|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 –
- 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?
- 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.
- 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 email@example.com.
|How Design and Build works for clients
This procurement method can produce benefits for clients if
the following process is adopted –
- 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.
- Tendering – Tenders are invited and these are checked
for compliance with the Project Brief and cost estimates.
- 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.