The Turks and Caicos Islands Investment Agency (TC Invest) has “run its course” and will be closed down, Governor Ric Todd announced on Tuesday.
He said that a review of the statutory body found that in spite of the best efforts of its staff, too many of TC Invest’s internal systems have not kept pace with the modern needs of an increasingly sophisticated business community.
According to the Governor, the accrued losses from TCInvest’s social lending strategies, although “laudable as an endeavour”, have left a widening financial deficit, which could well leave TCIG with liabilities approaching $10 million if “action is not taken quickly”.
TC Invest, which has a department in the island-capital of Grand Turk and one in Providenciales, became fully operational in 1995 and employs about 20 staff.
“It has become clear that TCInvest has run its course,” Governor Todd said in a press statement issued on Tuesday January 10th. “However, its key function of economic development is important to the future of TCI. A new inward development team will be created at the heart of government as part of the CEO’s Office, capable of developing with the five new ministries a tailored set of services to offer to local and international developers.”
Todd added: “I respect the achievements made by TCInvest staff but time has come to look at doing things differently. I hope we can draw upon the knowledge of its staff in different ways in the future and combine this with better organisational arrangements and more innovative ways of working in TCIG. This is the start of the statutory bodies’ reforms. I expect everyone to be able to demonstrate a clear reason to continue in their present form, show relentlessly they offer better value for money compared to services being performed in some other way, and display an efficient delivery services to citizens and businesses.”
According to the institution’s website, TC Invest is an independent agency in the islands with a mandate to attract new offshore investment, encourage entrepreneurship amongst the residents and provide financing to the local population.
TCInvest said it has responded to enquiries, been involved in investment proposals and negotiated agreements with investors, including several hotel resort complexes, expansion of the world's only commercial conch farm in Providenciales, Turks and Caicos Islands, establishment of a brewery facility, development of craft cooperatives, opening of an aircraft parts manufacturing concern and erection of a hydroponic garden.  
Governor Todd stressed that an in-depth review of TCInvest has concluded it was established with the best of intentions to promote business development both within TCI and from outside investors. In its earlier years, he said, it was instrumental in building the relationships that encouraged new investments and entrepreneurs.
He added, however, that in more recent years, during elected Government, its ways of working become less effective and its financial difficulties from past lending decisions have placed an increasing burden on the ability of TCInvest to achieve its aims.
“The worsening financial situation has had to prompt swift action, in order to protect public finances and ensure the key functions of TCInvest could be carried on effectively,” the Governor said, adding that he concluded that the essential functions of TCInvest, inward investment, business licensing, small enterprise support and loans, can be delivered more effectively through other TCIG or external means.
TCInvest will therefore be wound down as a statutory body, with a small inward investment team moving to the CEO’s Office. Its first task will be to extend and rebuild productive relationships with local and international developers.
A streamlined business licensing function will be moved back to the Ministry of Finance to benefit from the economies of scale within the ministry. TCInvest will continue to manage an approximately $21m loan book and small business loans, where poor repayment records from some of the loans have undermined the capacity of the organisation, until they are moved on to other financial institutions and the underlying TCIG liabilities to the Caribbean Development Bank and European Investment Bank are repaid. The loans from other creditors will also need to be addressed. It is estimated the winding up process may take three months.
Later, once more clearly defined, a business training and support function will be moved from TC Invest into the inward investment unit in the CEO’s Office, the Governor’s release said.
Todd said the intention is for some members of staff to be transferred quickly into the new inward investment and business licensing functions within TCIG, others may well be offered or find positions elsewhere in Government or chose to leave the public sector.  
“Assistance to all members of staff to find a clear pathway for the future will be an important part of winding up the organisation,” he continued. “In addition, to limiting a future deterioration of the financial position of TCInvest, further savings in Board, office and travel costs in the order of $200 000 should be possible.”
The review of TCInvest is part of a wider examination underway in the Governor’s Office on the achievements, roles and value for money encompassing, eventually, all 37 existing statutory bodies.  The work commenced in 2011 and is still in progress. It is likely to result in an overall reduction in the size of the statutory body landscape to one that is more affordable and more sharply focussed on adding value to the work of TCIG.  Some functions may be returned to the newly reformed TCIG ministries; others may cease or be undertaken in a different way.
* Uploaded Tuesday, January 10th, 2012