The Forensic Audit Team has attributed these items to management deficits and I assume that this was done because they relate to issues arising from the implementation and management of the project in a general way.

However, they are not necessarily the fault of or caused by an act or omission of the Project Manager/Project Manager Representative (PM/PMR).

An analysis of these items indicates that they were on account of or otherwise related to delays on the project. The reasons for the delays which were confirmed by the Forensic Audit Team were:

This area resulted in increased payments of US$1,007,308.

The inability of Ackendown Newtown Development Company Limited to effect payment promptly, was due to: the unavailability of funds from the shareholders; shareholders agreement not signed, hence loan could not be accessed; late transfer of the title for the property.

The Forensic Audit Team stated that designs were consistently late in coming: "On the overall, we are of the view that while the project was meant to be on a fast-track basis, most of the designs were not completed on time, resulting in claims for extension of time from the contractor, and cost overruns."

Some of the site meeting minutes (e.g. June 6, 2002; July 4, 2002; July 25, 2002; October 31, 2002) will show that the PMR made complaints about the tardiness in delivery of designs. We must, however, recognise that in most cases, this tardiness was related to the delays in payment to the consultants for their services. It must also be recognised that most of the designs consultants, although engaged by the Owner, were selected by Gorstew and as implementation of the project unfolded, were effectively being directed/advised/instructed by Gorstew.

There was not much latitude in taking 'corrective' action such as termination. In any event, it was felt that termination would delay the project even further.

The fact is that Gorstew and its representatives relied very heavily on the Technical Services Agreement (TSA) and when disputes arose, the PM/PMR was often reminded of Gorstew's rights and entitlements under the TSA, Article 6.02: "Owner shall use its best efforts to implement Lessee-generated comments or modifications to all plans and specifications to the extent consistent with Article Two."

Article Two briefly describes the project and refers to some standards to be achieved.

Conflict

In practice, the exercise by Gorstew of its rights under the TSA, through its agent Implementation Limited, created in far too many instances, a conflict with the role of the PM/PMR. This resulted in, among other things, instructions being given to the contractor without the established procedures being followed. This is supported by the Forensic Audit Team in its statements that "Implementation Limited seemed to have performed an aggressive project management role in ensuring that the needs of the proposed operators were addressed.

However, the process of having designs approved and signed off on by both Lessee and Owner was not adhered to. The fast-track nature of the project and the late submission of drawings often resulted in the designs influenced by the Lessee being directly issued for construction" (Exct. Sum. 4) and "To further complicate the cost overrun issue, instructions were issued to the contractor by third parties, e.g. Implementation Limited, without going through the established approval process."

In many instances, disputes were resolved by allowing the request/instructions from Gorstew's representatives given the TSA rights, Gorstew being the would-be Lessee requiring certain standards and the need to avoid further costly delays, even abortion of the project.

The TSA was created to recognise and facilitate, in a formal way, the important input and role of the Lessee to ensure that the hotel was built to the standards expected by the Lessee. Given the conflicts it created and the consequential impact on the project, I would recommend that the arrangements as they were in the TSA be appropriately modified in any future similar venture.

The Forensic Audit Team, in my opinion, while recognising that the TSA arrangements affected the project, did not give a full and in-depth analysis of the effect that these arrangements in general, and Implementation Limited in its 'aggressive project management role' in particular, had on the project. In my view, Implementation Limited's actions, no doubt in their eagerness both to satisfy their client and to achieve an operating hotel as quickly as possible, contributed significantly to breaches of the approval process that was initially established by the partners of Ackendown.

While we could have forcefully brought an end to this practice, in our judgement, the further delays that this would have caused was considered not to be in the best interest of the project.

The UDC was not happy with various aspects of the implementation of the project but in the circumstances of the fast-track basis on which it was being implemented, the funding problems, the late delivery of designs (in many cases caused by payment delays) and the challenges of the TSA/Implementation Limited's breaches of the approval process, it was felt it had discharged its project management responsibilities in a reasonable manner.

Communication/Approval process

A number of comments have been made about Ackendown not having a board meeting for two years during the implementation of the project and the effect that this had on the project.

I must first make a correction. No board meeting was held for a period of 14 months, between October 31, 2003 and January 3, 2005.

I make two points in this regard. Firstly, it was generally not easy to convene a board meeting because of the quorum requirements, and secondly, during that period, there were a number of meetings held between the chairman of Gorstew, the then president of NIBJ and the then chairman of the UDC, namely me, sometimes with other directors present, and also between the chairman of Gorstew and me.

At these meetings, various aspects of issues relating to the project were discussed. There were also exchanges of correspondence between the chairman of Gorstew and me concerning funding issues. The project manager's reports were also circulated to the directors of Ackendown.

With regard to the approval process utilised for expenditure on the project, this is an area in dispute between the parties in the matters now before the courts and I would therefore seek the committee's agreement with my desire not to elaborate on it.

I will only say that in this regard, the parties placed great reliance on and confidence in the members of the project team, which included persons who were intimately involved in the budget preparation exercise, project implementation on site and deliberations at the board as members.

Other CG charges

With regards to the issue of the UDC deliberately concealing documents from the Contractor General, Mrs. Campbell has dealt with that issue in detail and I believe that any objective observer would conclude that while there were omissions in information provided, which has subsequently been rectified, there was no deliberate action or intention to conceal information.

This same information had been provided to others, including the Forensic Audit Team. It is unfortunate that in an investigation of this nature, where clarification and discovery are paramount to achieving the objectives of the CG, that he did not see it fit, in fact necessary, to forcefully, or otherwise bring the Matter to Mrs Campbell's and my attention.

This is the type of courtesy and thoroughness that we have experienced with the auditor General and hence, the general lack of challenge by public bodies over the years of the Auditor General's findings.

I maintain that although the UDC had an obligation to provide the information and the Contractor General had no legal obligation to advise us of omissions, his investigation would have been better served if he had done so.

One other peculiar position taken by the Contractor General which is amazing, given the need to know all the facts, is that he did not think it necessary to interview Mrs. Campbell, Mr. Shaw, the architect of record, a representative of Nevalco nor me in his investigation, unlike the Forensic Audit Team.

Conclusion

As I understand it, the primary mandate of this committee as it relates to the Sandals Whitehouse project is to determine the appropriateness of and the reasons for the increased costs over budget on the project and to make recommendations as to how we all can prevent re-occurrence.

In this regard, based on the difficulties experienced in implementing this project and the findings of the Forensic Audit Team, I make the following four recommendations for public/private sector joint ventures in the future:

I have sought to address some of these issues and no doubt will need to further do so when questions are asked by you. As far as the UDC is concerned, I have explained that in essence, there was no failure to perform its duties as Project Manager.

The UDC, along with NIBJ, and with the assistance of the Development Bank of Jamaica, also battled for over two years to raise and finalise financing in order to prevent the project from failing, as had happened twice before under Gorstew.

I am also satisfied that the project has already achieved part of the objective of the UDC when it decided to sell the land to Gorstew and later, to participate in the project.

One of the primary objectives was to create a catalyst for development (social and economic) on the southwest coast of Jamaica.