In excess of $500 million is owed to the Urban Development Corporation of T&T Ltd (Udecott) by government ministries and Health and National Security have been identified as the chief culprits of late payments.
The resultant trickle down effect of this has been the untimely payment to contractors, a Joint Select Committee (JSC) meeting was told by Udecott officials in Parliament yesterday.
In making the comment, Udecott chairman Noel Garcia, who noted they could be considered a “big project company,” said most projects exceeded $500 million and in the health sector in particular, even exceeded one billion.
Garcia, however, did not give a breakdown or elaborate on the extent of the sums owed by the ministries after his statement.
Contacted for comment on the claim yesterday, Health Minister Terrence Declassing referred the matter to the ministry’s permanent secretary Donna Ferrat.
Efforts to contact Ferrat were unsuccessful as she was said to be in a meeting at the time.
Other issues plaguing the company, Garcia said, included the absence of a strategic plan, which has resulted in operational policies and procedures being developed but not refined to fulfill a strategic objective.
But he said the company’s board had identified the development of such a plan and before the fourth quarter of this year one was expected to be implemented.
In giving an explanation for the absence of such a plan, Garcia said the company had depended on the directives of shareholders.
“It seems to me that Udecott was more client driven rather than strategically driven,” he added.
Another worrying issue Garcia highlighted was the absence of current audited financial statements.
“Udecott has struggled with maintaining financial statements up to date and its last published audited financial statements are for the year ending December 2007. The audit exercise for 2008 is completed and awaiting approval prior to publication.
“But this took a considerable time to conclude,” Garcia added.
He said that was due to the fact that Udecott’s records were incomplete and several documents were submitted to the Anti-Corruption Investigation Bureau for reference during the commission of enquiry into the Las Alturas Towers project.
These documents, he added, must be retrieved in order for proper financial audits to be done but he noted they were being assisted by Ernest and Young to fast track documents.
“The audits for 2009 and 2010 would be challenged with serious issues. Udecott has obtained advice and is pursuing alternative strategies for the acceleration for the completion of the audited statements to a status of currency by September 2017,” said Garcia, who described the lack of documentation as “unsatisfactory.”
Udecott, the committee heard, also had a high staff turnover amounting to between 10 to 15 per cent over the last three to four years. And for 2016 to date the turnover was already three per cent.
Outstanding projects
On the Brian Lara Stadium project, Udecott said it was currently preparing tender packages.
“In 2010 it was 95 per cent completed. However, because it was left unattended some deterioration took place. By the end of this week we should have all the packages out to tender,” chief financial officer Andre Ow Buland said.
He said once there was confirmation of funds work would commence in August and was expected to last six months.
Regarding the Red House, the company said it was preparing 15 separate packages which were expected to go out to tender soon.
Chief operating officer, Abena Richards, said designs were currently being reviewed and the redesigns and rescope should be completed by next July.
The budget for the Red House was $241 million for construction only and the lowest tender came in at $411 million, submitted by Shanghai Construction, while the highest bid was $694 million submitted by Buaine Baltimore International Ltd.
The third bid was around $535 million by NH International. The work required also took into consideration intricate restoration.
Richards said this time around several contractors would be used which they expect will reduce cost, adding: “We believe a significant amount of fat was built into the tenders simply because it was one contractor and not several packages.”
But Senator Wade Mark warned that Udecott would experience a “nightmare” regarding restoration of the Red House, given the large amount of technical work to be done. He said significant amounts of taxpayers’ money was already spent and work was yet to be completed.
On the Hyatt Regency Hotel, which is owned by government, Garcia said the hotel has been one of the more successful business investments made by the State, adding there was a $51 million reserve fund put aside for maintenance. There was also another fund, contributed on a monthly basis, amounting to $280 million.
He said every five years Udecott was mandated by the hotel management agreement to undertake major refurbishment works and the board also awarded a recent contract for major refurbishment works in the sum of $122 million.
On the Arima Health Facility, the committee was told that construction was ongoing and outstanding monies were paid to the contractor.
On the Point Fortin hospital, however, work has been slowed down due to the signing of the government-to-government agreement between this country and the Austrian government, Garcia said.
“But the Finance Ministry has come up with a temporary solution in advancing $90 million in the industry interim and should be released to the contractor this week and work will resume,” Garcia added.
The official handing over of the controversial Couva Children’s Hospital from construction firm Shanghai Construction to Government is also expected to take place at the end of this month, the committee heard.