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Amaterra Jamaica seeks Contractor General intervention in casino resort bids

Published:Wednesday | March 4, 2015 | 12:00 AM
File Keith Russell, land developer and CEO of Amaterra Jamaica Limited.

Keith Russell, a principal in Amaterra Jamaica Limited, has asked the Office of the Contractor General (OCG) to weigh in on the process being used to select casino investors following another rejected effort last November to put his project back in contention.

Amaterra's bid for a casino resort order was first rejected more than a year ago for not complying fully with the required bid fees.

The contractor general has been asked to determine whether Amaterra was justifiably disqualified in its application for the so-called Approved Integrated Resort Development order (AIRD), which is a prequalifier for an eventual application for a casino licence, only three of which are provided for under law.

Russell and the company he represents also want the OCG to determine whether the minister of finance "misled the company into believing that he had the power to set conditions for the fulfilment of the application".

It is the second time that Amaterra has turned to the contractor general's office, the first being 2012 when it appealed for transparency and a level playing field in the bid process.

Based on that appeal and its own investigations, the OCG, under the signature of senior director Craig Beresford, wrote to Minister of Finance Dr Peter Phillips urging that the Government discontinue one-on-one discussions with private sector interests that had been initiated up to four years before.

Those talks were traced back to the administration of Bruce Golding, with the OCG letter referencing a heads of agreement with Celebration Jamaica Limited in March 2008 and correspondence with Phenion Investment and Development Group Limited in September 2010.

Beresford then urged Phillips to develop an open and competitive bidding process.

That process was initiated in June 2013 when invitations were issued by the finance ministry for applications for AIRD orders, which were to be tendered by November of that year.

Amaterra was one of five applicants as counted by the finance ministry. But the bids were later whittled down to two after Casino Royale Jamaica Limited withdrew and Amaterra and Fiesta Jamaica Limited were said to have fallen short on the payment of the mandatory application fees.

Fiesta later denied that it had bid, saying its submission was merely a proposal on how to improve the regulatory framework to better suit potential investors.

MORE CLARITY

Amaterra, which had initially held back US$127,000 of the US$150,000 fee in a push for the finance ministry to provide more clarity on the casino laws, later handed over the funds on the condition that the ministry not cash the cheque until Amaterra got the audience it sought.

The Ministry of Finance threw out Amaterra's application as a result, saying the bid was non-responsive.

The company's lawyer, Harold Brady, tried to keep Amaterra in contention by appealing to the Finance Ministry in July 2014, but that effort failed. Phillips responded on November 4 that he had no power to waive the fee requirements and urged Amaterra to collect its two cheques and bid application.

Russell himself responded to the minister on December 23, charging that the non-responsive designation given to his company's bid was contradictory to the treatment afforded Celebration Jamaica and charged that Phillips had misled his company back in March 2014 when he acknowledged receiving the bid fee and advised that a meeting with the AIRD project coordinator, Apec Consultants, would be forthcoming.

Celebration did not pay over the US$150,000 fee at the opening of the bids in November 2013, saying it had paid previously in 2008. However, the company later paid the full fee in February 2014 in order to remain in contention.

Russell also wrote to Contractor General Dirk Harrison on December 23, asking his office to weigh in, having previously advised Phillips that he would be seeking other recourse.

By letter dated January 29, 2015 under the signature of senior director Maurice Barrett, the OCG advised Russell that his complaint would be reviewed and the results conveyed to him.

Sources close to Amaterra have told Wednesday Business that the meeting initially sought by the company with the ministry back in 2013 regarded the requirement of developing 2,000 rooms within a specific time frame, based on the concerns of its potential backers as to whether Jamaica could absorb such a large addition to its room count within a limited period.

Under the mega-resort projects, investors are expected develop complexes that feature a casino and at least 2,000 hotel rooms, among other facilities. Investors will be eligible to apply for the casino licence after delivering the first 1,000 hotel rooms and producing a schedule for developing the rest.

Amaterra's US$1.45 billion project proposes five ocean-side hotels comprising 2,300 rooms; 2,000 residential lots; commercial space; an entertainment and dining complex; a large convention centre; casino and attractions; and an 18-hole championship golf course.

The principals in the company are Jamaican developer Russell and American Charles Murphy III of Arkansas.

avia.collinder@gleanerjm.com