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$1.5-b headache

Contractors seek OCG’s help in payment dispute with NWA, China Harbour

Monday, June 16, 2014    

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A group of local contractors who say they are owed approximately $1.5 billion for work completed for China Harbour since last year have asked Contractor General Dirk Harrison for help to resolve that and other issues that include their relationship with the National Works Agency (NWA).

The contractors wrote to Harrison last Monday requesting an "urgent meeting" to discuss ways in which the Office of the Contractor General can assist in resolving their problems.

They took the decision after trying, since last August, to collect payment for work done under the Government's Jamaica Development Infrastructure Programme.

According to the contractors, the bulk of the monies owed are for fluctuations, which, they said, is another term for cost escalation.

They explained that under the conditions of their contracts, they are to be paid for any movement in the basic price of input material.

However, they said that they have been meeting resistance, particularly from the NWA, which needs to approve payments before China Harbour can issue cheques.

"The truth is that the person who used to manage the contracts is no longer at the NWA," one of the contractors, who preferred not to be named, told the Jamaica Observer.

That person, he said, resigned and his replacement is not quite familiar with the formula, even though he has used it before.

"The last time we had a meeting with NWA they had indicated that by the end of May the matter would be settled," said another contractor. "We continue to find it a little difficult to sometimes communicate with them because up until recently they used to send us back to China Harbour and say that they're really not supposed to talk to us because we are sub-contractors to China Harbour. When we go to China Harbour, they send us to NWA."

Attempts by the Observer last week to get responses from the NWA and China Harbour were not successful.

The contractors also complained that they are having difficulty being paid for measured work, even though NWA personnel monitor and verify the jobs.

One of them gave as an example, his company's construction of a gabion wall in a river for which he was underpaid.

According to the contractor, in order to prevent the gabion wall being eroded by the river he had to build the wall deep below

the surface.

"When the auditor went out there he counted only those gabion baskets that he could see above the surface. I can't blame him, because he can only count what he sees, but NWA had persons monitoring the contract, and these persons verified the works," he said.

"In addition, every Monday morning they do measurement sheets that are signed by the contractor, NWA and China Harbour," his colleagues added.

The contractors said their plight has forced them to lay off staff — as many as 30 individuals in some cases.

They are also worried that their debts are increasing as they owe their banks more than $290 million combined, plus they need to pay suppliers and sub-contractors.

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