The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The Grand Bahama Development Company (DevCO) has accused a concrete manufacturer or “gross contractual underperformance” and asserted that it cannot continue to grant it an aggregate monopoly that excludes local rivals.

Charisse Brown, DevCO’s chief executive and senior legal counsel, in a second statement that is likely to inflame the dispute with Gold Rock Corporation and its owners, the Florida-based Del Zotto family, alleged that the Freeport-based supplier “failed to satisfy the terms” of their recently-expired five-year deal by not meeting the “minimum tonnage requirement” for aggregate taken from the Devonshire subdivision.

In a release that sought to counter Gold Rock’s argument that DevCO was responsible for the closure of its concrete block and ready mix division, and subsequent termination of staff, Ms Brown accused the company’s owners of being “egregiously disingenuous” with their public statement on the matter.

DevCO’s statement also came as Robert Farquharson, the Government’s director of labour, confirmed to Tribune Business that his officials are “presently investigating” the situation at Gold Rock. This newspaper was told that Gold Rock may have terminated as many as 40 employees on Friday past, but Mr Farquharson branded this “incorrect”.

However, in the same breath, he added: “My team is presently investigating. Once I obtain a report on the situation I will revert to you.” Mr Farquharson declined to comment further, but his comments indicate that the Department of Labour is investigating whether any terminations have taken place and, if so, the amount, having likely received similar reports to this newspaper.

Jamaal Gomez, Gold Rock Corporation’s general manager, did not return this newspaper’s calls and message seeking comment. However, the Employment Act reforms passed in 2017 require companies to give the minister of labour two weeks’ notice if they intend to terminate more than 20 persons, including the reason for the dismissals, the categories to be affected and the period of time over which dismissals are to be carried out.

Gold Rock last week blamed the decision to close its concrete block and ready mix concrete operations on the Grand Bahama Port Authority (GBPA) and DevCO refusing to renew the now-expiring five-year contract that saw the latter supply it with the aggregate for its products.

However, in her latest riposte, Ms Brown said DevCO, for which Hutchison Whampoa has Board and management control, “takes seriously the fact that innocent people are purposefully being misinformed and that DevCO is being falsely accused of acting as a catalyst for something that has cost jobs and impacted livelihoods.

“It is acutely disappointing that Gold Rock has chosen to use negotiating tactics that are intentionally misleading the public in an effort to preserve a contractual relationship that they were not able to fulfill. Further, we find the cited reason for the downsizing deceptive since DevCO is not, and never has been, the sole available source of aggregate for Gold Rock’s operations,” Ms Brown added.

That echoes several Bahamian contractors, who last week said it was “bizarre” that Gold Rock could not find or secure another source of aggregate/fill with which to mix its concrete products even though multiple exist. Several contacts subsequently suggested there was something else happening at Gold Rock behind the row with DevCO, although this could not be verified yesterday.

“No doubt Gold Rock will tip the bucket over some more,” one source said of its likely response to DevCO’s latest statement. Tribune Business was also told that DevCO is negotiating with other trucking and heavy equipment suppliers interested in purchasing the aggregate from its Devonshire subdivision, as Ms Brown’s statement alludes to without going into details.

“DevCO wishes to make emphatically clear that Gold Rock failed to satisfy the terms of the original 2017 five-year contract and never met the minimum tonnage requirement from the contract’s inception,” Ms Brown said. “This underperformance existed prior to the impact of Hurricane Dorian and the COVID-19 pandemic. There were multiple communications with Gold Rock as it related to DevCO’s concerns about their contractual non-performance.”

The “minimum tonnage” amount was not specified, and exactly what this refers to was not detailed. However, it appears that Gold Rock was required to purchase a minimum amount of aggregate from DevCO. Ms Brown said DevCO had engaged Gold Rock on January 17, 2021, over the contract’s renewal well over a year before its May 2022 expiration.

“Due to Gold Rock’s gross contractual underperformance, DevCO at the time advised that it intended ‘to revise the contract to reallocate/adjust the site size attached to this specific arrangement’,” she added. A meeting between DevCO, the Del Zottos and their attorneys was held on June 14, Ms Brown said, during which the potential terms for the sale of aggregate, site size and quantity of aggregate to be excavated were discussed.

A new aggregate site north of the Sir Jack Hayward Bridge was mentioned as an alternative. Referring to the Del Zottos’ allegation that they had been told to design and construct a marina, Ms Brown said DevCO had informed them it would consider another aggregate site provided that it could ultimately be developed into a marina and passed all environmental checks.

Suggesting that Gold Rock offered to propose such a site, Ms Brown said the concrete maker was advised that the new terms were to be based on its past performance. She added that DevCO proposed reviewing the terms every two years so the company could make the case for expanding the aggregate site.

Hinting that the Del Zottos and Gold Rock simply wanted to maintain a monopoly, and lock all rivals out, Ms Brown said: “DevCO could not in good conscience extend what in essence would be single user access to its aggregate source by Gold Rock that could result in the exclusion of local Bahamian businesses and potential international investors from the market.

“DevCO’s position remains unchanged in that we must act in the best interests of all involved parties. We maintain that the proposed new contract terms do not unduly disadvantage Gold Rock but are reflective of their actual historical performance. 

“DevCO remains open to finding a pragmatic resolution to the current state of play, but it must be a resolution that provides opportunities for local Bahamian businesses as well as international investors to participate in this market. DevCO is of the view that this will allow for the creation of new jobs and much-needed economic growth for our island.”