UDECOTT'S $681M LEGAL TOWER MESS

Previously, a $368 million contract for the project was given by Udecott in 2006 to a company which once listed Hart’s in-laws as directors and which once shared Hart’s personal fax number.

But now a second contract, worth $313 million, for the fit-out of the building, which was awarded to Sunway Construction Caribbean Limited even in the face of outcry over the first contract award in 2009, has gone missing, triggering a legal wrangle which now threatens to engulf the project in millions more in costs. Sunway could be poised to take on the $313 million fit-out contract in defiance of the will of current Udecott chairman, Jearlean John, and after a total of 263 errors were reported by project managers Turner Alpha at the 23-storey Sunway-built skyscraper as far back as January 10, 2010. The issue of Sunway’s claim to a $313 million contract was a key one for the Udecott board at a marathon meeting held at the firm’s Sackville Street, Port-of-Spain offices this month and at a site visit paid by the chairman the day after.

The 263 errors at the building at Richmond Street, Port-of-Spain, are detailed in a 16-page Turner Alpha report which has been obtained by Sunday Newsday. According to the document, at the building’s ground level there were: “leaks to curtain wall”, “rainwater pipe insulation covering incomplete”, “incomplete caulking to curtain wall and up stand”, “caps to glass door closers missing”, “curtain wall works incomplete at public hall wall”, a “chip to structural glass at south entry”, the “interface between partition wall and curtain wall incomplete” and “incomplete work at wall joint”.

At the basement there were “leaks at south C-6 columns”, “leaks at movement joint at ramp”, “incomplete ACP cladding”, “lights to ceiling not installed”.

At the mezzanine level the project managers noted several snags, including: “wall around pipe chase incomplete”, “vinyl skirting incomplete”, “incomplete insulation”, “install fresh air grill to north”.

Some of the snags were attributed to a sub-contractor. In some instances, Sunway was reported to be “awaiting the manufacturer/supplier for feedback for a resolution” to some of the problems. Other problems included: the lack of safety signs across all levels of the building (Sunway indicated that safety signs would be installed last), warped doors and panels, missing fire sealants, inconsistencies in curtain wall sills and levels and incomplete drywall and sealant. There were also issues with sagging air ducts.

At the top of the building, on level 23, problems observed included: “double bent (double doors)”, “safety signs incomplete”, “ACP cladding incomplete”, “damaged asphalt water-proofing”. On average, at each level of the building, there were about a dozen snags.

It is understood that after the building was handed-over last year, the State was unaware of the report of errors. By the time the errors had been picked up, months had elapsed into the warranty period for the building. However, the errors will be covered by the warranty period of Sunway’s contract, according to persons close to the project. Construction experts noted this week that errors on buildings are not unusual. However, they raised questions over the performance of the contractor and noted that if errors cross a line and become akin to more than five percent of the value of total construction costs, this would be regarded as unusual. Basic construction of the building, Sunway’s first project in the country, is said to be 95 percent complete. With questions lingering over Sunway’s performance on the construction of the tower, the company is poised to take legal action if the Udecott chairman John declines to let the company proceed with the fit-out of the building.

It is understood that John, in 2010, at her only meeting with the previous Udecott board (which was later asked to resign following the findings of the Uff Commission of Inquiry which recommended police action) issued a clear policy warning to that board that the $313 million contract should never have happened.

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John told the previous board members that such a project should have been subject to an open tendering process. Previously, Sunway was reportedly informed that they had been awarded the fit-out contract. In a project status report to Udecott in September 2009, Sunway reportedly alluded to a letter of award they received. Udecott, under former chairman Hart, issued a statement on October 14, 2009, defending its decision to issue a letter of award to Sunway.

“Udecott’s issuance of a letter of award to Sunway Construction Caribbean Ltd for the fit-out of the Ministry of Legal Affairs Tower was done after careful consideration of value for money, maintaining the completion schedule of the building and having the building fully operational, occupied and generating income in the shortest possible time frame,” the company argued.

But Sunday Newsday has learnt that the Sunway letter of award for the $313 million contract has, to date, not been located by staff employed by Udecott. According to multiple sources who spoke with Sunday Newsday this month on condition of anonymity because of the sensitivity of the legal issues involved, checks of all files in relation to the project have not disclosed the contract.

“There are as yet no indications of any board minute showing that this contract was ever properly approved,” one source said. “We have checked all of the files and there is no contract on file. It is possible that Mr Hart sent the contract directly.”

It is understood that before his abrupt departure from Udecott this month, the former chief legal officer, Richard Freeman, told John that he was of the view that Sunway had a legal claim to the $313 million fit-out contract on the basis of correspondence they received. Freeman warned John that if the fit-out contract does not go ahead with Sunway, the company could sue for damages.

Potentially those damages could run into the millions for loss of profit as well as for costs of fit-out design work which has already been commenced by Sunway, plus any penalty fees if found to be appropriate. Taxpayers could end up paying for the $313 million fit-out to be re-tendered to another contractor, plus damages to Sunway. Alternatively, the State could be virtually compelled to allow Sunway to finish the $313 million contract in the face of a criminal investigation around disclosed links between Hart and the firm. If this is the case, Sunway would have bagged a total of $681 million in work on the project.

The Udecott board, two weeks ago on May 12, held a marathon board meeting at which the issue of the Sunway contract was referred to. It is understood that the company has resolved to review the paperwork surrounding the project.

Contacted by the Sunday Newsday yesterday on the matter, John said, “I have no comment on any of these issues.”

However, in relation to defects on the building, John noted that they are currently being reviewed. At the hearings of the Uff Commission of Inquiry, a paper trail culled from documents submitted by Udecott disclosed that Hart appeared to communicate directly to Sunway, in his capacity as chairman. This type of communication by the former chairman with a contractor, according to officials at the inquiry, was highly unusual.

The paper trail also showed that Hart shared a personal fax number (624-8239) with the company. Two former directors of the company are also in-laws of Hart. Sunway also issued a sub- contract on the project to Times Construction Limited, a firm of SCG managing director Michael Zhang.

Zhang’s SCG and Hart built a controversial church at the Heights of Guanapo in Arima for a so-called spiritual adviser to former Prime Minister Patrick Manning, Juliana Pena.

Director of Public Prosecutions, Roger Gaspard, this month said a police probe of Udecott under Hart, started since March, 2010, under former Ag Commissioner of Police James Philbert, remains ongoing. Allegations in relation to the MLA project were first raised by then Tabaquite MP Ramesh Lawrence Maharaj almost three years ago in 2008.