Dionne Rose, Parliamentary Reporter

The government intends, by the end of the current financial year, to legislate sanctions against public officials who flout its procurement guidelines - a proposal that won the immediate endorsement of Auditor General Adrian Strachan.

"... This is what we have been asking for, for some time," Strachan told Parliament's Public Accounts Committee (PAC) yesterday after the timetable for the legislative amendment was disclosed by Deputy Financial Secretary, Robert Martin.

"The Contractor General (Greg Christie) has echoed similar sentiments and so we believe it is most appropriate that the procurement requirements be elevated to the position of legal requirements and that appropriate sanctions should exists where there are breaches," Strachan said.

The PAC is currently conducting hearings into the US$43 million cost over-run on the controversial Sandals Whitehouse hotel project. Much debate has surrounded whether contracts on the project - jointly owned by the two Government agencies, the Urban Development Corporation (UDC) and the National Investment Bank of Jamaica (NIBJ) as well as Gordon 'Butch' Stewart's holding company, Gorstew - should have gone to competitive tender and what sanctions should apply to officials who fail to follow the rules.

Yesterday Martin signalled the Government's plans placed beyond doubt that those who, in the future, fail to follow the rules will be punished. A regime was now being drafted for approval by the Cabinet and its implementation will require amending Section 20 of the Financial Administrative and Audit Act.

Penalties could include the application of surcharges against officials and agencies.

"Our timetable on that for the law to be enacted is by the 31st of March next year, if all things are equal," Martin said.

While the UDC is at the centre of the current furore, it is not the first time there has been controversy over the failure of Government agencies to follow procurement guidelines. For instance, two years ago former Contractor General Derrick McKoy, severely criticised the board, particularly its then chairman, Alston Stewart, and the management of the National Solid Waste Management Authority for their breach of procurement rules.

Ironically Stewart, whose private company Nevalco Ltd., acted as the UDC's project manager at Sandals Whitehouse, is again the centre of current controversy, accused of mismanaging the project.

While Martin and Strachan were clear that the procurement rules applied to Ackendown Newtown Ltd., the vehicle used for the Sandals Whitehouse Development, UDC officials continued to insist that they did not believe so at the time of awarding contracts.

"Because this company (Ackendown) was not a subsidiary of either the UDC, NIBJ or Gorstew, it was our honest belief that the government procurement guidelines did not apply," said the UDC's CEO Marjorie Campbell.

The UDC's argument, laid out by Campbell and its former executive chairman, Dr. Vin Lawrence, that when these contracts were awarded at the start of the decade the National Contracts Commission had not yet issued guidelines and it was not clear who would be subject to the rules.

But Martin suggested that even so, rules for government contracts existed since the 1980s and there were sector committees that might have considered those awarded for Sandals Whitehouse.

While Strachan was ostensibly sympathetic to a view that there might be other interpretation, he was personally in no doubt that the procurement rules applied to the hotel project.

"It's no doubt in my mind that the award of the contract to Ashtrom ought to have followed the government procurement guidelines at that time," he said. "(It is) very clear you needed to go to competitive tender, you needed to get the National Contracts Committee's recommendation, you needed to get Cabinet's approval."

Added Strachan: "In my own mind, I am satisfied that it did apply to them because the Government through two of its agencies had controlling interests in the organisation. So to me it is clear, but I can understand that others can have some doubt as to whether it should have applied."