SANTO DOMINGO.-The General Directorate of Public-Private Partnerships (DGAPP) indicates that former President Danilo Medina approved, through a decree dated December 11, 2015, the creation of the Trust for the Construction of Low-Cost Housing in the Dominican Republic, also known as the Juan Bosch City Trust, without complying with Law 340/06 on Purchases and Contracts for Goods, Services, Works and Concessions.
The entity says that this is evident from the issued decree, which only includes as legal considerations Law No. 189-11, of July 16, 2011, for the Development of the Mortgage Market and Trust in the Dominican Republic and Law No. 1-12, which establishes the National Development Strategy 2030.
"The decree states that the Juan Bosch City Trust was intended to create an independent financial structure for the transparent and efficient administration of the trust assets, in order to ensure the proper development of a Low Cost Housing Construction program, through the execution of the actions and works necessary for its construction and habitability, including the activities for the financing of said works," a press release indicates.
The executive director of the General Directorate of Public-Private Partnerships (DGAPP), Sigmund Freund, assures that, regarding public procurement and contracting processes, “the contract omits to include Law 340/06 as the legal framework for execution and indicates that in all procedures for the purchase of goods and contracting of natural or legal persons for the execution of works or provision of services, the Trust Committee would be ultimately responsible for decision-making.”.
This body was composed of four ministers and a director general. Freund explains that the Trust Committee was responsible for the trust's operating expenses, authorizing project budgets, infrastructure works and other civil works, and defining, through internal regulations, memoranda or instructions, the rules and procedures for the procurement of goods or contracting of services.
To develop the project, the State contributed to the trust estate the right to use the Master Plan, valued at more than RD$ 88 million; a property in Boca Chica with an area of 1,400,000 square meters and a value of RD$ 550 million and a plot of land in the National District of one million square meters valued at RD$ 256 million.
In this regard, it is noted that the assets and rights, of a movable or immovable nature, present or future, corporeal or incorporeal, tangible and intangible, contributed by the State could be given as collateral for the financing of a future debt contracted by the Trust through loans, mortgages or other leverage instruments.
“It was precisely the Trust Committee that was responsible for approving amounts, conditions and terms of securities issuances, indebtedness and granting of guarantees, charged to the Trust Assets,” says the DGAPP executive.
Specifically, point 2.2 of the decree stipulates that “the assets and rights that make up the Trust Estate may be given as collateral to support debts and/or financings agreed upon by the Trustee, charged to the trust estate, in accordance with the guidelines and instructions previously given by the Trust Committee, and such guarantees may not be agreed upon for a term exceeding 20 years.”.
