12.52. It is noted that various infringements of the 1998 rules by Udecott have been identified. In view of the Commissioners, however, the significant areas in which possible breach or abuse of the procurement rules must be considered are the following:
(i) Excessive and unfair use of sole selective tendering powers leading to breach of obligations as to free and fair competition as well as transparency.
(ii) Misuse or manipulation of tender and tender — review procedures leading to the inappropriate and potentially corrupt award of contracts. This observation applies particularly in the case of the awards in respect of the Ministry of Legal Affairs Tower and the Brian Lara Stadium, each of which is considered later in this Report (Sections 14 and 16 respectively).
12.53. We have reviewed extensive presentations concerning Udecott’s accountability or lack thereof. It is an inevitable consequence of the decision to create Udecott as a private limited company that powers of control available in respect of statutory bodies are not directly available. Despite this, it is surprising that any such dispute should arise between a Government ministry and a Government owned company. Given the economic importance of Udecott there is clearly a case for reverting to the original proposal contained in the 1993 Snaggs Report and re-creating Udecott as a statutory corporation with appropriate ministerial powers. However, short of that, there should be no difficulty in principle in creating more appropriate procedures which Udecott is required to follow.
12.54. We have reviewed above a number of complaints, primarily from the JCC, as to what amounts to mal-administration by Udecott. We have also reviewed serious concerns arising from an internal review of Udecott’s performance by consultants called in by Udecott, Lockwood Greene, together with observations presented to the Commission by Mr McCaffrey resulting from his detailed investigation into a number of projects, but concentrating on the financial aspect of the Brian Lara Project. While the matters disclosed by Lockwood Greene may amount to no more than incompetent organisation and administration, the internal organisation within Udecott which has dealt with financial administration for the Brian Lara Project has given rise to serious alarm, the deficiencies identified by Mr McCaffrey being nothing short of scandalous. This raises the equally serious question as to how such a state of affairs can have been permitted to arise. We consider in more detail in Section 16 the financial aspects of the Brian Lara Project where it is noted that Turner Alpha, the original project managers, sought to raise alarm bells, which Udecott has ignored and has succeeded in marginalising. What still requires explanation is how such events could have occurred given the number of senior professional staff employed by Udecott, in addition to the members of the board, all of whom should have been aware of the level of irregularity which was being permitted.
12.55. We have noted above the apparent absence of any note of criticism or dissent within the Udecott staff and the dominant influence of the Executive Chairman, Mr Calder Hart. To the extent the failure of senior staff and directors to raise any voice in opposition to the level of financial irregularity found on the Brian Lara Project amounts to loyalty, such loyalty is clearly misplaced. We consider in the concluding section of this report, and in the light of further and detailed consideration of specific projects, appropriate recommendations to improve Udecott’s future performance.
12.56. It is noted that, while the Snaggs Report recommended two executive directors, along with a conventional chairman, the current structure of the board is without executive directors, other than the executive chairman. As well as concentrating power in the hands of one individual, the combining of the post of chairman and chief executive is contrary to the OECD Guidelines on Corporate Governments of State Owned Enterprises. Udecott in its final submissions point out that Trinidad is not a member of OECD and the principles are not widely followed.
Udecott also states that current members of the Udecott board have “considerable executive experience”. While this may be so, none of the non-executive directors (whatever their executive experience) can have a detailed knowledge of the projects being undertaken by Udecott, nor do any of them appear to have construction experience. While executive staff may be invited to attend meetings, they have no authority. The proof of this particular pudding is in the surprising lack of action by the board in relation to irregularities which will be seen in projects reviewed in the next following sections.
12.57. Finally, it is appropriate to revert to the consideration (conducted as a round table discussion) in section 9 of the Government White Paper proposing legislative reforms (which no longer enjoys Government support). At paragraph 9.12 the issue of oversight is considered and the contribution of Udecott (through Mr Calder Hart) is noted. Udecott considers that it has sufficient oversight through the Public Accounts Committee, the Central Audit Unit, through ministers themselves as well as through Cabinet and through the Parliamentary process. Having regard to the observations above, and the more detailed analysis of projects in the next following sections, it is clear that the oversight referred to by Mr Calder Hart has been seriously ineffective in responding to the deficiencies identified so far in this report.
13. C and E Building
13.1. The Customs and Excise project was the first element of the new Government campus project and the first major project to be undertaken by Udecott. This was to be a 10-storey building of some 190,000 sq ft. The project was to be let on the design-tender method using local consultants as architect, QS and consulting engineers (structural and M and E). Bids were invited in October 2002, on an open tender basis.
The closing date for tenders was extended on a number of occasions eventually to March 11, 2003. The response was reported to be good and an Evaluation Committee was set up to consider tenders and provide recommendations on the basis of the Instructions for Tender, which reflected the pre-qualification criteria set out in the Udecott Procurement Procedures. Dr Rowley’s statement asserts that at some point in late April 2003, he began to receive reports from a variety of sources, including the board, of serious bickering within the board and allegations of favouritism, manipulation and conflicts of interest; also of one-man domination and questionable conduct on the part of the chairman. When cross-examined he was reluctant to name his sources but said that he was being told by people who claimed to be in the know as to what was going on. In part the information came from an innocous comment by Mr Madan Ramnmine, which caused Dr Rowley to speak to
13.2. Of the eight tenders received, the lowest was from Hafeez Kmamath Ltd (HKL).
HKL was interviewed by the Evaluation Committee on May 1, 2003, which resulted in a complaint as to the manner of their treatment. The third report of the Evaluation Committee dated May 12, 2003, which evaluated HKL’s tender, recorded failure on three grounds namely: management and organisation, personnel and equipment, and financial capacity. On a date between May 13 and 15, while Dr Rowley was in St Kitts at a meeting of the Cmibbean Development Bank, Mr Calder Hart said (and Dr Rowley denied) that he was telephoned by Dr Rowley who advised that the HKL group was in financial difficulties. The Evaluation Committee’s report was considered at a meeting of the Tenders Committee of the Board on May 22, 2003 when Mr Le Hunte proposed that the three grounds of rejection could easily be overcome and in the result the Tenders Committee resolved to award the contract to HKL. Mr John Mair, a Director and member of the Tenders committee went along with the decision but expressed concern that HKL had been accepted as financially sound and said that he mentioned this concern to Dr Rowley. It was subsequently alleged that Mr Le Hunte had a conflict in that he was a director of a bank which was owed substantial sums by HKL.
13.3. The decision of the Tenders Committee had to be ratified by the full board. Mr Calder Hart decided, additionally, to take legal advice on the tender evaluation process and consulted Mrs Deborah Peake. Her advice given on June 9 2003, which was disclosed voluntarily by Udecott, was to the effect that all of the tenderers should have been evaluated at the same time rather than individually as had been done, and that the evaluation process was accordingly flawed. In the result, Mr Calder Hart on the same day instructed the Evaluation Committee to evaluate the next five lowest bids.
13.4. On June 2003 Dr Rowley wrote to Mr Calder Hart asking to be advised on progress of the evaluation exercise and as to when the award would be expected. Since the reports of April it appeared that Dr Rowley had formed the view that Udecott was “vigorously attempting to violate its own published tender requirements in an effort to make an award to Hafeez Karamath, a contractor which did not meet several of the requirements set out by Udecott itself in its Invitation to Tender documents”.
Dr Rowley said that he was given to understand that the Evaluation Committee had prepared a report unfavourable to HKL and that attempts were being made to by-pass the Evaluation Committee. Dr Rowley accordingly summoned Mr Calder Hart to a meeting at the Ministry of Planning and Development, also attended by the Vice Chairman, Dr Balmdoorsingh and Victoria Mendes-Charles, permanent secretary. Mrs Mendes-Charles had prepared a report at Dr Rowley’s request which Mr Mair thought to be of very low quality.
13.5. Dr Rowley said that he raised with Udecott all the disturbing allegations that were being levelled against it including allegations of wrong doing. Mr Calder Hart’s version is that Dr Rowley simply expressed general concerns that any evaluation process by Udecott should be able to withstand a level of public scrutiny, a position with which Udecott had no disagreement. Dr Rowley said that he raised with Mr Calder Hart the fact that one member of the Board (Mr Le Hunte) was a senior executive of the bank which was owed substantial sums by HKL Group. There was also an issue as to when the conversation between Dr Rowley and Mr Calder Hart occurred, but they agree the meeting and conversation did take place.
13.6. At the conclusion of the meeting Dr Rowley escorted the party out. Both agreed that at this point Mr Calder Hart asked to speak to the Minister privately and on doing so, proposed that the Minister should meet Mr Karamath. Dr Rowley stated that he considered this suggestion to be improper and refused. Mr Calder Hart agreed that Dr Rowley declined to meet Mr Karamath but rejected any suggestion that the meeting was for some corrupt purpose as being absurd. Mr Calder Hart pointed out that Dr Rowley showed hostility towards Mr Karamath, but had waited four years before making these accusations. Dr Rowley agreed that he only disclosed the matter in August 2007.
13.7. One of the issues which had been considered both by the Evaluation Connnittee and the Tenders Committee was whether HKL, which had been in business for under five years but was part of a larger group, could pass the tender requirements by relying on the experience and financial standing of the group. On July 3, 2003, Mr Calder Hart decided to instruct QES to undertake what he described as a “proper evaluation” and submit a report to the Tenders Committee. This decision, as well as the earlier decision to take advice from Mrs Peak, was made by Mr Calder Hart himself, notwithstanding that his position was then chairman and not ceo. The decision to instruct QES was reported to the board on July 4,2003.
13.8. Mr Outridge of QES, who was to undertake the futher evaluation, said in evidence that he had been told by Mr Hart that there were those inside Udecott who, he felt, wished to manipulate the award of the contract. Mr Hart, it appeared, had failed to do anything about his concern. In further cross-examination, however, Mr Outridge accepted that what Mr Hart had probably said was that “the suggestion had been made to him” there were those who wished to manipulate the award of the contract. The Commission was urged, in the final submissions on behalf of Mr Calder Hart to conclude that there was no evidence that Mr Hart himself held the view that there were persons within Udecott who were attempting to manipulate the award but was aware that such a suggestion was made by others. We accept on the balance of probabilities that this was the case: certainly there were others, outside Udecott, who believed there were attempts to manipulate the award of the contract.
13.9. Mr Outridge explained in evidence that the time available and the state of the documentation had the effect of limiting what he was able to accomplish. He also charged the modest fee of only TT$10,000 for the work. The QES report was received on July 11. The report appraised the tenders on a points system and concluded, again, that the contract should be awarded to HKL. This report was forwarded to Deborah Peake to advise on whether all tenderers were being treated fairly. Her further advice, given by letter dated July 15 2003, was to the effect that the evaluation of HKL’s tender was flawed because QES had wrongly taken account of the track record and financial capability of both HKL and the parent company HKCL. This was an issue which was soon to re-emerge in relation to the award of the contract for the Ministry of Legal Affairs tower.
13.l0. A further letter was written by Mr Outridge bearing the date July 14 2003 which noted that all the tenders contained discrepancies and that, because over 120 days elapsed, the tender prices were no longer valid. QES therefore recommended the project should be re-tendered. Dr Rowley drew attention to these two documents as “the mystery of the two QES reports”. During July 2003, Dr Rowley received further reports about the tender process which he interpreted as indicating continuing tension in the Udecott Board. Dr Rowley stated that he also received information that John Mair, a member of the board, was upset about the way Udecott’s business was being conducted and had decided to resign from the board. Mr Mair was also of the view that QES was acting unprofessionally. Dr Rowley directed his permanent secretary to communicate with Udecott to obtain all the relevant documents. The permanent secretary’s note supplied the view that QES was acting improperly. Mr Mair’s version of events differed from that of Dr Rowley.
He denied having any intention to resign over the condnct of the tender process. Mr Mair, however, agreed that he considered QES to be acting unprofessionally and continued so to assert in his oral evidence where he stated expressly that he considered Mr Ontridge to be biased. Dr Rowley reqnested a meeting with the entire Udecott Board which took place on July 25. Mr Calder Hart’s recollection of the meeting is that the Minister stated that HKL had been recommended contrary to his instruction. Mr Calder Hart was of the view that the Minister had no right to dictate to the board. Udecott did, however, agree to carry out a final evaluation of tenders within two weeks and forward this to the Tenders Committee.
13.11. The second report from QES, in the form of a letter dated July 14, 2003, was not shown to Dr Rowley at the meeting on July 25. Mr Calder Hart denied that he had suppressed the report but agreed that the earlier report of July 11 was discussed at the meeting and was criticised by the Minister’s Private Secretary. He further agreed that he brought neither the opinion of Counsel on the tendering process nor the second QES report to the meeting.
13.12. Mr Calder Hart’s oral version of the events was that after the meeting with the board, when the Minister had given his opinion on the QES report and on allegations he had been hearing, he requested to see Mr Calder Hart. At this (private) meeting Dr Rowley stated that there were allegations of a corrupt relationship between Calder Hart and Karmnath. Mr Calder Hart said that he demanded that the Minister phone the person that he suspected the information had come from. The Minister emphasised that he was not saying the information was true, but was concerned that the accusations were being made. It was at this point, according to Mr Calder Hart, that he suggested that the Minister should meet Mr Karmnath. Mr Calder Hart emphasised that this had nothing to do with the tender but with the allegation of misconduct against him. Subsequently in cross-examination by Mr Peterson, Mr Calder Hart accepted that this version of events was not in his written statement and was consequently snggested to be untrue.
13.13. Dr Rowley then had an audience with the Prime Minister who was told that Dr Rowley intended to write a firm letter to Mr Calder Hart and that he proposed to spell out the procedures to be followed. He noted that the Prime Minister appeared non-chalant. Dr Rowley connnented to the Prime Minister that he viewed Calder Hart’s resistance to his intervention and guidance as unacceptable and potentially facilitating a corrupt award.
13.14. Dr Rowley wrote to Mr Calder Hart on August 5, 2003 stating that the process and procedures being pursued by Udecott were faulty and there was evidence that the tender process had been or was being manipulated. The letter set out guidance on the steps to be taken which included “discontinue the current process and prepare to invite new bids” from pre-qualified contractors only.
13.15. Following this, on August 11, 2003, Jolm Mair called for an immediate board meeting as a result of his concern regarding the QES report. The meeting took place on August 19 and also had available a list of criticisms of QES identified by the permanent secretary, which included the following:
(i) QES utilised additional assessment criteria which were not identified in the Tender Documents (Current Asset Ratio and Worldoad Calculation)
(ii) In respect of the financial and track record requirements, QES took into account information relating to the parent companies of both tenderers No 7 (HKL) and No 8 (NHIC);
(iii) HKL was awarded three points for construction methodology even though no such methodology had been submitted.
Mr Calder Hart considered this final criticism unfounded as HKL had submitted a construction methodology, which had been noted in earlier tender reports.
13.16. At the meeting it was accepted that some things had not been dealt with properly in the report. On the proposal of Mr Mair it was resolved that QES should not be hired for any new projects. The board decided to quash the process and to start a new tender process. Mr Calder Hart agreed in evidence that QES was in fact still working on the Government Campus project but stated that this was not a new project. For reasons that remained unexplained, Mr Calder Hart never produced a copy of the second QES report dated July 14, either before or at the board meeting of August 19 2003. Mr Mair stated that the first he knew of the report was when he saw it attached to Dr Rowley’s statement.
13.17. Mr Calder Hmi wrote to Dr Rowley on August 27, 2003 in reply to the Minister’s letter of August 5 expressing disappointment with the suggestion that the tender process was being manipulated and blaming the mistakes that had been made on “my attempt to correct the system on the run so to speak.” The letter concluded by stating that Udecott “is also standardising its tender procedures.”
13.18. The re-tendering process carried out in 2004 resulted in an award to N H International (Caribbean) Ltd (NHIC), owned by Mr Emile Elias. Dr Rowley accepted in oral evidence that Elias was a friend who had contributed financially to his unsuccessful campaign in 1996 to become leader of the PNM. At the end of his evidence Dr Rowley confirmed that he was not alleging that any actual corruption had taken place.
13.19. Particular’s of the Contract as finally awarded to NHIC were provided in a written presentation of Udecott. Fresh tenders were invited on January 5, 2004 from four contractors, each of whom had tendered in the first round and were therefore pre-qualified.
This time NHIC was the lowest tenderer by a margin of only some $400,000. No details of the tender evaluation were provided other than that the analysis was performed by Udecott and its newly appointed QS consultants, Michael Samms and Associates. For the second round of tendering, Udecott had the advantage of having previously assessed the capabilities of the four tenderers, whose compliance with Tender Rules was assured. It was not reported whether Hafeez Karamath Limited had been disqualified on financial grounds in accordance with the earlier advice of Mrs. Peak.
13.20. The original contract completion date was March 2006. The work was performed concurrently with other projects within the Government campus and became subject to major delays such that the work remained incomplete as at March 2009 when inspected by the Commissioners. It is reported that the original contract price has increased by approximately 13 percent although as at September 2008 only some 90 percent of the adjusted contract price had been paid to NHIC. Further details of the time and cost overruns are set forth in Section 23 below.
Involvement of the Integrity commission
13 .21. Sometime in 2004 (or earlier) the Integrity Commission was “tipped off’’ by an individual (who has not been named) about the alleged irregularities in the final award of the Customs and Excise Tower Contract to NHI. For reasons which are not clear, the Integrity Commission decided to investigate the matter in secret and gave no notice to Dr Rowley, who was apparently the main or only subject of the tip-off. The accusations in relation to the C and E building against Dr Rowley were that:
(a) he had influenced, procured or directed the decisions to quash the recommendations that the C and E Contract be awarded to HKL.
(b) he had influenced or procured the award of the Contract for C and E to NH.
(c) and that he had received benefits for these actions.