Dionne Rose, Parliamentary Reporter
Prime Minister Portia Simpson Miller (right), Industry and Commerce Minister, Phillip Paulwell (left), and Finance Minister Dr. Omar Davies examine a damning report from the Office of the Contractor General on the Sandals Whitehouse hotel construction project during yesterday's sitting of the House of Representatives. - RUDOLPH BROWN/CHIEF PHOTOGRAPHER
CONTRACTOR GENERAL Greg Christie has accused Government entities and officials, including then chairman of the Urban Development Corporation (UDC), Dr. Vin Lawrence, of committing flagrant breaches of procurement procedures on
the controversial Sandals Whitehouse construction project.
In the long-awaited report on the Contractor General's investigation into the beleaguered Westmoreland hotel project, wracked by multimillion US-dollar overruns, Mr. Christie recommended that the legislature ensure public bodies and public officials who breached procurement procedures be held accountable.
The Contractor General's findings were tabled in the House of Representatives yesterday, a week after it was delivered to Parliament and almost a month after the investigations were concluded.
DECISIVE LEGISLATURE
"We would respectfully recommend that the legislature acts decisively and with urgency to ensure that public bodies and public officials who, with flagrant and glaring impunity, ignore the Government's procurement procedures, are made to be held punitively accountable for their misdeeds and breach of the public's trust," Mr. Christie stated in his report.
The 73-page report claimed Dr. Lawrence, who has since left the UDC, which was designated the project manager in 2001, acted in conflict of interest when awarding some of the contracts on the project.
Of note, the Contractor General said, was an J$18.8 million contract that was awarded to Jentech Consultants Limited, which is a civil and structural engineering entity in which Dr. Lawrence was a long-standing shareholder and director.
Mr. Christie also noted that contracts were awarded to Gorstew Ltd., in the amount of US$421,068, and Appliance Traders Limited, in an unknown amount. Sandals boss Gordon 'Butch' Stewart is the presumed principal in both companies.
Gorstew Ltd. was also, at the time of the award, a participant in NEWTOWN, the entity on whose behalf UDC acted.
"The referenced circumstances have undoubtedly raised compelling evidence of a conflict of interest, and absence of transparency, a lack of competition and the absence of arms length approach in the award of the subject consultancy contracts," the report said.
Last night, Christopher Zacca, a director at Gorstew, told The Gleaner that the Contractor General's report contained inaccuracies and misstatements with regard to that company's involvement on the project. He said a response would be provided in full at a later date.
The Contractor General said that, since Dr. Lawrence had, as UDC chairman, headed one of the National Contracts Committee's (NCC) seven Sector Committees, it would have been reasonable to presume he would have been aware of the applicable Government procurement procedures.
The report also stated that none of the consultants hired on the project were selected or engaged impartially or through a competitive process.
"Prior to their formal engagement by NEWTOWN, these consultants were all hand-picked, and their contract terms negotiated," Mr. Christie said of all 24 consultants who worked on the project.
Turning to the overruns, which the Contractor General calculated at more than US$40 million, Mr. Christie said reports that the increased costs of the project and its delay in completion were due substantially to a change from a Beaches concept to a Sandals concept were plausible.
He said roughly US$22 million of the project's US$39 million variance in construction costs was attributable to a substantial change in the scope of works. The remaining US$17 million arose mainly from the overrun in time.
In his recommendations, the Contractor General ordered the UDC, in its capacity as the project manager, with the assistance of the project's quantity surveyor, to produce a comprehensive report detailing the rationale and justifications for the changes and cost overruns.
The Contractor General said that, on completion of that report, an evaluation should be carried out by the Auditor General. He said Parliament should recommend that the Auditor General carry out a financial audit to determine the total monies spent.
He said the Auditor General's findings, which should be submitted to Parliament, should include a determination as to the equities and liabilities of each of the entities that are parties to the NEWTOWN Heads of Agreement.
Responding to the report, the UDC said in a release that its involvement in the Sandals Whitehouse project was not intended to be a deliberate attempt to violate Government policy, as it was not the policy of the corporation to breach Government procurement guidelines.
The corporation also pointed out that the NCC came into effect in 2000, did not issue guidelines until 2001 and, in doing so, made reference to contractors only and not to the appointment of consultants. The agency said the project consultants had commenced working with the contractor prior to 2000 and would not have fallen within those guidelines.
Karl Samuda, Opposition Member of Parliament, who has kept the matter alive in Parliament over the past year, said the breaches were a "blatant disregard of rules and regulations that govern public contracts".
He said the Opposition was demanding that the report be sent to Parliament's Public Accounts Committee, along with the Hylton Report on the project as well as the forensic audit.
"This would enable all players to come before Parliament to explain all aspects of this project, including the overruns and how it came to take place," Mr. Samuda said.
