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Fire them! - Shaw calls for marketing firm to be relieved of MoBay Convention Centre

Published:Thursday | February 21, 2013 | 12:00 AM
Mikael Phillips
Audley Shaw

Edmond Campbell, Senior Staff Reporter

A strident Opposition spokesman on finance, Audley Shaw, yesterday called for the contract of the international firm marketing the Montego Bay Convention Centre to be terminated but one of his parliamentary colleagues promptly accused him of presiding over the signing.

After being informed that the company, SMG Worldwide Entertainment and Convention Venue Management Company, had performed "miserably" in marketing the complex, Shaw charged that the contract should be rescinded.

However, Mikael Phillips, a member of the Public Administration and Appropriations Committee (PAAC), noted that the contract was signed in July 2011 and suggested that it would have had to be approved by the then Cabinet.

He indicated that at that time Shaw was the finance minister.

Yesterday, UDC executives reported that the corporation was paying out management fees of US$30,000 (J$2.7m) per month to SMG.

At the same time, the UDC is pumping in about $20 million per month to maintain the facility.

General manager of the UDC, Desmond Malcolm, was blunt in stating yesterday that the SMG consistently failed to meet the revenue budgeted, adding that the "failure is miserable".

Summoned to the PAAC to respond to questions about the property managed by the entity, Malcolm pointed out that the contract with the marketing company stated that "even if the facility loses or SMG fails to perform, then they still collect a fee."

40 per cent minimum

Eyebrows were raised when Malcolm further explained that, "If the centre makes a profit, SMG is entitled to a minimum of 40 per cent of the contract."

Lloyd B. Smith described as "scandalous" the payment of nearly J$3 million per month to the company that did very little or nothing to pull in income for the centre.

"We are in serious, dire economic straits in this country right now, and it is really a reckless type of environment we are in when we are seeing such amount of money being paid out every month for absolutely nothing," Smith lamented.

He said he was not casting any aspersions on the company but argued that immediate action must be taken to deal with the current situation.

Shaw, who earlier called for the termination of the contract, questioned what would be the cost to end the agreement with SMG.

However, Malcolm was unable to answer, saying he had enquired about that matter and was yet to be furnished with a figure.

He admitted that it would be costly to terminate the seven-year contract which was just into the second year.

Biggest cost

Responding, Shaw said: "The biggest cost in this is going to be the cost of a non-performing company over the next five years ... . It is unacceptable and must be brought to en end."

Malcolm divulged that steps had been made to bring other stakeholders on board such as the Jamaica Tourist Board, among others, to help market the convention centre.

Onika Miller, permanent secretary in the Office of the Prime Minister, who also attended the sitting, cautioned the committee that the Government had not taken any decision to terminate the contract of SMG.

"Any decision in respect of termination of a contract would in fact be informed by a legal opinion by the attorney general to analyse the terms and conditions under which such actions would be taken," she said.

Committee Chairman Edmund Bartlett supported the comments of Miller saying that "implications are dire if it is construed that the Parliament is either about to or recommending that their contract be terminated."

Bartlett warned Shaw not to put the committee at "risk" as a result of "any comment we make".