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Sandals Whitehouse drama goes to court
BY BALFORD HENRY Observer writer balfordh@jamaicaobserver.com
Wednesday, October 31, 2007
NEVALCO Consultants Limited, the Alston Stewart-owned company contracted as project manager for the controversy-hit Sandals Whitehouse Hotel in Westmoreland, is to face the court for breach of contract.
GOLDING. the new board of Ackendown will be directed to take appropriate legal action
Prime Minister Bruce Golding told the House of Representatives yesterday that his administration would be instructing the new board of Ackendown Newtown Development Company Limited, which undertook the development of the hotel, to take legal action against Nevalco for breach of contract on the project.
"The new board of Ackendown will, therefore, be directed to take appropriate legal action against Nevalco, and any other entity whose unauthorised actions contributed to the significant cost overruns which the Jamaican taxpayers will now have to service and will, most likely, be called upon to write off," Golding told the House.
Golding said that while the relief Gorstew Limited is seeking through the courts, in respect of cost overruns, is essentially declaratory and should be borne by the UDC and the National Investment Bank of Jamaica (NIBJ), other claims are directed at Ackendown which could have material effect on its precarious financial position.
The prime minister said that in its defence, Ackendown has applied to the court for the issue of responsibility for cost overruns to be determined in accordance with the procedure for adjudication stipulated in the heads of agreement.
He noted that both the contractor-general's and the forensic reports on the project found that inefficient project management was a contributing factor to the overruns. The report of the quantity surveyor identified US$5 million worth of cost overruns to be borne by Gorstew and the balance by Ackendown.
The UDC had agreed to indemnify Ackendown from and against any cost overruns on the project, where those overruns were attributed to inefficient implementation by the project manager.
But, under a separate agreement signed between the UDC and Nevalco for the management and co-ordination of the project, Nevalco agreed to indemnify the UDC against the consequences of any breach of its obligations under that agreement.
Golding said that there was no evidence of approval given by the UDC for several variation orders and instruction issued by Nevalco which contributed significantly to the cost overruns.
The hotel was completed more than a year behind schedule and well over the US$70-million budget. The contractor-general, in his report, put the final cost at nearer to US$110 million.
The then Opposition Jamaica Labour Party, led by Golding, claimed mismanagement and cronyism during the hotel's construction. The project, overseen by the UDC and Nevalco, had cost overruns of US$43 million, according to the forensic audit ordered by former prime minister, P J Patterson.
BY BALFORD HENRY Observer writer balfordh@jamaicaobserver.com
Wednesday, October 31, 2007
NEVALCO Consultants Limited, the Alston Stewart-owned company contracted as project manager for the controversy-hit Sandals Whitehouse Hotel in Westmoreland, is to face the court for breach of contract.
GOLDING. the new board of Ackendown will be directed to take appropriate legal action Prime Minister Bruce Golding told the House of Representatives yesterday that his administration would be instructing the new board of Ackendown Newtown Development Company Limited, which undertook the development of the hotel, to take legal action against Nevalco for breach of contract on the project.
"The new board of Ackendown will, therefore, be directed to take appropriate legal action against Nevalco, and any other entity whose unauthorised actions contributed to the significant cost overruns which the Jamaican taxpayers will now have to service and will, most likely, be called upon to write off," Golding told the House.
Golding said that while the relief Gorstew Limited is seeking through the courts, in respect of cost overruns, is essentially declaratory and should be borne by the UDC and the National Investment Bank of Jamaica (NIBJ), other claims are directed at Ackendown which could have material effect on its precarious financial position.
The prime minister said that in its defence, Ackendown has applied to the court for the issue of responsibility for cost overruns to be determined in accordance with the procedure for adjudication stipulated in the heads of agreement.
He noted that both the contractor-general's and the forensic reports on the project found that inefficient project management was a contributing factor to the overruns. The report of the quantity surveyor identified US$5 million worth of cost overruns to be borne by Gorstew and the balance by Ackendown.
The UDC had agreed to indemnify Ackendown from and against any cost overruns on the project, where those overruns were attributed to inefficient implementation by the project manager.
But, under a separate agreement signed between the UDC and Nevalco for the management and co-ordination of the project, Nevalco agreed to indemnify the UDC against the consequences of any breach of its obligations under that agreement.
Golding said that there was no evidence of approval given by the UDC for several variation orders and instruction issued by Nevalco which contributed significantly to the cost overruns.
The hotel was completed more than a year behind schedule and well over the US$70-million budget. The contractor-general, in his report, put the final cost at nearer to US$110 million.
The then Opposition Jamaica Labour Party, led by Golding, claimed mismanagement and cronyism during the hotel's construction. The project, overseen by the UDC and Nevalco, had cost overruns of US$43 million, according to the forensic audit ordered by former prime minister, P J Patterson.