Udecott faces $50 million bill By ANDRE BAGOO Sunday, March 21 2010
WITH MAJOR WORK on the $3.2 billion Government Campus Plaza stalled, Udecott has begun the process of terminating contracts for the fit-out of the buildings at the project, a process which in one instance is estimated to cost taxpayers at least $50 million.
Sunday Newsday understands that Udecott has quietly started the procedure to terminate the $302.9 million contract awarded to Carillion (Caribbean) Limited to fit-out the Board of Inland Revenue Tower, which is earmarked to be one of the buildings which will host the Trinidad and Tobago Revenue Authority.
That fit-out contract would have seen Carillion, which had been awarded the $357 million contract for the construction of the project, install the necessary fixtures and furnishings for the building to be used in line with its intended purpose.
By letter dated December 15, 2009, the project manager for Udecott’s Government Campus Plaza, Turner Alpha, wrote Carillion asking the contractor to give a cost estimate for the termination of their services. The company had been awarded the fit-out building since September 2008.
“The client has requested that you formally submit a cost to terminate your services for the interior fit-out work,” a Turner Alpha project manager wrote. “The cost should be based on Udecott’s letter of acceptance dated September 8, 2008 and should include the base building deferred works. Please inform when this information will be submitted as we look forward to receive it as soon as possible.”
It is understood from industry insiders that the cost for the termination of the project would be at least $50 million, which would include costs such as loss of profit (as much as $45million) and the cost of having staff on stand-by for the project.
However, it is understood that Carillion has resisted Udecott’s moves to terminate, raising the prospect of arbitration and possible court proceedings on the matter which, itself, could result in further expenditure, in addition to a final termination sum. Carillion is also understood to have become concerned over Udecott’s failure to pay an advanced payment bond of $30million, as concerns over the state corporation’s liquidity now deepen.
Contacted yesterday Udecott chairman Jearlean John said she was unaware of the circumstances surrounding the project.
“I only got my instrument of appointment last evening,” John said. “I have not been to Udecott and I am not aware of the circumstances surrounding that or anything in relation to Udecott’s projects.”
Sunday Newsday also understands that the Udecott board, which last year decided to award a $313 million contract for the fit-out of the Ministry of Legal Affairs Tower to Malaysian firm Sunway Construction (Caribbean) Limited, in the face of public outrage over links between former Udecott executive chairman Calder Hart and the company, quietly rescinded a letter of award made out to Sunway.
Hart, who denied the links at the Uff Commission of Inquiry, resigned this month and fled the country after Malaysian documents emerged which disclosed family links between his wife Mrs Sherrine Hart and directors of Sunway.
While Udecott issued advertisements on October 14, 2009, defending its decision to issue a letter of award to Sunway, it later back-tracked on this decision.
“Udecott’s issuance of a letter of award to Sunway Construction Caribbean Ltd for the fit-out of the Ministry of Legal Affairs Tower was done after careful consideration of value for money, maintaining the completion schedule of the building and having the building fully operational, occupied and generating income in the shortest possible time frame,” the company argued in a paid advertisement. It gave no indications of rescinding the letter of award.
Udecott’s about-turn comes amidst word that none of the buildings at the Government Campus Plaza have been fit-out to date, with questions lingering in the minds of contractors over Udecott’s financial state as well as the State management of the billion-dollar project and how that may have had an adverse impact on its overall budget. It is said that Udecott now hopes to re-tender all of the fit-out contracts for the behind-scheduled project.
The Government Campus Plaza, which occupies an entire block of downtown Port-of-Spain off Wrightson Road and Edward Street, includes the Board of Inland Revenue and Ministry of Legal Affairs Towers, the Customs and Excise Building and a building designated to house the Ministry of National Security’s Immigration Department.
An industry source who has worked on the project this week lamented, however, that the project, which started since 2006 and had originally been scheduled for completion in 2008, has seen problems because of changes in the functions ascribed to each building. The State, the source said, appears to have constructed the buildings first with a plan for the use of the buildings but is only now working out the details of a plan.
“From the onset, there was no clarity of use from the Government,” the source said. “We are paying money to build the buildings and then paying more money to change designs for the inside of the buildings as the Government figures out what they are doing.”
As an example, the source noted that the building now designated to house the Ministry of National Security was first designed to house the Ministry of Education. The Government’s plans for the establishment of a Trinidad and Tobago Revenue Authority which would be housed in the Board of Inland Revenue Tower and Customs and Excise Building, was also not widely known until last year, three years after the project commenced.
“These people seem to be indecisive as to what layout they want. There have been meetings with heads of departments and even ministers but up to last year they kept suggesting changes, which frustrates the process and costs more. To just move a wall in a design costs the people of this country money,” the source said. See Special Report on Pages 18A and 19A.
