July hearing to examine construction

As the Minister for Education seeks to blame contractors and his predecessors for the $100 million high school fiasco, Rolston Anglin is likely to see defence evidence by architects and surveyors that could vindicate the builders.

And while Mr Anglin told the Legislative Assembly’s Finance Committee on Tuesday that arbitration of the dispute would start “in late July”, that will form only the preliminary battle. The main event in the three-pronged suit will not come until springtime 2013, just in timer for national elections.

The late July hearing will determine the validity of certificates signed by government and that Tom Jones International (TJI) says should have formed the basis for payments to the company. Officials now say the certificates are not valid, and should never have been signed.

While the parties to the dispute uniformly decline to comment, an outline of the situation suggests the arbitration will be both expensive and protracted, with the price and duration of the proceedings still unknown. Mr Anglin said on Tuesday he would move in late May or early July to secure government’s costs.

Not only is $17.5 million in change orders — some already paid – at stake, but also performance bonds, for which government has already issued a writ, according to Mr Anglin, but that TJI says should be cancelled; but also the fate of certificates of work completed; and the issue of the arbitration itself, embodied in comments of one analyst who asked why government was “going this way? It should have been settled a long time ago”.

Government originally agreed with TJI in May 2008 to build both the John Gray and Clifton Hunter high schools, pursuant to winning tenders of approximately $60 million for each.

Critical cost overruns, change orders and unpaid invoices quickly soured the project, however, with the result that on 31 October 2009, work halted on Clifton Hunter, followed on 9 November by John Gray, five months after national elections,

TJI claims they were entitled to cancel the contracts because they had not been paid, while Mr Anglin on Tuesday claimed that a “significant amount of shoddy workmanship” had forced government to underwrite repairs.

Acting on behalf of government, however, project architects and quantlty surveyors verified the work TJI completed, meaning any issues regarding workmanship would have been identified.

Those verifications formed part of government’s subsequent request for bids to complete
the schools.

In its defence, TJI is expected to point to the verifications and observe that the two building sites, behind Truman Bodden stadium and on Frank Sound Road, have remained largely unsecured and open to the elements for at least two years.

Mr Anglin yesterday, while acknowledging he had made some of the changes that are in dispute, pointed to six areas responsible for ballooning costs of approximately $100 million per school: architecture fees; project management fees; quantity surveying fees; the cost of site works; furniture, fixtures and equipment costs; and “other consultancy fees”.

“The construction contracts,” he said, “were for $120 million and they were for just that, construction only.”

Mr Anglin acknowledged that few of the six areas formed part of the Tom Jones agreement. Calling them “very expensive, he placed the blame squarely on the previous administration, although related questions may arise at arbitration.

“The fundamental issue,” one anaylst said, is whether the original design worked or didn’t work. It’s a series of questions. There were sign-offs on everything, and these will ultimately be claims at the arbitration.”