The General Directorate of Public Private Partnerships (DGAPP) indicates that former President Danilo Medina approved by decree of December 11, 2015 the constitution of the Trust for the Construction of Low-Cost Housing in the Dominican Republic, also called the Ciudad Juan Bosch Trust, without complying with the Law 340/06 on Purchases and Hiring of Goods, Services, Works and Concessions.
The entity says that this is clear 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 the Trust in the Dominican Republic and Law No. 1-12, which establishes the National Development Strategy 2030.
"The decree states that the purpose of the Ciudad Juan Bosch Trust was to create an independent financial structure for the transparent and efficient administration of the trust assets, in order to ensure the correct 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"indicates a press release.
The executive director of the General Directorate of Public-Private Partnerships (DGAPP), Sigmund Freund, assures that, in relation to public procurement and contracting processes, “the contract fails to include Law 340/06 as the legal framework for execution and indicates that in all procedures for the purchase of goods and the hiring of individuals or legal entities for the execution of works or provision of services, the Trust Committee would be ultimately responsible for decision-making”.
This body was made up of four ministers and a general director. Freund explains that the Fiduciary Committee was responsible for the operating expenses of the trust, authorizing the budgets of the projects, infrastructure works and other civil works and defining, through internal regulations, memorandums or instructions, the regulations and procedures for the processes purchase of goods or contracting of services.
To develop the project, the State contributed to the trust patrimony 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 piece 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 chattel or real estate nature, present or future, tangible or intangible, tangible and intangible, contributed by the State could be granted as a guarantee to finance a future debt contracted by the Trust through credits , mortgages or other leverage instruments.
“It was precisely the Fiduciary Committee that was responsible for approving amounts, conditions and terms of issuance of securities, indebtedness and granting of guarantees, charged to the Trust Assets”, assures the top executive of the DGAPP.
Specifically, point 2.2 of the articles of the decree stipulates that “the assets and rights that make up the Trust Assets may be granted as collateral to support Debts and/or Financing contracted by The Trustee, charged to the Trust Assets, in accordance with the guidelines and instructions previously given by the Trust Committee, not being able to agree on said guarantees for a term that exceeds the duration of 20 years”.