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<TABLE cellSpacing=0 cellPadding=1 width="100%" border=0><TBODY><TR><TD><SPAN class=TopStory>UDC is to blame, says Gorstew</SPAN>
<SPAN class=Subheadline></SPAN></TD></TR><TR><TD>Alicia Dunkley, Observer staff reporter
Wednesday, December 13, 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>Chairman of the Sandals Hotel Chain Gordon 'Butch' Stewart (right) confers with director of Gorstew Patrick Lynch during yesterday's sitting of the Public Accounts Committee of Parliament. (Photo: Michael Gordon)</SPAN></TD></TR></TBODY></TABLE><P class=StoryText align=justify>Gorstew Limited, Gordon 'Butch' Stewart's holding company, yesterday presented extensive documentation to back its contention that the Urban Development Corporation (UDC) is to blame for the US$43-million cost overrun on the Sandals Whitehouse Hotel.<P class=StoryText align=justify>Headed by Stewart himself, Gorstew took a high-powered team to appear before Parliament's Public Accounts Committee (PAC), which continued its probe into how the Westmoreland-based project overshot its US$70-million budget in such a dramatic fashion.<P class=StoryText align=justify>Gorstew and two state-run entities - the UDC and the National Investment Bank of Jamaica (NIBJ) - jointly formed a company called Ackendown Newtown Development Company (ANDCO) to build and run the Sandals Whitehouse hotel, Stewart's dream of a project that would usher in a new era of development for the island's rustic and lush south coast. UDC hired Nevalco Consultants as the site manager.<P class=StoryText align=justify>But Sandals, manager of the hotel, took the UDC, the project manager, to court, complaining that it had cost the hotel chain huge sums of money because of delays in completing the hotel and substandard features that forced it to refund the early guests and hurt its vaunted reputation.<P class=StoryText align=justify>"Implementation Limited (Gorstew's representatives) rigorously followed the instructions issued by the UDC and Nevalco...and Nevalco's allegations (that Gorstew had exercised undue influence over the project and contributed to the cost overruns) must be viewed as an attempt to pass the buck of responsibility," Stewart told the PAC.<P class=StoryText align=justify>The hotel mogul said a format designed and submitted by Implementation Limited for a financial reporting system was never used, despite the fact that an agreement was made to do so.<P class=StoryText align=justify>"Had this system been put in place the Board would have been made aware of any cost overruns early enough to take corrective action; instead, they had to wait until one month before the scheduled opening of the hotel to learn of an overrun...," Stewart added.<P class=StoryText align=justify>He further dismissed what he said were 'unfounded assertions' by some officials, even at the highest level, that the change of name from Beaches to Sandals contributed to the cost overruns.<P class=StoryText align=justify>"Nothing could be further from the truth, no changes were made to the specifications for finishes which were agreed and signed off on," the PAC was told.<P class=StoryText align=justify>Gorstew directors Pat Lynch and Chris Zacca, along with Implementation's Jeremy Brown supported Stewart in punching holes into the reports of the Forensic Audit Team, the UDC's president and chief executive officer, Marjorie Campbell, former UDC head Dr Vincent Lawrence, Nevalco Consultants' Alston Stewart (no relation), and Contractor-General Greg Christie, citing documentary proof.<P class=StoryText align=justify>Lynch relied on the Heads of Agreement signed by the partners agreeing that Gorstew would be responsible for any overruns it caused while the UDC would "bear the costs of overruns which
<SPAN class=Subheadline></SPAN></TD></TR><TR><TD>Alicia Dunkley, Observer staff reporter
Wednesday, December 13, 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>Chairman of the Sandals Hotel Chain Gordon 'Butch' Stewart (right) confers with director of Gorstew Patrick Lynch during yesterday's sitting of the Public Accounts Committee of Parliament. (Photo: Michael Gordon)</SPAN></TD></TR></TBODY></TABLE><P class=StoryText align=justify>Gorstew Limited, Gordon 'Butch' Stewart's holding company, yesterday presented extensive documentation to back its contention that the Urban Development Corporation (UDC) is to blame for the US$43-million cost overrun on the Sandals Whitehouse Hotel.<P class=StoryText align=justify>Headed by Stewart himself, Gorstew took a high-powered team to appear before Parliament's Public Accounts Committee (PAC), which continued its probe into how the Westmoreland-based project overshot its US$70-million budget in such a dramatic fashion.<P class=StoryText align=justify>Gorstew and two state-run entities - the UDC and the National Investment Bank of Jamaica (NIBJ) - jointly formed a company called Ackendown Newtown Development Company (ANDCO) to build and run the Sandals Whitehouse hotel, Stewart's dream of a project that would usher in a new era of development for the island's rustic and lush south coast. UDC hired Nevalco Consultants as the site manager.<P class=StoryText align=justify>But Sandals, manager of the hotel, took the UDC, the project manager, to court, complaining that it had cost the hotel chain huge sums of money because of delays in completing the hotel and substandard features that forced it to refund the early guests and hurt its vaunted reputation.<P class=StoryText align=justify>"Implementation Limited (Gorstew's representatives) rigorously followed the instructions issued by the UDC and Nevalco...and Nevalco's allegations (that Gorstew had exercised undue influence over the project and contributed to the cost overruns) must be viewed as an attempt to pass the buck of responsibility," Stewart told the PAC.<P class=StoryText align=justify>The hotel mogul said a format designed and submitted by Implementation Limited for a financial reporting system was never used, despite the fact that an agreement was made to do so.<P class=StoryText align=justify>"Had this system been put in place the Board would have been made aware of any cost overruns early enough to take corrective action; instead, they had to wait until one month before the scheduled opening of the hotel to learn of an overrun...," Stewart added.<P class=StoryText align=justify>He further dismissed what he said were 'unfounded assertions' by some officials, even at the highest level, that the change of name from Beaches to Sandals contributed to the cost overruns.<P class=StoryText align=justify>"Nothing could be further from the truth, no changes were made to the specifications for finishes which were agreed and signed off on," the PAC was told.<P class=StoryText align=justify>Gorstew directors Pat Lynch and Chris Zacca, along with Implementation's Jeremy Brown supported Stewart in punching holes into the reports of the Forensic Audit Team, the UDC's president and chief executive officer, Marjorie Campbell, former UDC head Dr Vincent Lawrence, Nevalco Consultants' Alston Stewart (no relation), and Contractor-General Greg Christie, citing documentary proof.<P class=StoryText align=justify>Lynch relied on the Heads of Agreement signed by the partners agreeing that Gorstew would be responsible for any overruns it caused while the UDC would "bear the costs of overruns which