Incidentally and in my view, no CEO of international clout worthy of his salt, and with a multi-million dollars worth of investments, would be running in-between local Radio and TV stations to state his case. Nor would he, instead of following legal dispute resolutions processes, prefer to flunk his integrity via profuse apologies to a government minister. Should this man be trusted further?
  • Obviously collection of properties taxes fall under the provision of services under our Procurement Laws. But throughout that interview, it did not emerge (and we still do not know) when bids for an expression of Interests from eligible firms/organizations to assist any Council with cadastral management of city or other locations properties was ever advertised. So how did PEC-SL win those contracts?
  • Sowe also intimated during that interview that they (PEC-SL) have already signed an agreement with the WARDC – covering the entire Peninsular and Mountain villages now heavily built-up and which according to him can now boast of over 200,000 (Two hundred thousand) buildings. Regrettably what the Terms and Conditions in that “Agreement” look like remains (like the contracts to collect properties taxes elsewhere) shrouded in deep secrecy which possibly no other mankind beyond Mr. Sowe, the WARDC executives, MLGRD – and of course, Mr. Sowe’s internal and external handlers, have seen. The need to publicize these kinds of documents to avoid a repeat of the “Michael Abdulai/WAPORTMAN/SL Ports Authority” perpetual remuneration clauses for incumbent executives cannot be overemphasized.
  • What are that sharing parameters or retention percentages of the aggregate properties taxes contemplated between and amongst (a) PEC-SL (b) Government and (c) The Local Councils? How and why property owners should allow themselves to be so blindly committed into a financial arrangement they did not see beats my own imagination. Any wonder then that even with less than six months into the PEC-SL/WARDC agreement (of sorts) complaints of the absence of a publicized “Rates Schedule, excessive and irregular billing parameters abound?

Cadastral

For years, all Local Councils have been verbally impressed with the effectiveness of a cadastral properties mapping system that is yet to be “practicalized”. That cannot be denied. But could the system not have been best piloted on a “Build Operate and Transfer (BOT)” basis so that against a definitive timeline (say not more than twelve months), the Councils properties rates collection capacity (a major own revenue base) would have been extensively improved so as to reduce their reliance on government subventions? Put in another way, could the role contemplated by PEC-SL not be more effectively and accountably performed by a few of our reputable local Accounting firms and with the direct involvement of the Councils in the various localities so that eventually they would simultaneously (a) stimulate our economy, (b) reduce unemployment and (c) improve on the Councils’  “Own Funds” generating capacities?

This should be food for thought by a De-Centralization Secretariat whose remit it is to exploit such glaring capacity building potentials upon which the Local Councils can grow.

Fiat

From investigations, the Ministry of Finance and Economic Development whose prior fiat all Local Councils are by Law required to obtain before entering into any financial obligation – whether as borrower of lender – appears oblivious of any legally binding arrangement between WARDC and PEC-SL. So it wouldn’t be out of place to enquire whether in fact the MoFED did have an overview or prior knowledge of such property tax collection agreements between PEC-SL and Local Councils so as to have the aggregate proceeds included as a major revenue stream in our annual national budget preparation (see below).

Baseline

When you consider a statement attributed to the Deputy Minister of MLGRD in <awoko.org> on-line news of 14th November 2016 that his Ministry “is going to ensure that they harmonize the system in all nineteen Councils……..”  you will further  consider it most disingenuous that they would ever contemplate or support such a monopolistic empowerment of one single firm (PEC-SL) in the collection of properties taxes, having regard to the volumes of buildings to be handled to wit-: over 200,000 (two hundred thousand) within the WARDC and over 400,000 (Four hundred thousand) within the Freetown metropolis – not to mention approximately a further 800,000 buildings in all the other properties in the rest of the other 17 Local Councils. Even at a modest Le50,000 (Fifty thousand Leones) per structure, it means PEC-SL will be managing an aggregate portfolio in excess of Le70billion (Seventy Billion Leones) annually effective 2017.  The total portfolio could clearly exceed that conservative figure of Le70billion, when you further consider that more than a half of those buildings are multiple storey-blocks, and would therefore attract multiple rates above the Le50,000 baseline stated.

Synonyms

I believe it was to avoid such a monopolistic empowerment of just one mobile (GSM) company in this country that the government in its wisdom decided to open the playing field as wide as possible so that citizens can exercise their rights to choose from amongst the multiple GSM service providers. Why the MLGRD would not consider replicating same for properties taxes collectors, but would entrust the responsibilities to just one service provider – PEC-SL whose uncompetitive tariff structure cannot be challenged – beats my imagination.

Unless all PEC-SL “Agreements” are revisited, we will be left with two obvious monopolies: A “Sowe” at Flour Mill (which because of the new Customs Tariff increase from 10% to 35% has forced small-time flour importers like yours truly to close shops) and another “Sowe” officially empowered to be collecting our properties taxes countrywide. To better appreciate the risks inherent in those arrangements; I will leave readers to reflect on their primary school days lessons on “synonyms” and “antonyms”.

 

 

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