In his final Report, which was submitted to President George Maxwell Richards last week and published exclusively on Easter Sunday by the Sunday Newsday, Uff notes that even without consideration of the emergence of family links between former Udecott executive chairman Calder Hart and Sunway, the board’s approval of the award of the contract was unacceptable. In relation to Udecott’s decision to award the contract to CH Development/Sunway, which was said to be a subsidiary of the Malaysian firm Sunway Construction Bhd (SunCon), Uff concludes that no satisfactory answers have been given as to why:
...a letter of award dated April 28, 2005, had been sent to both parent company SunCon and CH Development when it was only CH Development that had tendered;
...the Udecott board failed to demand a parent company guarantee from CH Development after it changed its name to Sunway Construction (Caribbean) Limited, in the face of its own resolution of November 8, 2004 that care must be taken to obtain parent company guarantees;
...the Udecott board ignored its own tender rules to award the contract to CH Development, when such rules would have disqualified the company because the company had no track record and did not have VAT, NIB and PAYE certificates;
“It remains inexplicable that the Udecott board should have so neglected their own resolution on November 2004 and overlooked the clear and obvious requirement for an enforceable parent company guarantee,” Uff notes. “In this regard, the explanations offered by Mr Calder Hart were nothing to the point. Neither he nor the board could have seriously thought that they were...dealing with the Sunway parent company.”
“The inescapable conclusion is that the Udecott board knowingly exposed the public purse to grave risk of non-performance by the Sunway subsidiary with no available recourse,” Uff finds. “The fact that Sunway Construction (Caribbean) Limited ultimately performed in relation to the Government Campus Plaza in a manner comparable to the other principal contractors engaged there goes no way to mitigate the seriousness of the unexplained dereliction of duty.”
“Udecott thus seriously and knowingly breached its own board resolution,” Uff continued. Alluding to the board’s defence that it had made a commercial decision and had taken reasonable steps to get a guarantee (which he deemed inadequate) Uff notes, “Commercial obligations are not satisfied by taking ‘all reasonable steps’ but by being performed. By continuing to contest the incontestable, Udecott does itself no service.”
But further, in focussing his attention on the Sunway contract, Uff notes that Hart, who at the time of the award of contract was Udecott chairman and not executive chairman, appeared to overreach his powers in order to facilitate a bid by CH Development.
Uff notes that CH Development was incorporated in Trinidad and Tobago on October 19, 2004, as a wholly-owned subsidiary of the Malaysian parent company Sunway Construction Bhd (SunCon). Yet, a mere six days later, the company wrote to Udecott, seeking to be pre-qualified to bid on the Ministry of Legal Affairs Tower project in downtown Port-of-Spain.
The project manager, Turner Construction International LLC did not recommend that CH Development be pre-qualified. It recommended that the Mayalsian parent company, a separate legal entity, be pre-qualified on the basis of its reported track record.
On November 8, 2004, the Udecott board pre-qualified the Malaysian parent company Suncon and issued a special directive that where foreign firms incorporate subsidiary companies within Trinidad and Tobago, “care must be taken to ensure that the parent company is contractually responsible for the performance of all duties...of the subsidiary company.”
On January 31, 2005, CH Development, and not the parent company that had been pre-qualified, submitted a tender to Udecott. A tender evaluation report prepared by Derek Outridge of QES and Associates Limited found that all tenderers had “complied substantially with the requirements of the tender instructions” even as three firms, including CH Development, did not have NIS, BIR and VAT certificates.
The two lowest bidders for the project, Hafeez Karamath Limited ($301 million) and Johnston International Limited ($346 million) were ruled out by Outridge. He argued that Karamath’s workload was heavy and that JIL’s workload would be heavy if the firm was to receive the contract for another Udecott project, the Chancery Lane project in San Fernando.
On April 5, 2005, the Udecott board “agreed with the recommendation of the tender evaluation committee that a contract be awarded to CH Development and Construction Ltd (Sunway)” and the next day sought approval for the award from the Permanent Secretary, Ministry of Finance.
“This designation of the company was potentially misleading as the board of Udecott had earlier been quite clear about the distinction between a foreign parent and a local subsidiary company,” Uff observes.
On April 28, 2005, a letter was sent by Udecott, addressed to both Sunway Construction Bhd (the Malaysian parent company) and CH Development, stating that, “your tender dated January 31, 2005, has been accepted.” Copies of the letter bore Hart’s personal fax number and his name.
An analysis of a fax trail on the letter showed that it was sent by Udecott to Hart’s personal fax machine at his then residence at 6 De Lima Road Cascade, then sent from Hart’s fax machine to Sunway and then from Sunway back to Udecott. Additionally, correspondence throughout the pre-qualification and tendering process had been directed to Hart, then non-executive chairman. Uff also found that the appearance of Hart’s fax number on CH Development correspondence remains unexplained.
“Mr Calder Hart’s direct involvement with tenderers, in his capacity as chairman, is unusual to say the least,” Uff finds. He notes that Winston Agard, the CEO, deposed that he was unaware of CH Development’s application for pre- qualification.
“The Commissioners consider that the decision to award the contract to CH Development was questionable; but the decision is also to be seen as one of a number of separate events indicative of a determination on the part of the chairman, Mr Calder Hart, that the contract was to be awarded to CH Development,” Uff finds. “That intention must have become apparent to others within Udecott by April 2005, if not much earlier. We have observed elsewhere that Mr Calder Hart exercised a degree of influence over the staff of Udecott beyond what could be regarded as normal.”
Uff further notes that the desire to have the contract go to CH Development could not be justified.
“The tender of CH Development was some $67 million higher than the lowest tender, from HKL, and $22 million higher than that of Johnston International Ltd. These factors, combined with evidence of links between Hart and Sunway which later emerged, led Uff to recommend a police probe of his report.