Independent panel to oversee three major projects

Independent panel to oversee three major projects

BY ALICIA DUNKLEY Observer senior reporter

Thursday, April 26, 2012

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GOVERNMENT has established an independent oversight panel (IOP) to strengthen the existing monitoring framework of three major infrastructure projects — the North South Link of Highway 2000, the Gordon Cay Container Transshipment Hub and the Fort Augusta Container Terminal.

The panel was established by the Government in light of concerns raised by Contractor General Greg Christie, who argued that the direct negotiations taking place could lead to engagement of the parties through contractual arrangements. He was also not pleased with the proposed developments not being open to competitive tender.

"I took a decision to not only subject these projects to the existing approval process but to expand the monitoring framework by establishing an IOP comprising persons whose professional integrity, expertise and commitment to Jamaica are unquestionable," Transport and Works Minister Dr Omar Davies told Parliament Tuesday.

Members of the tripartite panel are Principal and Pro-Vice Chancellor of the University of the West Indies Professor Gordon Shirley, businessman R Danny Williams, and retired territory senior partner for auditing firm PriceWaterHouseCoopers Everton McDonald. The panel will give oversight to the three unsolicited proposals to ensure "value for money, transparency, accountability, effective monitoring and controls while providing project evaluation and technical advice", according to the minister.

The administration received the immediate backing of the Opposition. Spokesperson on transport and works and infrastructure Karl Samuda said "I think it is without question that such a set of plans and proposals deserve support". He also said the IOP will serve the process in a very constructive way.

At the same time, Samuda urged the Government to move quickly on the developments or risk losing the economic benefits of the projects, especially as it related to the reopening of the Panama canal.

Dr Davies said the transport and works ministry and its entities were mindful of the position of the Office of the Contractor General and others with regard to the need to subject unsolicited proposals to tender told the Parliament that the assessment of the National Contracts Commission (NCC) was sought and their "no objection" was received for each proposal.

"In the commission's opinion these proposals are not procurement matters as defined by the Government of Jamaica procurement handbook, further the NCC has recommended that the merits of the proposals be discussed with the Ministry of Finance and Planning for guidance before submission to Cabinet," Dr Davies said.

According to the minister, the Government, after due consideration of the "enormous potential impact of the projects to the economy", took the decision to advance the projects in a manner consistent with good governance and transparency.

In February of last year, the then Jamaica Labour Party Government ratified a Memorandum of Understanding for the construction of the North South Highway link by China Harbour Engineering Company (CHEC). Further negotiations were, however stalled, following concerns raised by Christie about the lack of competition in the selection and award process.

Dr Davies told Parliament that Cabinet considered the issues during its meeting on Monday of this week and made a determination to proceed with the conclusion of the negotiations and move forward with the implementation of the highway project.

Said Dr Davies: "It is estimated that total investment in the project will be in excess of US$600 million with no financial contribution expected of the Government of Jamaica. It is no secret that the country faces serious fiscal constraints over the medium term consequently unless we are willing to continue with a long period of economic stagnation we have no option but to attempt to maximise the level of private investment."

The projects, he said, were considered to be of strategic importance to the development of the Jamaican economy particularly after the opening of the widened Panama Canal in 2014.

"The three projects are expected to capitalise on Jamaica's strategic position with respect to international shipping lanes, leverage the benefits of our natural harbour and advanced port development, enhance road linkages while opening new areas for further development, generate employment in the maritime and transport sectors and expand the country's economic base," the minister said.

Noting that upon assuming office just more than three months ago, Dr Davies said he had realised that significant work had been done to advance the projects, Dr Davies said the administration had agreed to take the steps to implementation.

In the meantime, he said the feasibility studies which were agreed on for the Gordon Cay development will be carried out. The world's largest shipping conglomerate, CMA CGM Group of France had approached the Port Authority about the development of the transshipment facility. An MOU was signed between both entities in 2011.

"At the end of the feasibility studies a final proposal will be presented, including a lease agreement and or any other agreements as necessary to implement the project; the studies are being undertaken at no cost to the Government of Jamaica and do not represent any legal commitment on the part of the Government or its functionaries to award a contract to CMA CGM when the MOU expires," according to the minister.

As it relates to the Fort Augusta Container Terminal, Dr Davies said Cabinet's approval for the continuation of the process for assessment and negotiation of the various proposals was sought on the basis of the likely positive impact these strategic investments would have on the transportation and infrastructure network, the port and trade related activities and the overall development of the country. An MOU was also signed with CHEC, which had expressed an interest for the development of the container terminal. Dr Davies, however, emphasised that the MOU was non-binding.

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