NHT remains mum on settlement with developer in $2.5b contract dispute
Published:Sunday | January 21, 2024 | 12:10 AM
The state-owned National Housing Trust (NHT) has remained silent on details of the deal it has struck with a developer it accused of not delivering 200 houses for which it advanced $650 million.
A week ago, attorney-at-law Michael Williams confirmed that “there was a mediated settlement” between his client, Dexim Holdings Limited, and the NHT in the dispute that arose over a $2.5-billion contract.
Under a two-year guaranteed purchase agreement signed in August 2019, the NHT committed to buying 200 houses at $12.5 million per unit in Dexim Holdings’ Out of the Blue development in Discovery Bay, St Ann.
The agreement was amended and the deadline extended to August 2022.
However, the NHT filed a lawsuit against Dexim a month later, alleging that despite advancing $650 million to Dexim, it had not received any of the houses and that the company was even selling lots assigned to it. The NHT admitted to making payments before receiving the designs.
The company disputed the allegations and insisted that its operations were significantly impacted by the COVID-19 pandemic and the resulting high costs of goods and services.
Dexim’s attorney confirmed the matter was heard in court on January 9, where the parties advised of the settlement and agreed to court orders, issues he declined to discuss.
The NHT, which is funded through a tax on employees and employers, reports directly to Prime Minister Andrew Holness.
It confirmed receiving Sunday Gleaner questions on January 10, but has still not provided any response.
Among the questions were what binding commitments did the NHT secure from Dexim regarding the concerns that prompted the court action and what commitments did the NHT make under the settlement.
Repeated emailed requests for an update last week were not acknowledged.
Details of the deal are key to know whether the NHT has agreed to accept any of the units and at a higher price than the initial $12.5 million. The parties did not agree to escalation costs in the original contract.
Dexim had proposed in 2022 to deliver 50 houses at a cost of $18.5 million.
The opposition People’s National Party has urged Holness to speak on the matter.
“Where are the 200 houses that the NHT contributors should have gotten by now?” questioned party representative Zuleika Jess at a political meeting on January 14.
“In 2016, the Andrew Holness-led Government approved a $2.7-billion licence to a company called Caricel, and this licence was approved by Andrew Holness to an individual who the contractor general found had adverse traces ... . [Three] years later, the same Andrew Holness Government used the NHT to approve an agreement for $2.5 billion for NHT money – your money –, to be used to build houses by that individual who was a major stakeholder in the first company,” Jess said.
Dexim, which defaulted on payments to investors in the project in 2022, insisted in responses to NHT court filings that the trust would not lose any money because it took out a bond guaranteeing a refund of the funds that were advanced.
There is also scrutiny on the performance of the NHT’s guaranteed purchase scheme as well as the level of diligence it did before entering the multibillion-dollar agreement in 2019 and engaging with a company led by George Neil.
In 2016, the Office of the Contractor General told the Holness administration not to give a $2.7-billion telecoms licence to a Symbiote Investments Limited, company linked to Neil because of “adverse traces” against him.
Holness went ahead, but his administration was forced to revoke the licence less than a year later.