Sunday, February 18, 2018

$40m white elephant


UNOCCUPIED: The new Chaguanas Borough Corporation building located at the corner of Taitt and Cumberbatch streets, Chaguanas. —Photo: DAVE PERSAD

Mark Fraser

The Ministry of Local Government has ordered an investigation into how the estimated outfitting contract sum for the new $40 million Chaguanas Borough Corporation building was increased from $5 million to $23 million. 

The matter, the Sunday Express learned, was brought to the attention of Local Government Minister Marlene Coudray two Tuesdays ago which led to her ordering an immediate investigation into the circumstances under which the building remains unoccupied some six months after it was declared opened by Minister of Works and Infrastructure Surujrattan Rambachan on October 16, 2013. 

The building is situated at the corner of Taitt and Cumberbatch streets, Chaguanas. 

However, the Sunday Express learned that in spite of the media publicity and fanfare at the opening ceremony, CMR Company Ltd co-owner Marvin Ramnarine has refused to hand over the keys to the building until the ministry agrees to settle the outstanding balance of $9.2 million. 

When the Sunday Express contacted Coudray two Fridays ago seeking comment on the ongoing matter, she said: “The matter is being investigated.”

Permanent secretary Eric James, the Sunday Express learned, has also been ordered to submit a detailed report into the award of the $19.8 million (VAT exclusive) outfitting contract to CMR Company Ltd. 

This, after a draft note for Cabinet consideration dated September 22, 2009, showed that the ministry originally estimated the cost of the outfitting job at $5 million which included fixtures, furnishings and furniture. 

The note read: “Whereas, a contract was awarded for the construction of the new Chaguanas Town Hall which is near completion, no provisions were made for fixtures, furnishings and furniture. The Chaguanas Borough Corporation in its Draft Estimates Development Programme 2009/2010 has included the sum of $5 million towards this endeavour.”

In addition, the Seventh Report of the Joint Select Committee listed that provision was made in the Estimates Development Programme 2012 for the customisation and outfitting of the Chaguanas Borough Corporation in the sum of $1 million. 

Palo Seco Agricultural Enterprises Ltd (PSAEL) is the project manger for the job. 

The Sunday Express learned that payments totalling $15 million (VAT inclusive) in mobilisation and contingency fees have been paid to CMR Company Ltd to date. 

The outfitting contract was awarded to CMR Company Ltd in December 2011 with a completion date of six months, however, the job was completed in October 2013. 

Construction of the new Chaguanas Borough Corporation building commenced under the People’s National Movement (PNM) in 2008 at an estimated cost of $40 million, while the outfitting contract was awarded under the People’s Partnership administration. 

Former tourism minister Chandresh Sharma and Rambachan both held the ministry portfolio before being realigned in a Cabinet reshuffle. 

Sources told Sunday Express that Coudray was unaware that staff had not been relocated to the new building following the opening ceremony. 

Coudray, who was appointed Local Government Minister on September 6, 2013, did not attend the opening function. 

Coudray, sources told the Sunday Express, did not attend the function even though the Chaguanas Borough Corporation falls under the remit of her ministerial portfolio. The opening ceremony was not planned by the Local Government Ministry and instead, she received an invitation to attend the opening.

Since that ceremony the building has remained locked. 

In spite of the building being completed staff members remain at the old  building nearby. 

The Sunday Express learned that ministry officials are expected to visit the building soon in a bid to assess the situation. 

But Ramnarine told the Sunday Express on Friday that he does not intend to “budge” until an agreement is reached to settle the outstanding payments. 

He said: “I am in my right; I spoke to my attorney. I am not handing over the keys until ministry officials sit with me and I receive something in writing showing that they intend to honour the outstanding payments. 

“Before local government elections were held last year an inauguration ceremony was held at the new building. I was promised payment so that is how the ceremony was held at the building. I continue trying to make them look good but I have had it. 

“I have not handed over the building because I have not been receiving payments since 2013. I have a lot of interest charges. Nobody is going to hand over a project and they only received half of the payment. I have allowed use of the auditorium and the chambers but I am not handing over the building before an agreement is reached.”

Ramnarine said the payments made to company thus far represented only 59 per cent of the project. 

“The variations on the building are minuscule. (The ministry) owes a balance. It was supposed to be a six-month project but it could not have been completed within the time frame because we had problems with the building. The building was completed in time for the local government elections.”

Told that the outfitting job was originally estimated to cost $5 million, Ramnarine said: “I installed state-of-the art equipment throughout the building. The most advance security system (Intelligent Security Systems) have been installed. The security system alone costs almost $5 million.”

PSAEL responds:

1) Documents obtained by the Sunday Express show the estimated cost to outfit the new Chaguanas Borough Corporation building was $5 million. A note was taken to Cabinet representing the $5 million sum.

However, a contract in the sum of $19.8 million (VAT exclusive) was awarded to CMR Company Limited for the job. Please explain.

1. PSAEL was notified by MOLG of Cabinet’s approval dated April 05, 2012 for the total sum of $19.15 million (exclusive of contingencies, consultancy fees, management fees and VAT) for the customisation and outfitting of the new administrative complex of the Chaguanas Borough Corporation, utilising a design/build approach. PSAEL after obtaining all requisite approvals, awarded a contract to CMR and Company for $19.15 million (exclusive of contingencies and VAT).

2. (2) Information obtained by the Sunday Express shows the contract for the outfitting of the Chaguanas Borough Corporation building was expected to be completed in 2012. However, ministry officials have confirmed that the building has not been officially handed over to the Ministry of Local Government. Please explain.

1. The project agreement commenced on June 12, 2012. Inherent issues relating to the facility namely electrical, plumbing, waste water and HVAC systems, not included in the project scope, caused delays to the project timeline. Presently, this project is completed as verified by Ministry of Local Government, and stands ready for handover pending payment of funds from the MOLG.

(3) (3) Did PSAEL receive confirmation from the Ministry of a Local Government that the works were verified before payment was issued? If yes, please indicate the date of the correspondence given that a balance of $9.2 million (VAT inclusive) remains outstanding to the contractor.

1. All payments are issued by Ministry of Local Government only upon the ministry’s verification of the works completed. PSAEL is unaware of any correspondence relating to a balance of $9.2 million (VAT Inclusive) outstanding to the contractor.