PM says Procedures must be Followed in Awarding Contracts

Prime Minister P.J. Patterson has said that while he agreed on the use of the system of competitive tendering in the vast majority of cases involving infrastructural projects, to ensure transparency and accountability, there were procedures to be adhered to in the event of exceptions to the rule.
“Anything else should be the exception rather than the rule and should be justified and the precautions must be put in place to ensure that the country gets the best deal,” he stated at yesterday’s (Feb. 1) sitting of the House of Representatives.
Mr. Patterson pointed out that this would “cut down one of the angles for attack on those who occupy positions in public life and are too often tainted and tarred with the brush of corruption when in fact, no such corruption exists.”
He was responding to concerns raised by Opposition Spokesman on Finance, Audley Shaw regarding the manner in which contracts were awarded, particularly for major infrastructral projects.
Mr. Shaw’s arguments stemmed from a Resolution moved by Finance and Planning Minister, Dr. Omar Davies, to approve the granting of a government guarantee for three loan facilities between the National Water Commission (NWC) and BNP Parabas, to finance the construction of the Martha Brae to Harmony Hall Water Supply Project.
Mr. Shaw argued that while he was not making an indictment on the integrity of this particular project, there were too many avenues being used to circumvent the established rules in the awarding of contracts, noting that process ought to be based on the system and the principle of competitive tendering.
“There is no question whatsoever that the system of competitive tendering has considerable advantages and I am prepared to say that this administration has taken the process of competitive tendering further than any other previous administration,” Mr. Patterson stated. He added that, “It (competitive tendering) is the better system but that doesn’t mean that it always produces the best results in each and every case, and there ought not to be situations where exceptions arise for consideration, but there must be a process by which we deal with those exceptions”.
The Resolution, which was approved by the House, provides for a government guarantee of loans totaling 16.4 million Euros by BNP Parabas for: a French Buyers Credit agreement for 6.63 million Euros; a Spanish Buyers Credit for 3.84 million Euros, and an additional loan agreement for 6.02 million Euros. Dr. Davies explained that this project was of importance because, “it will support the unprecedented investments in tourism taking place along the north coast”.
The Finance Minister noted that a major limiting factor in the expansion works in the sector was the unavailability of water and that this was why the Martha Brae to Harmony Hall system was of such importance. He said the project would benefit a number of communities including Martha Brae and Rio Bueno, Falmouth, Rock, Coopers Pen, Coral Spring, Carey Park, Duncans, Silver Sands and Harmony Hall.
It is anticipated that once adequate water supply is available in these areas, significant developments will follow including the Retirement housing and resort project, which will include 630 residential lots, a hotel and golf course; Florence Hall housing development; Harmony Hall resort; and Coral Spring resort, which will involve the development of more than 200 residential lots.
Other projects include the Hague housing development, which will see the construction of 1,000 houses by the Ministry of Water and Housing, and the Ridge Estate housing development that will include 800 houses and residential lots to be developed by the National Housing Trust (NHT).
The first phase of the water project will focus on the area from Martha Brae to Duncans, and will seek to improve efficiencies in operations that will extend water supply to areas not now served by the NWC. “It will include a comprehensive programme of leak detection and repairs to improve the efficiency for water delivery in an area from Negril to Duncans, including supply areas within,” Dr. Davies informed.
Meanwhile, the main component of the project covers the refurbishment of the Martha Brae water treatment plant to increase its output from 4 million gallons per day to its design capacity of 6 million gallons per day. Meanwhile, some 19.2 kilometres of pipelines will be constructed along with a booster station and two service reservoirs, each with a capacity of .5 million gallons.
“Critical to this whole project is that there will be a sub-project to deal with unaccounted for water and increased consumption maintenance contract,” Dr. Davies disclosed, further pointing out that some of the benefits of the project would be “increased revenue from water sales, reduced losses due to leakage and illegal connection and improved efficiency of NWC’s operations in the area”.
He stated that the initiative was not only needed because of the obvious benefits to the tourism sector and the investments, but that it was also “path-breaking, in that, this reflects the first major investment of this type by the private sector in terms of a critical infrastructure input such as the water services”.
The House also passed a Resolution, approving a government guarantee of a companion loan of US$20 million between the NWC and the National Commercial Bank (NCB) as local financing for the project.