12.36. These contentions are responded to in the first witness statement of Neelanda Rampaul. In some limited respects the complaint and response disclose a mutual lack of understanding, such that little is to be gained by a detailed recitation of claims and responses.
However, it is to be noted that while complaint (i) is formally denied, it is accepted that the tender rules were provided pursuant to the Freedom of Information request. This gives rise to the question why Udecott’s tender rules should not have been freely available on a website or the like, and why it should ever have been necessary to serve a statutory request for something which should plainly, in the view of the Commissioners, have been in the public domain. With regard to issue (ii), the Commissioners are aware that there is perceived to be a “political” dimension to Udecott’s activities which has given rise to a perception that some members of the government are “for” and others “against” Udecott. In these circumstances the Commissioners prefer to avoid entering into what may be a political matter.
12.37. As regards (iii), Ms Rampaul accepted that many of the contracts awarded to consultants are done on a sole selective basis, which was said to be in accordance with Udecott’s procurement rules, in particular Clause 22.02, examples being the appointment of Turner and HOK for the Brian Lara Stadium. It is also pointed out that Mr Riley’s own company, Planning Associates Limited (“PAL”) was awarded consultancy contracts on a sale selective basis.
Udecott’s procurement rules are considered below. As to (iv), the procurement process for the Prime Minister’s residence is dealt with later in this Report. With regard to (v) and (vi), Udecott has indicated its willingness to consider fluctuation clauses on a case by case basis; and with regard to amendments generally, Udecott has to interact with all players in the construction sector, including Ministries to ensure efficient delivery of projects and value for money.
12.38. No response to (vii) is offered by Ms Rampaul but all the above complaints are dealt with in Udecott’s Final Submission. With regard to (vii) Udecott state that Times Construction Limited was a pre-qualified tenderer and was one of seven contractors invited to tender on August 18, 2005. Following an evaluation process the contract was awarded to Times Construction Limited following a decision of the Board on January 30, 2006.
The JCC allegation is therefore denied. It should be said that none of the foregoing allegations involve serious impropriety. At worst they amount to a heavy handed approach which was, on many occasions, insensitive to reasonable demands from those whose livelihood depended on decisions made by Udecott.
With regard to the “massive changes to standard clauses” Udecott points out in its Final Submission that the amendments were “entirely mundane”, which appears to be the case, at least from the examples quoted by Udecott.
Nevertheless any amendment to Conditions of Contract may carry important consequences and the Commissioners will recommend the production of an agreed standard form for Trinidad and Tobago, to which all relevant parties need to contribute.
12.39. As noted, Udecott was critical of the performance of Mr Riley’s firm, PAL, and commissioned a report by CH2M HILL Lockwood Greene, of Dallas, Texas (Lockwood Greene), dated May 2006 which was exhibited to the statement of Ms Rampaul. The investigation commenced in April 2005 and reported on six housing projects in which PAL had been appointed engineer (Green Street, Eldorado, Champs Fleurs, Lady Young, Canaan Road and “A River Runs Through It”). The projects, for which work had commenced in 2004 or 2005, were each investigated through documentary search, interviews and inspection.
The Report records serious criticism of PAL on numerous grounds including: late certification and obtaining of statutory approvals; geo-technical and site issues; deficient bills of quantities; unapproved cost variances; delay in design documents and in responding to contractor’s questions; and delay in resolving issues and other matters which had led to “a performance history that is distressing”. Mr Riley took serious issue with the report, which had been referred to in Parliament, and filed a response which was sent to the Speaker.
These matters were not pursued further in the Inquiry, but we noted that the matters of criticism were not untypical of issues observed in housing and other projects which have been examined in the course of the Inquiry.
12.40. The report identified some common features of the six projects examined as follows:
(i) Extraordinary statutory approval durations: approvals by the plamring authorities and WASA considerably exceeded those encountered in other jurisdictions thereby increasing costs and creating an unfriendly regulatory environment.
(ii) Change in statutory requirements: WASA changed their requirements as to connection to local area sewer systems, requiring redesign work and reapproval.
(iii) Construction commenced before site issues were resolved: this related to land title, boundaries, access, statutory approvals and utilities, causing considerable delay and increased costs.
(iv) Commodity price increases: although not allowable under the contract, contractors were generally allowed to recover price increases on the ground of delay patially attributed to the employer and the engineer.
(v) Size of projects: all the projects have seen significant cost overruns due to site and utility issues. However, lager projects may suffer lower increases per living unit through the ability to distribute costs over a larger number of units.
(vi) Termination of contracts: three out of the six contracts were terminated by Udecott for lack of performance and termination of a fourth contract was considered. This inevitably led to delays.
(vii) Difficult sites: two at least of the sites had difficulties which were not fully appreciated by designers.
(viii) Safety: two sites require further attention to ensure compliance with safety requirements.
(ix) Schedules: smaller projects had very aggressive schedules which were probably unachievable. No process was in place to review schedules and implement recovery plans.
Again we note that these matters were not untypical of issues observed in housing and other projects examined in the course of the Inquiry.
12.41. Of particular relevance to this section of the Report, however, is the strident criticism contained in the Lockwood Greene Report of Udecott’s own performance. This was significant in being almost the only source of comment on Udecott’s performance dealing with matters of technical proficiency. Lockwood Greene’s criticisms can be summarised as follows:
(i) Fragmented management: it is reported that management groups — finance, legal and engineering — appear to be standalone entities without significant integration and with no glue holding them together in an integrated project management team. There does not appear to be an internal group whose task it is to manage projects in their entirety.
(ii) No centralised filing system: various management groups appear to maintain project files pertaining only to their functions. Udecott is said to be aware of the issue and working to put a better system in place.
(iii) Insufficient project staff: only one field engineer was assigned to four projects, that engineer also having duties on other projects. Further, a single Chief Construction Engineer had responsibility for all Udecott projects.
(iv) Lack of project control tools: there was lack of cost forecast reports, schedule deviation reports and overdue RFI logs, also change order recap reports.
(v) Late payment to contractors: this was the most significant criticism directed towards Udecott. Lack of cashflow resulted in considerable delay to projects. PAL themselves were often late in certifying, but additional delay occurred within Udecott once certificates were issued.
(vi) No full-time Udecott presence on site: while Clerks of Works were Udecott employees, PAL insisted they were supervised by and reported to the PAL project manager leading to unreliable recording of events.
(vii) Lack of follow-up on issues: numerous issues were allowed to languish. The chief engineer initiated action but issues were not resolved.
(viii) Failure to control the engineer: while Udecott expressed dissatisfaction with the performance of PAL, in many cases the contract provisions were not enforced, nor were issues referred to higher management levels.
12.42. The Commissioners followed up some of these issues with witnesses. Mr Calder Hart was asked questions at the end of his evidence when he stated as follows:
(i) Udecott had gone through a challenging period getting itself up to capacity from 2002 onwards.
(ii) Udecott had recruited younger people and its skill set is going up, aided by a graduate trainee programme.
(iii) Udecott brought in a lot of foreign help early on to try and achieve world class standards.
(iv) Udecott is keen to improve both itself and the entire TT construction industry.
(v) There is a turnover of staff but this applies in the industry as a whole. The construction sector has been breaking at its seams over the last five years.
12.43. Additional information concerning Udecott’s internal management was contained in the reports of Mr McCaffrey, who spent several days working with Udecott staff in January 2009 and subsequently exchanged many communications with individual staff members in investigating financial details of the Brian Lara project. Mr McCaffrey noted in his Interim Report that, while Udecott had been provided with a list of materials to be made available some days prior to the meeting, none of the material had been marshalled in advance. While the list of materials requested was comprehensive Mr McCaffrey commented:
“It is apparent to me that Udecott’s filing and document control cannot possibly be described as good.”
In relation to the identification and analysis of delay issues relating to the Brian Lara Stadium, he commented that:
“Neither party, it appears, has developed even a rudimentary delay analysis. The production of an as-built programme is one of the fundamental requirements.
12.44. In relation to payment issues at Brian Lara, Mr McCaffrey expressed the view that:
“The files are so poorly organised that tracking such issues with any confidence could not be carried out ..... The degree of disarray within those files has led to an extensive examination of the content and many questions cannot be answered at the moment ...... .
Udecott’s administration and recording of the payment process is, without doubt, appalling. That alone contributes to fuelling controversy, even if no conversational actings exist.”
12.45. Mr McCaffrey produced a final report dated April 2009 limited to payment issues on the Brian Lara Stadium. It should be recorded that while Mr McCaffrey had intended to return to Trinidad to continue his investigation, arrangements for his further visit were cancelled at short notice in late February 2009. Mr McCaffrey continued to correspond with Udecott personnel but this ceased on or around March 3, 2009.
The Commission was given no explanation for this truncating of Mr McCaffrey’s investigations. However, at the request of the Commissioners, Mr McCaffrey completed a Supplementary Report on payment issues at the Brian Lara Stadium,which contained the following further observations as to Udecott’s records and organisation:
(i) Of 79 Certificates issued for advance payments, 39 were wrong in relation to the sum for payment of advance payment, 60 were wrong in relation to the amount of advance payment made to date and only four out of 79 correctly recorded the advance payment and the amount of repayment.
(ii) Udecott’s contemporaneous reporting of advance payment is materially wrong (ie under-reported) by tens of millions of TT$ for the vast majority of the duration of the project.
(iii) Udecott decided to back-fit Payment Certificates in February 2008. Those back-fitted Certificates also materially under-reported the amount of advance payments made. All the back-fitted Certificates have been endorsed by at least two signatories and in some cases three.
12.46. The above observations, concerning Udecott’s methods of operation are responded to in detail in Udecott’s Closing Submissions. With regard to the Lockwood Greene observations, it is stated that Udecott has made significant efforts to improve its management procedures; the lack of centralised filing system has been addressed; additional project staff have been employed; new procedures and software tools have been provided; additional site engineers have been engaged; and generally Udecott has adopted the recommendations of Lockwood Greene.
With regard to the “most significant criticism of late payment”, it is said that this resulted from longstanding inefficiencies in the public service and was not unique to Udecott.
A recently introduced automated accounting system should lead to improvement. In addition, Udecott has embarked on a comprehensive review of procedures and operations to improve delivery.
12.47. With regard to criticisms put forward by Mr McCaffrey, Udecott state that it was impossible to provide all the material requested in due time. With regard to the lack of programme analysis, this was the responsibility of the project manager, TAL; and the criticism of filing for the Brian Lara Project was challenged by Mr Pilgrim and Ms Noel. Further criticism of the accounting system on Brian Lara are dealt with in a later section of this Report.
12.48. While many of the observations above are specific to a particular project, they are nevertheless indicative of an accounting system which is seriously deficient to an extent that should not be tolerated in any commercial organisation, let alone one handling public funds. The deficiencies identified by Mr McCaffrey are potentially scandalous and Udecott management at all levels must be held to account for these deficiencies.
12.49. The first eight years of Udecott’s existence (1994-2002) represented a period of relatively low activity and absence of controversy. From 2002 onwards, however, Udecott has been continually and increasingly in the public eye as the government’s chosen agency for the promotion of development through Urban Construction Projects.
Their functions can be split into two elements: the setting up of projects on behalf of government departments in fulfilment of government development decisions; and the subsequent management of those projects towards completion. Only the first of these elements has been considered here: Udecott’s management function is reviewed in relation to specific projects in the following
sections and more generally Part V of this Report.
12.50. Udecott’s procurement role involves commissioning of design services followed by solicitation of tenders for construction (or design and construction) of projects selected by the Government, the analysis of tenders and, crucially, the drawing up and placement of contracts for such projects. As appears briefly in this section and in more detail in later sections, the analysis and decisions concerning the placement of contracts have proved most controversial.
It has to be recognised that the decision to award contracts to particular companies carries with it very considerable financial implications and inevitably gives rise (particularly in Trinidad and Tobago) to a suspicion of improper or corrupt influence. It is precisely in order to allay such suspicion that Udecott procurement functions (and that of other government agencies as well) should be conducted in as transparent a manner as possible, including clear and demonstrable compliance with applicable procurement rules.
12.51. We have noted above the lively debate which took place regarding which procurement rules should have been applicable to Udecott. It must be accepted that the Ministry of Finance, which issued new rules in 2005 apparently intended to cover Udecott was not consistent in overseeing their adoption by numerous government agencies to which the new rules might have applied. We do not regard Udecott’s failure to change their existing rules as culpable. Nevertheless, it is imperative that the Government and the Ministry of Finance should themselves decide whether the 2005 rules should be adopted by Udecott and, if so, take steps to ensure that they are so adopted.
UFF Report continues tomorrow