Vin Lawrence, head of the Urban Development Corporation, which was heavily criticised by the Contractor General last week.
The following is a statement
by the Urban Development Corporation on the Contractor General's report on Sandals Whitehouse.
THE REPORT of the Contractor General on
the Sandals Whitehouse project, we have been advised, will be tabled in Parliament today, July 18, 2006. As the agency with project management responsibilities for the project, the Urban Development Corporation (UDC) acknowledges its receipt of a copy of the report on Thursday afternoon, July 13, 2006.
The corporation is currently examining the report and will be providing a detailed response as soon as we have completed our examination.
The UDC is gratified that the Contractor General's overall assessment satisfies him that the hotel represents value for money, given the works that were completed on the ground.
We note that the Contractor General in his investigation addresses the roles of the equity partners in the Ackendown Newton Development Company, the role of the contractors, consultants, project managers and operators and it is our intent
to provide a comprehensive response to these matters and his recommendations.
PROCUREMENT PROCEDURES
Preliminarily, however, the UDC wishes at this time to comment in some detail on the issue of procurement procedures which are dealt with extensively in the report. For clarification of issues relating to this, we wish to point out that:
The report indicates that the hotel project commenced in 1998 by Gorstew Limited. This was prior to the joint venture partnership and the UDC involvement in the project. In fact, the first designs commenced earlier in 1991/1992.
With regard to the procurement of consultants, the report correctly identifies on Page 17 that a core team of consultants was established and had working relationships with each other prior to the takeover of the project
by the Ackendown Newtown Development Company. We note, however, that whereas specific mention was made of some consultants; the engineers, some of whom were on the team from project conception in 1991/92, were noticeably not mentioned.
On Page 17 of the report it is mentioned that the contractor had been selected and commenced working with the designers in 2000. These 'designers' were the main consultants on the project who had been selected and had commenced preparation of architectural and engineering designs and drawings for the project prior to the UDC being selected as the project manager. It should be noted that this is inclusive of the engineering firm, Jentech Consultants, which was requested by Gorstew to prepare engineering drawings for the project before any involvement by the UDC.
MERIT
When the joint venture partnership was formed, the decision was taken to continue the services of consultants based on merit and also because it was more cost-effective and timely to continue with the consultants who had already done significant amounts of work on the project rather than to select new ones. It was on that basis that the development company decided to enter into formal contract arrangements with them.
The letter of recommendation for appointment which was written to the consultants by the UDC was done after negotiations had been held to reduce their fees into fixed fees denominated in Jamaican currency to achieve savings for the development company based on the development budget. An analysis of the fees agreed and paid will show that they ranged from a low of 0.39 per cent to a high of 1.88 per cent of the original construction sum of US$47.2 million, which is well below the rates normally paid in the industry for these kinds of services. After securing the consultants' agreement for these fixed fees in Jamaican dollars, all the consultants were advised in writing by letter in the same form as that printed in the report as addressed to Jentech and subsequently entered into formal contracts with Ackendown Newton Development Company Limited.
It is not the UDC's policy or modus operandi to flaunt or breach the Government's procurement guidelines and these policies are faithfully adhered to by the corporation and its staff in all our projects.
PECULIAR SITUATION
The Sandals project should be viewed in its peculiar situation as one which had commenced outside of the UDC by a private sector developer who already had a core team of consultants working on the project. We subsequently entered in a joint venture arrangement with this company to complete the same project. The continuation of this project was in no way intended to be a deliberate attempt to violate government policy.
As a matter of fact the National Contracts Commission (NCC), although coming into effect in 2000, did not issue its guidelines until 2001 and in doing so made reference to contractors only and not to the appointment of consultants. The consultants who had commenced working with the contractor prior to 2000 would not have fallen within those guidelines.
The UDC was established in 1968 with the mandate to make development happen and in 38 years of service to Jamaica, the corporation has earned a commendable track record of being a catalyst and facilitator for sustainable development in many areas and sectors of our economy. As a matter of fact we have outstanding achievements in terms of the provision of tourism infrastructure and management and the hotel in Whitehouse, Westmoreland, was conceptualised as a catalyst for further development on our south west coast, a promise it is already beginning to fulfil.
It is, therefore, very regrettable that the construction of the hotel has resulted in controversy.
The UDC remains committed to facilitating all efforts to investigate and examine the issue relating to the project.
