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<TABLE cellSpacing=0 cellPadding=1 width="100%" border=0><TBODY><TR><TD><SPAN class=TopStory>Recklessness at Whitehouse</SPAN>
<SPAN class=Subheadline>PAC hears how UDC lost control of cost overruns</SPAN></TD></TR><TR><TD>Alicia Dunkley, Observer staff reporter
Wednesday, October 25, 2006
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</TD></TR><TR><TD><SPAN class=Description>CAMPBELL. facing the heat as PAC probes Whitehouse cost overrun</SPAN></TD></TR></TBODY></TABLE><P class=StoryText align=justify>THE Public Accounts Committee (PAC) of Parliament yesterday inched closer to understanding how the controversial Sandals Whitehouse Hotel project incurred a massive US$43 million in cost overruns.<P class=StoryText align=justify>In its most telling session since it began its probe of the issue almost six weeks ago, the PAC heard that the state-run Urban Development Corporation (UDC), the project manager and one-third partner, lost control over the expenditure, as the hotel project haemorrhaged.<P class=StoryText align=justify>Soaking up much of the pressure, UDC president and chief executive officer, Marjorie Campbell admitted that things had gone awry and that the safety latch on cost overruns was not utilised by Nevalco, the UDC's site manager on the ground.
"Did the people on the ground who are committing to the expenditure receive your prior approval for increased expenditure?" PAC Chairman Audley Shaw pressed Campbell.<P class=StoryText align=justify>"No, Mr Chairman," responded Campbell, who is facing the heat as current head of the UDC, from which former chairman Dr Vin Lawrence resigned earlier this year.
Lawrence threw in the towel after the UDC was accused by Contractor-General Greg Christie of deliberately withholding key information he needed to determine how the cost overruns came to be.
Pressed further as to the reasons for "the breakdown in the approvals process", Campbell suggested it could have been caused by the fast-tracking of the project and the way in which it was implemented.<TABLE cellSpacing=0 cellPadding=5 width=156 align=left border=0><TBODY><TR><TD>
</TD></TR><TR><TD><SPAN class=Description>SHAW. the controls were limited (or) non-existent and that is the crux of the problem</SPAN></TD></TR></TBODY></TABLE><P class=StoryText align=justify>"If you are constructing the hotel using a fast-track methodology, where you are building as you design, it would be difficult to await the approval of the board for each claim," Campbell argued.<P class=StoryText align=justify>Shaw rejected the explanation, insisting that "even if the UDC was only a one-third partner and the private owners were a two-third partner, there would still be an obligation to follow the procurement guidelines because whenever there is the commission and expenditure of government funds the government procurement guidelines must be followed".<P class=StoryText align=justify>The Sandals Whitehouse project is owned one-third by the UDC, one-third by the state-run National Investment Bank of Jamaica (NIBJ) and one-third by Gorstew, Gordon 'Butch' Stewart's holding company, through a joint venture called Ackendown Newtown Development Company (ANDCO). Nevalco represented UDC on the ground and Sandals is manager of the hotel.<P class=StoryText align=justify>It was originally Butch Stewart's dream of a development that would bring prosperity to Jamaica's lush and rustic south coast, by opening up the area to investment and job creation.<P class=StoryText align=justify>But the dream turned sour when the project began to bleed red ink and Sandals complained about costly delays and inferior finishin
<SPAN class=Subheadline>PAC hears how UDC lost control of cost overruns</SPAN></TD></TR><TR><TD>Alicia Dunkley, Observer staff reporter
Wednesday, October 25, 2006
</TD></TR></TBODY></TABLE>
<TABLE cellSpacing=0 cellPadding=5 width=350 align=center border=0><TBODY><TR><TD>
</TD></TR><TR><TD><SPAN class=Description>CAMPBELL. facing the heat as PAC probes Whitehouse cost overrun</SPAN></TD></TR></TBODY></TABLE><P class=StoryText align=justify>THE Public Accounts Committee (PAC) of Parliament yesterday inched closer to understanding how the controversial Sandals Whitehouse Hotel project incurred a massive US$43 million in cost overruns.<P class=StoryText align=justify>In its most telling session since it began its probe of the issue almost six weeks ago, the PAC heard that the state-run Urban Development Corporation (UDC), the project manager and one-third partner, lost control over the expenditure, as the hotel project haemorrhaged.<P class=StoryText align=justify>Soaking up much of the pressure, UDC president and chief executive officer, Marjorie Campbell admitted that things had gone awry and that the safety latch on cost overruns was not utilised by Nevalco, the UDC's site manager on the ground."Did the people on the ground who are committing to the expenditure receive your prior approval for increased expenditure?" PAC Chairman Audley Shaw pressed Campbell.<P class=StoryText align=justify>"No, Mr Chairman," responded Campbell, who is facing the heat as current head of the UDC, from which former chairman Dr Vin Lawrence resigned earlier this year.
Lawrence threw in the towel after the UDC was accused by Contractor-General Greg Christie of deliberately withholding key information he needed to determine how the cost overruns came to be.
Pressed further as to the reasons for "the breakdown in the approvals process", Campbell suggested it could have been caused by the fast-tracking of the project and the way in which it was implemented.<TABLE cellSpacing=0 cellPadding=5 width=156 align=left border=0><TBODY><TR><TD>
</TD></TR><TR><TD><SPAN class=Description>SHAW. the controls were limited (or) non-existent and that is the crux of the problem</SPAN></TD></TR></TBODY></TABLE><P class=StoryText align=justify>"If you are constructing the hotel using a fast-track methodology, where you are building as you design, it would be difficult to await the approval of the board for each claim," Campbell argued.<P class=StoryText align=justify>Shaw rejected the explanation, insisting that "even if the UDC was only a one-third partner and the private owners were a two-third partner, there would still be an obligation to follow the procurement guidelines because whenever there is the commission and expenditure of government funds the government procurement guidelines must be followed".<P class=StoryText align=justify>The Sandals Whitehouse project is owned one-third by the UDC, one-third by the state-run National Investment Bank of Jamaica (NIBJ) and one-third by Gorstew, Gordon 'Butch' Stewart's holding company, through a joint venture called Ackendown Newtown Development Company (ANDCO). Nevalco represented UDC on the ground and Sandals is manager of the hotel.<P class=StoryText align=justify>It was originally Butch Stewart's dream of a development that would bring prosperity to Jamaica's lush and rustic south coast, by opening up the area to investment and job creation.<P class=StoryText align=justify>But the dream turned sour when the project began to bleed red ink and Sandals complained about costly delays and inferior finishin