The Tribune

By AVA TURNQUEST

Tribune Staff Reporter

aturnquest@tribunemedia.net

FORMER Prime Minister Hubert Ingraham’s decision to cancel the previous contract awarded to Holiday Industrial Builders International (HIBI) was “purely for political expediency”, lawyers representing the company said yesterday.

Attorney Kelphene Cunningham fired back at criticisms over the government’s decision to award HIBI a $20 million contract for the construction of a new Ministry of National Security building – a replica of the terminated project on which costs rocketed from $5.9 million to just over $14 million under the company’s purview.

HIBI’s legal counsel challenged the termination and were successful in arbitrating the matter, according to Ms Cunningham, who said the total sum of money paid to HIBI upon completion of arbitration was “just shy of $700,000”.

Ms Cunningham said: “It was determined that the contract was terminated without cause. We won, all of the materials in storage were returned to the government and we got our money. And that is the end of the matter.”

Ms Cunningham refused to provide a copy of the arbitration ruling; however, The Tribune is in possession of the final document set down on August 3 and amended on August 23.

HIBI and the Bahamas Mortgage Corporation (BMC) began arbitration in October 2011.

Yesterday in response to questions from The Tribune, National Insurance Minister Shane Gibson said he would table details concerning the bidding process for the new building when the House resumes on May 7.

He confirmed that the contract was valued at $20 million.

Last night former BMC Chairman Dr Duane Sands called on the government to consider the interests of the Bahamian people, adding that the country could not “digest another construction fiasco”. He called HIBI’s handling of the previous project an “overpriced disaster”.

News of the contract was met with criticism from the Opposition MP for Central Grand Bahama Neko Grant, the former Minister of Works, who branded HIBI as a “non-performing contractor” given challenges during the construction of the building that currently houses the Office of the Attorney General.

The building had been temporarily used by the Ministry of Tourism, but was originally slated for the BMC and the Department of Housing when the first contract for its construction was signed between the BMC and Lloyd Smith of HIBI in 2004.

The BMC terminated its contract with Holiday Industrial in November 2008, after which an independent review of the project by Construction Cost Engineering (CCE) was commissioned by the National Insurance Board (NIB).

According to the CCE report overpayments to Holiday Industrial, exclusive of professional fees, stood at $2.1 million between 2004 and 2007. It stated that overpayments were the result of arithmetical and miscalculation errors in authorised payment requests sent by the contractor; the incorrect application and record-keeping of payment deductions; and the failure to record direct purchases made on behalf of the contractor by the BMC.

Yesterday, Dr Sands, deputy chairman of the FNM, added that the major contributing fact to the project’s scheduling and cost overruns was the addition of an extra floor to accommodate Mr Gibson’s office as Minister responsible for the Corporation at that time.

In an interview with The Tribune, Dr Sands said that the outcome of the arbitration, which concluded under the current PLP administration, was significantly different from the status of discussions held under the former FNM administration.

A report prepared by Ms Cunningham on the arbitration between HIBI and the BMC, dated October 29, 2013, stated that there was no finding of sub-standard work by arbitrators.

The report also added that the building was 85 per cent complete at the time of cancellation – an admission it stated was made by the BMC.

It added: “Ingraham’s cessation of the contract was purely for political expediency”.

Last night Mr Grant said the outcome of the arbitration process did not explain why the building had not been completed after two years of construction. 

Mr Grant also called for Mr Gibson to answer questions put to him in the House of Assembly.

“I’m concerned about the fact that the contract was executed in 2004 and when (FNM) came in two and a half years later, the building was incomplete,” Mr Grant said. “I challenge (Mr Gibson) to answer my questions. What was the scheduled date of completion for that building? I think it’s ridiculous for it to take that long. Look at the (Princess Margaret Hospital) Critical Care Block, which is a mammoth building and that is now finished –  that speaks volumes of (HIBI’s) non-performance.”