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Testing UDeCOTT’s claims

Published Thursday 1st February 2009

The revelations and events at the Uff Commission in the last week, stunned even the most cynical onlooker, as shown by the public reaction. Just to show a few of these –

  • Does UDeCOTT take instructions from the government? – On this elementary point there were striking differences between UDeCOTT’s Chief Operating Officer and the Executive Chairman, Calder Hart. Hart’s written statement was at odds with his oral evidence on this key point.
     
  • Does UDeCOTT adhere to its tender policy? – After expert cross-examination and even with the benefit of assistance from its own team of expert attorneys, it would seem that UDeCOTT’s answer is – ‘…It’s according..’.
     
  • Does UDeCOTT carry out feasibility studies of its commercial projects? – In relation to the numerous office projects in the capital, we were told by Hart that this had been done in only one case. That was the POS Waterfront project, to which we will return in this column.
     
  • The HDC’s Cleaver Heights project – Last week we reported to readers that the HDC’s written evidence to the Commission stated that the alleged $10M discrepancy on this project arose from an error. The Minister of Planning, Housing and the Environment on Tuesday afternoon submitted a 19-page statement which flatly contradicts the HDC account of events. We also know that, despite the earlier refusal of the PM to commit a forensic accountant to the Uff Enquiry, the Minister announced that Bob Lindquist was to be appointed to investigate this project. These are uncharted waters, in that we have the spectacle of a Cabinet Minister issuing a signed statement to the Commission, which contradicts that of one of her own principal State Agencies. Setting aside the obvious political maneuvers, there are serious queries for the HDC to answer, as outlined in last week’s column. Both these statements are sure to be tested by cross-examination, it would be interesting to see how they survive the test. Those tests could only take place if the Commission continues its work and that is now at stake, as we outline next
     
  • The Israel Khan episode – On Wednesday afternoon, I saw for myself one of the Commissioners, Israel Khan, carry out a testing cross-examination of Calder Hart. The next morning the attorneys for UDeCOTT and Hart both tried to have Khan removed as a Commissioner, on the grounds that his conduct would have led members of the public to suspect him of bias against Hart. Khan has refused to recuse himself and those claims have now been referred to the President for a decision and a Judicial Review would probably follow if the aggrieved parties do not get the desired result. My own view is that public sentiment on this matter needs to be carefully weighed – there is widespread and growing disquiet over the UDeCOTT situation and the public therefore expects that those people it is paying to Enquire, do so. Given the emerging pattern of UDeCOTT evasion and just plain ole confusion, as outlined above, those enquiries would have to be vigorous to be effective. I myself had some problems accepting Khan’s appointment as a Commissioner, not for the widely-held political reasons, but simply because he did not seem to me to have practiced in the relevant areas of law. My concern that his experience was almost entirely in criminal law appears to have been misplaced.

There were many other stunning facts, but, as we have stated before, those concerns are actually secondary to this critical story. Impossible as it seems, later events were to eclipse the work of the Uff Commission. Of course, I am speaking about the CL Financial insolvency and the State bailout. Tempting as it is, I am going to ignore that CLICO situation and continue to explain the UDeCOTT story to readers.

Last week’s witnesses were Neelanda Rampaul, Calder Hart and Colm Imbert, Minister of Works and Transport. Imbert was there on Thursday and Friday with an agenda of explaining why the Design and Build procurement method was better for the country. His claim that the State got the projects it wanted - on-time and within budget - was based on three examples. We will set out our own analysis of those examples for readers to decide how sound those claims are –

  1. The Prime Minister’s Residence and Diplomatic Centre – We were told that this building was completed, on-time and within budget, on terms which conventional methods and local contractors would have been unable to match. Short months after it was opened, we were told that another twenty-something million dollars had to be spent to add on facilities, said to be for security, vehicles and so on. Question being – Why was it necessary to make these significant changes to an approved design mere months after completion of the project? Who was responsible for developing the Project Brief on this iconic building and who approved the design? The reported final cost of this project, after the additional works, was reportedly of the order of $175M. If we cannot get a medium-scale project like this right, what is happening on the colossal ones now taking place?
     
  2. The Academy for the Performing Arts, POS – We stated our concerns on this iconic project in ‘Property Matters’ of 22nd January. It is unsuited, as designed, for theatre, dance or music. The official silence has been eloquent and Imbert was unable, or unwilling, to answer the second query of the Artists’ Coalition of Trinidad & Tobago – “What is the function of the project?” Imagine that.
     
  3. The POS International Waterfront Centre – This is UDeCOTT’s flagship project and we are told that it was finished on-time and within budget. The recent bankruptcy of the 2 intended tenants (Merrill Lynch and Lehman Brothers) was beyond local control and does not form part of this critique. Calder Hart told the enquiry last Wednesday that this was the only commercial project on which UDeCOTT had carried out a feasibility test. He also said that the feasibility test showed a positive rate of return of about 8%, but it omitted the value of land. UDeCOTT’s 2005 Annual Report discloses, at Note 12 on page 26, that a value of $180M was the estimated ‘fair value’ of the land for the Waterfront project as at 31st December 2005. We have no reason to doubt the accuracy of that figure. Some food for thought here – UDeCOTT is said to be operating along commercial principles and lists among its Corporate Values - Value for Money and Professionalism. Only a single project was tested for feasibility. It is impossible to test the feasibility of a project if one omits one of the main costs. Impossible and unprofessional. Bogus. Please note that if the land element were included in the feasibility analysis, the project would not have a positive rate of return. Remember that this is the flagship project. The terms of reference of the Uff Commission include – “…the procurement practices and methods of operation of Udecott…”. This is the primary question going to the very core of UDeCOTT’s procurement practices and operations. Procurement of this kind is an investment decision. Investment decisions need to be carefully studied and weighed up, particularly those which are large-scale and fundamentally long-term in nature. If the best-performing projects are not financially sound, how can we speak of Value for Money with a straight face?

 

Afra Raymond is a chartered surveyor and a director of Raymond & Pierre Ltd. Feedback can be sent to afra@raymondandpierre.com.

Afra Raymond - Property Matters

How Design and Build works for clients

This procurement method can produce benefits for clients if the following process is adopted –

  1. Project Brief – This document is developed to properly describe the project for the guidance of tenderers. If the project brief is overly detailed the D&B contractors will lack the latitude to come up with designs which best serve the client’s objectives.
  2. Tendering – Tenders are invited and these are checked for compliance with the Project Brief and cost estimates.
  3. Issuing the Contract – This is the stage at which a tenderer is selected and the contract awarded. The award of a contract is tantamount to accepting the submitted design.

Please note that this is an outline which is focused on the decisive issues insofar as UDeCOTT is concerned.