No need for open tender

Checks on the THA’s website yesterday showed they have posted a cache of 225 pages of documents in relation to the $320 million Raheal deal. Yet, none of the documents shed light on how the Rahael family firm came to offer a proposal to the PNM-led THA on the project.

While it has been reported that it was the firm of Hamel-Smith and Company that advised on the BOLT funding mechanism in general, the confidential legal opinion disclosed by the THA from Hamel-Smith and Company was not, in fact, in relation to the agriculture project, also known as the Milshirv project. The Hamel-Smith opinion was in relation to another project the, “Centre for Education, Sport and Youth”. The opinion concluded that the BOLT deal was acceptable to ful- fill a specific mandate of promoting sport.

However, it was a legal opinion by Jeremie, specifically in relation to the Milshirv project, that concluded that BOLT arrangements do not need to be subject to open tender.

“It is not a contract that is caught by the provisions of the Central Tenders Board Act 23,” Jeremie opined in his legal analysis, an undated copy of which is disclosed near the end of the 225-page THA bundle. The documents deal extensively with the background to the project (50 pages), namely the history of budgetary allocations. The THA these allocations have always fallen short of requested amounts and the legal requirements. However, the documents do not include budgetary allocations in alternative funding mechanisms: such as through ministries or other public sector investment programmes that are national in scope.

The THA released no documents detailing the talks with the Rahael firms that got the contract in the arrangement. Two letters from Joseph Rahael — a relative of John — of Amera Caribbean Development Ltd (which was not the company which got the contract but whose principals were the same as the eventual Rahael-tied company) are disclosed. They show that the THA was first approached on December 9, 2009, under the last PNM administration.

In a December 21, 2010 follow up letter Joseph Rahael noted, “There have been numerous meetings between the Division of Agriculture and our architects to advance plans for the proposed development. We stand ready to fly over to Tobago to commence negotiations on our proposal during the first week of January 2011.” The “talks” continued on January 17, 2011.

The THA’s final MOU with the Raheal firms had a confidentiality clause. According to the THA’s own documents, its own consultant, Project Specialists Ltd, reported that notwithstanding years of talks the prices were too high.

“It was also noted that the net building construction cost was estimated at $1,200 per square foot plus ten per cent for contingencies and a further ten per cent for preliminaries,” Project Specialist Ltd said in their internal report to the THA. “The gross rate for the building construction was therefore $1,440 per square foot. This is very high based on experience on similar projects. Although it is appreciated that the Developer may include a risk premium for the project due to the nature of the contract and the challenges of the location; the proposed rate was considered unacceptable.”

The consultant suggested open tendering as one of two possible options to achieve resolution of this matter: “1) Engage the services of an independent quantity surveyor of advice on the most realistic estimate. 2) Request the Developer to obtain competitive tenders from at least four suitably qualified contractors; two of which should be nominated by the THA.”