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Stabroek News

EDITORIAL: That Whitehouse debacle
published: Thursday | September 7, 2006

Whatever the spin, from whichever quarter, no one will emerge from the Sandals Whitehouse cesspool smelling of anything other than what they have been in.

As it was in the findings of the Contractor General, Mr Greg Christie, so it is in the report of Mr Desmond Hayle's forensic audit team.

Obviously, Sandals Whitehouse is a fine piece of real estate, a five-star hotel done in elaborate detail with expensive material and with operational facilities and redundancies on a scale that far outstrips most of what exists in Jamaica. So we can all head out to Westmoreland, thump our chests and imbibe the grandeur.

But having been enthralled by summer sunlight shimmering on the Italian porcelain tiles and to moonbeams dancing on the cast iron balustrades and mouldings of coral stone, if we stand long enough, quiet enough and inhale hard enough, there will still be the figurative stench. It is the stink of cronyism, incompetence, arrogance, failure of fiduciary responsibility, reckless disregard for public funds and an aggravated and wanton display of irresponsibility for which no one seems willing to take responsibility. All parties continue to claim and/or seek vindication.

Mr Hayle's report offers none, beyond the fact that we have an asset of some value.

It may be incontestable that by maintaining the consultants who were in place when the project started out as a solely private sector venture, kept the cost at six per cent of the initially projected value of construction, at half the industry's norm. But those contracts were handed confetti-style, without competitive tender, to the private firms of the heads of government agencies that were shareholders in the property or to firms owned by, or recommended by, the private partner.

But perhaps the most egregious observation by Mr. Hayle and his team is the absolute lack of oversight offered by the Urban Development Corporation (UDC), the partner with this responsibility for managing the project and its sub-contractor, Mr. Alston Stewart's Nevalco Consultants. The most benign reading of the report suggests, at its mildest, gross incompetence and a severe dereliction of duty.

So the Hayles report estimates that Sandals Whitehouse, completed for US$113 million, against its budget of US$70 million, given the period of its construction and taking into account industry norms, might have been built for US$88 million. But given over-engineering and redundancies, plus the spread of the property, that price was pushed to US$97.76 million. That would have been bad enough, but more mismanagement added another US$15 million to the budget, ranging from higher interest charges, to increased labour and material costs. We do not know what steroids may have been in these numbers.

Perhaps Whitehouse should preclude the UDC and Nevalco from ever again participating in a public sector project, but they alone can't be blamed for the debacle at Whitehouse. It can't be enough for the NIBJ, the state-owned investment bank, and Gorstew, the private partner, to say they didn't know. The Hayles document pointed to how additions and adjustments recommended by Gorstew's project oversight people went directly into construction.

It also seems to us a height of irresponsibility that the board of a company undertaking such a major development didn't have a formal meeting for a year. But who cares when public funds are at risk?


The opinions on this page, except for the above, do not necessarily reflect the views of The Gleaner. To respond to a Gleaner editorial, email us: editor@gleanerjm.com or fax: 922-6223. Responses should be no longer than 400 words. Not all responses will be published.

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