Braco winter opening delayed by lawsuit
Avia Collinder, Business Reporter
A lawsuit by two rejected bidders on a billion-dollar upgrade of the Braco hotel has delayed the repairs and cast doubt on whether the property can make it back onto the market this winter tourist season.
"I am unable to comment as the matter is in court," said Audrey Deer Williams, senior director of Investments for the National Insurance Fund (NIF), the owner of the property.
NIF plans to spend $1.5 billion on short-term repairs to the property before handing it over to Melia Hotels International SA, a Spanish hotel group, which has a 10-year contract to manage the resort under its brand. The handover was to have happened in time for the peak winter season, which runs for four months annually from December 15.
At the first request for tenders to be submitted by August 26, court documents indicate that the bid from local company, Build-Rite Construction Company, was rejected and another from GM & Associates Limited was cancelled, one allegedly for proposing a project duration of six months on a repair job that NIF wanted to run for four months. Build-Rite's Owen Campbell disputed that he made such a proposal, according to his affidavit to the court.
The two were said to be the sole bidders.
NIF retendered the project in November, but the two companies filed a lawsuit against NIF's subsidiary, NIF Resort Management Company Limited, and the Attorney General of Jamaica, to block the second tenders.
So far, the Supreme Court has ruled in the construction companies' favour but the case is ongoing.
Braco, a 226-room property in Trelawny, was closed at the end of May 2013 for upgrades to the property amid a transition to new management. Up to May 2011, the hotel was managed by SuperClubs for 15 years, first as Grand Lido Braco and later as Breezes Rio Bueno, and later under short-term contract by Blue Diamond Hotels and Resorts.
The Ministry of Tourism, in October, had said that a winter opening was in the works and that the property was pursuing hires of 180 workers.
On December 4, Supreme Court Justice Bertram Morrison granted a 14-day injunction against NIF Resort Management Company, which forces NIF Resort to resume the first tender process that was halted, and stops it from accepting new bids.
Justice Morrison also ordered NIF Resort to comply with the National Contracts Commission's decision that it should evaluate the bid submitted by Build-Rite Construction. The parties are to return to court for a hearing on December 18.
This is the second procurement case in which NIF's approach has been criticised - the first involving the contractor general, who knocked the state-owned pension fund for breaches of procurement rules in a deal struck with hotel manager Blue Diamond.
The NIF - within the last two years - has also sought to resolve a legal dispute with SuperClubs over its management of the hotel.
SuperClubs and NIF went to court in 2012 with the hotel group seeking compensation for business losses over what it alleged was NIF's failure to lift the resort property to standards worthy of its brand. At last update this case was in arbitration.
Braco hotel was acquired by the NIF in 2000 for US$23 million. It has since acquired adjoining property at a cost of US$275,000.