Forensic Report Concludes that Cost Overrun on Sandals Whitehouse Project is Justified

The US$41 million cost overrun on the Sandals Whitehouse Hotel project in Westmoreland is in keeping with the size and specification of the hotel, and is justified, according to the Forensic Audit Report on the project.
“The hotel constructed is of the highest quality and substantially, there is value for money,” said the report, which was tabled by Prime Minister, Portia Simpson Miller in the House of Representatives on Tuesday (Sept. 5).
According to the document, the magnitude of the development required substantive works “leading to additional construction cost of electrical installation.sewage drain runs, water supply, walkways, landscaping and irrigation and storm water drainage”.
In terms of the base price of US$220,000 to construct each of the 400 rooms on the property, the report said this “could be considered reasonable.well above average and into the upscale property range,” as “the quality of the final product.the architecture, design, furniture and decoration, reflect the style and degree of sophistication that could classify Sandals Whitehouse as a four-star hotel”.
Meanwhile, the document said that, “despite the operational problems along with the negative publicity, the hotel has been reportedly enjoying high occupancy levels” since it opened in February last year.
As stated in the document, lease payments of approximately US$ 6.15 million have been made to the owners over the period July 2005 to July 2006. The sum comprises approximately US$2.4 million for the fixed lease payments and approximately US$3.6 million for occupancy adjustment over the period.
On the matter of developmental benefits from the hotel, the audit states that, “it is clear that this hotel development, as part of the regional development plan, has already had a positive economic impact on the Whitehouse and surrounding communities”.
The report lists that job creation, which would pump millions of dollars into the local economy on a weekly basis, as well as improvements in housing and skills training, were additional benefits, which are reasonably anticipated.
Furthermore, restaurateurs, hardware store operators, financiers, motor vehicle dealers, would enjoy benefits from the new hotel, the report said.
Minister of Information and Development, Senator Colin Campbell, told journalists at Monday’s (Sept. 4) post Cabinet press briefing that the original projected cost of US$60 million was totally inadequate for the kind of hotel that the parties intended to create.
Furthermore, Minister Campbell said, the hotel has enjoyed record occupancy rates, and if this support was sustained, the company would be able to service the debt without having any recourse to the shareholders.