Friday 17 September 2021

Operation Lightning Rental: Three Government Agencies Simultaneously Negotiate Multimillion Dollar Rental Contracts In 22 Days

Paying the bills


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Paying the bills


COSTA RICA NEWS – “The premier place to do business” is the slogan of the Sigma Business Center, a 70.000 square metre glass and steel office building located in the heart of San Pedro, next to San Pedro Mall. It is also home to three major public offices, though its facade and reception bear no signs to inform the public of their existence.


Sigma is owned by Donal Formal, also owner of San Pedro Mall, who has the distinction of tying up at the same time three major rental contracts, with three government ministries, valued at US$7.9 million dollars in only 22 days. And without payment of any real estate broker or consulting fees.

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The contracts were negotiated and executed within the last days of the previous administration, whose term ended on May 8, 2014.

According to a detailed report by the SEMANARIO UNIVERSIDAD, the then minister of the Condición de la Mujer and president of the INAMU (Minister for the Status of Women and INAMU president), María Isabel Chamorro, the then ministro de Vivienda (Housing Minister), Guido Alberto Monge and ex-viceministro de Paz (former deputy minister for Peace), Max Loría, signed the deal for the rental of space prior to leaving office.

Even more interesting is that the three high ranking government officials of the Chinchilla Miranda administration (2010-2014) were able to work parallel and simultaneously during the last days of the government, tying up the property, in three separate rental contracts, each for five year terms.

Two of the contracts include a penalty clause of US$1.2 million dollars for early termination.

Cover of the weekly university paper.
Cover of the weekly university paper.

An investigation by SEMANARIO revealed that the Status of Woman and Housing ministry contracts were signed directly with the company  Plataforma Mercantil S.A., controlled by Donald Formal. In the case of the Ministerio de la Paz, the contract before signing went out for tender, Sigma winning out two other bidders, who were rejected, one for failing to meet technical and the other legal requirements.

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The current ministra de la Condición de la Mujer y presidenta del INAMU, Alejandra Mora, says the leased buildings do not meet the needs of the institution, basically for being “too expensive”, the rent way higher than they can afford. “The speed, according to the timeline of the administrative actions reveals that in 22 days the INAMU contracted the property, ignoring the existence of records relating to the market survey, dismissing other rental options…” said Mora.

The haste also has upset the current Minister of Housing, Rosendo Pujol, who describes the fast track contracting as “unfortunate”. Pujol said the former minister left him little leeway to make changes to the contract. “Now whatever change we want to make will cost us a lot of money,” said Pujol.

The only ministry with a fighting chance to make changes are at Paz. The current minister, Victor Barrantes, told SEMANARIO that he is looking into the rescinding of the rental contract that is overly expensive and out of budget. “We clearly need to move…” says Barrantes, but the rent for the new building is ¢10.4 million colones monthly, some eight times their current rent.

Lawyer Guido Granados, former legislator in the Monge Administration (1982-1986), and representing Sigma project says that the lease inquiries came directly from the government, that the rental rates were adjusted to the appraisals conducted by the Ministry of Finance and emphatically denied any political influence. “In absolute, no relation with Laura Chinchilla, or any minister. This was something totally alien to politics,” said the lawyer.

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Defending their actions, former minister Monge told the SEMANARIO, “for a long time the occupational safety committee was saying that it was necessary to move due to overcrowding … the direct contract was done because the Comptroller allowed us and because we did not move from the area we were in, near the Banco Hipotecario de la Vivienda (Mortgage Bank) that is very important to us…”

Former president of the INAMU, Maria Isabel Chamorro, defended the speed in which the contract was negotiated as part of her effective implementation of the budget, a feature of her administration. “In eight  months I did what had not been done in the past,” said Chamorro.


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Paying the bills
"Rico" is the crazy mind behind the Q media websites, a series of online magazines where everything is Q! In these times of new normal, stay at home. Stay safe. Stay healthy.

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