By NICO SCAVELLA

Tribune Staff Reporter

nscavella@tribunemedia.net

A $16m loan granted to the College of the Bahamas from a regional bank to assist in the institution’s transition to university status has been cancelled, The Tribune understands.

According to an email by Ronnie Stevenson, vice-president of operations at COB, obtained by The Tribune, the loan agreement between the government and the Caribbean Development Bank (CDB) for $16.1m to support the funding of phase one of the institution’s transition process has been cancelled.

According to the email, the consultancy to assist with phase two of the COB Transformation Project - Design Services was to be funded by this loan.

The email also said that consistent with terms and conditions of the loan agreement, the request for proposal (RFP) selection process for design services was subsequently “annulled.”

The Tribune spoke with Education Minister Jerome Fitzgerald yesterday for clarity on the matter, however he referred this newspaper to State Minister for Finance Michael Halkitis who declined to comment when asked.

The Tribune managed to contact COB officials by email on the matter, however an official response was not returned up to press time.

In 2014, the Christie administration moved a resolution in the House of Assembly for the government to borrow $16.1m from the CDB that was expected to cover 70 per cent of the $23.2m in costs to cover the first phase of COB’s transition to university status. The investment was expected to cover land acquisition and external works.

The interest rate on the agreement stood at 4.1 per cent, and was payable in 48 quarterly installments or 12 years, Mr Halkitis said at the time.

Mr Halkitis also told parliamentarians at the time that the government would fund the remaining 30 per cent of the process which totals $7,020,000. He also said there was a five-year grace period before the payments begin.

In September 2015, this newspaper reported how poor auditing practices at COB had prevented the institution from using the funds from the $16.1m loan.

The Tribune reported at the time how the college was at least four years behind in audits when the Christie administration moved to borrow the funds.

Former COB Council Chairman Alfred Sears told The Tribune last year that COB had since completed two of those four years of audits and said the progress had been “satisfactory” to the CDB.

Aside from preventing the college from accessing the money, COB’s failure to complete audits had also put the college in violation of the College of the Bahamas Act, which says that COB’s accounts must be inspected by an auditor appointed by COB’s Council every year.

In October 2015, COB President Dr Rodney Smith said that although the poor audit practices had prevented COB from drawing down on the loan, it did not hamper the college in its transition to university status.

COB was initially expected to transition into a university in July 2015. A new transition date has not been set.