On the road to Point Fortin, UNC corrupt practices with OAS led to delay

“The Government that I lead will ensure that the interest of the people of T&T is paramount and comes first every time. We must ensure that what is right remains right and what has been done wrong is set right.”- These were the words of PM Rowley in his feature address on Friday.

On Friday 8th June, a critical stretch of highway was opened along the Solomon Hochoy Highway Extension to Point Fortin creating greater ease of access in and out of Golconda, Debe, Penal, Siparia and Fyzabad to the Dunlop Roundabout in Point Fortin.

It is expected that this highway will create a new path to the further development of Trinidad and Tobago.

The Prime Minister and Minister of Housing, Dr. Keith Rowley emphasized in his feature address that the former administration acted against the advice of NIDCO and international best practices in several ways.

They include:

Awarding the project as one contract to a single contractor. As a result of the expanse of the contract, local contractors were automatically ineligible to participate in the project.

On the last working day before the 2015 general election, a contract addendum allowed the contractor to escape termination of contract despite their declaration of bankruptcy. In doing so, it created avenues for legal challenges against the present government which terminated the contract and sought to recover funds from the contractor.

Prime Minister Rowley extended congratulations to Minister Stuart Young and the team at NIDCO and the Office of the Attorney General which succeed against OAS in local and international courts and recovered approximately $1 billion TTD.

Dr. Rowley highlighted that this Government has disaggregated the project into smaller packages, thus allowing for greater participation of the local construction sector. Moreover, he noted that local contractors will be held accountable in the same way that OAS was held to account.

The Prime Minister further stated that we cannot develop our country in the capricious and corrupt way that we have been doing- “We need to reject corruption as a way of life in the business of T&T. There are too many corrupt practices involving public funds, and there is a cost to it. It keeps a large part of the population in perpetual poverty.”

Dr. Rowley reiterated the government’s support of the local sector and commitment to settling outstanding debts as we continue a path of national development.

Package details:

1) Package 2A involves the Completion of the widening of 3.4 Km of the South Trunk Road from east of Dumfries Road to west of Mosquito Creek Bridge

2) Package 2B involves the completion of the widening of 2.0 Km of the South Trunk Road from east of Godineau River Bridge to east of St Mary’s Junction

3) Package 2B also involves the completion of the 32.0 m span Mosquito Creek South Bound Bridge and the 90.0 m triple span Godineau River Bridge (both North and South Bound).

 

The Minister of Communications, Stuart Young also delivered a thorough presentation on the history of the Point Fortin Highway Extension. During his speech, Young defended the delays saying it was essential for citizens to know the problems the Government faced in getting the project up and running. “It is absolutely shocking what has taken place with this company that was hand-picked by a former administration and they don’t like us to remind you the public as to what took place in the past.”

Young says photographs showing People’s Partnership (PP) executives flying all over the world in a private plane with Construtora OAS executives (now jailed), on their way to the World Cup in South Africa, where the then Minister of Works and Transport was located globally, have been sent to the police for an investigation.

Young said tenders were invited prior to the May 2010 general elections and tenders were received in April. However, the PNM did not award a contract because the bids they received were significantly higher than the engineer’s estimate of $3.6 billion. An engineer’s estimate is the detailed cost estimated for a project, computed by estimating the cost of every activity in a work breakdown structure, summing up these estimates and adding appropriate overheads.

It was in March 2011 that the PP, through NIDCO, awarded a design/build contract to OAS for TT$5.2 billion, which was $1.6 billion more than the engineer’s estimate, Young said. The contract was for four years at $5.6 billion and was supposed to be completed in 2015.

He said among the questionable practices they found upon taking over Government was that the PP changed the advance payment terms customary with FIDIC contracts from 10% to 20%. This amendment resulted in OAS receiving approximately $856 million as opposed to $428 million as an advance. He said even before contraction began, the PP paid OAS over $1 billion, as the project was being funded directly from the treasury as opposed to IDB financing, which has proper checks and balances. By the time the PP left office in September 2015, Young said over $5 billion was spent with only 49% of the construction completed. He said the payment did not include the hefty cost of land acquisition.

In law, OAS was considered to be bankrupt in March 2015, hence the Government was within its right to terminate its contract. But Young said by March 2015, the PP should have immediately invoked a clause to terminate OAS on the grounds it was bankrupt.

“On Sept 4, 2015, the last working day before a general election, the UNC government, rather than use an opportunity to terminate the contract in a clean, cost-effective, non-contentious manner, they secretly and corruptly entered into a written agreement with OAS whereby that government waived the ability to terminate the contract on grounds of OAS bankruptcy.”

“Instead, on Sept 4th the UNC government reaffirmed in writing, their desire to keep a company that was bankrupt in Brazil and the subject of the largest corruption scandal in the world within recent times as their preferred contractor for the Point Fortin highway.”

The OAS contract was terminated under the PNM in July 2016 and the Attorney General’s office successfully defended the State against arbitration brought by OAS for termination of the contract. The State was also able to recover standby letters of credits and bond.

However, in addressing Young’s claims, Oropouche East MP Dr. Roodal Moonilal said it was the PNM who recruited the OAS. He said this was done hours before the PP won the 2010 general elections.

“Before Mrs. Persad-Bissessar could have been sworn in they obscenely recruited OAS. They left us with OAS as the ‘preferred contractor’. We worked with OAS and accelerated this project. They stopped it for two years until they re-negotiated in their favour, as they did with the Point Fortin hospital.”

He added, “At the end of our term, OAS faced problems and the PP government acted to secure the project, which we did. If any law was broken, they had three years to report to the police and take action. That they have not suggests that the Partnership’s action was legal.”

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