$20M dispute over Govt towers

Ministry of Finance documents, obtained by Newsday, show the Government’s plans to merge the Customs and Excise Division and Inland Revenue caused Udecott, the manager of the $3.3 billion Government Campus Plaza project, to halt work on two buildings on the campus last May. By letter dated May 2, 2008, permanent secretary in the Ministry of Finance Alison Lewis wrote to Udecott chairman Calder Hart asking him to “temporarily stop” fit-out works at the Customs and Excise Building and the Board of Inland Revenue (BIR) Tower because the Government had decided to merge the two entities.

“This may result in some departments being housed in one building or the other,” the permanent secretary noted. “Though these decisions are still to be finalised, what is sure is that the current organisational structure that Udecott has been using to inform the layout designs for the (fit-out) phase of the project will no longer be valid.

‘‘We are therefore requesting that you temporarily stop the layout design portion of the project while we finalise the new organisational structure of the Revenue Authority and are better placed to make decisions as to where individual departments should be housed.

“We recognise that to date considerable work and resources have gone into the layout design, however, we believe that it wold be better to slightly delay the project to ensure that we achieve the best fit rather than proceeding with existing information that may or may not change.”

The permanent secretary encouraged Hart not to be too pessimistic about the negative effects of the development on the project.

“We do not believe that all that has been done is lost since only location types and numbers of users on a floor will change but styles and general strategy may stay the same.”

But by September 8, 2008, Udecott opted to resume the fit-out progress, awarding a $278 million contract for the fit-out of the BIR Tower to Carillion (Caribbean) Limited

“We confirm that you are required to undertake the works as described in your proposal dated June 13, 2008, for the interior fit-out of the 23-storey office tower and five-storey archives building at the Government Campus Plaza for the Board of Inland Revenue,” Udecott corporate secretary Neelanda Rampaul wrote on that date to Carillion.

But while a contract was subsequently awarded for fit-out of that building, which is yet to be handed over to Udecott, to date no such work has occurred for the Customs and Excise Building. This despite the fact that the building was handed over to Udecott since January of last year.

But in addition to the effect of the Government’s plans on the status of the project, an arbitration battle involving a contractor Udecott had originally hired to do fit-out (or internal fixtures works) on the two buildings now looms over the establishment of the TTRA. Sources close to the project yesterday disclosed that the original contractor, CDAG Interiors Limited, was fired by Udecott in 2007. Arbitration over whether or not Udecott breached its contract and outstanding payments owed to CDAG is due to commence. The amount in dispute is an estimated $20 million.