Sandals and Gorstew, two of Butch Stewart’s companies involved in the Sandals Whitehouse project, yesterday vowed to open their files and present comprehensive documentation to the contractor-general, refuting any claims of impropriety on their part.

Gorstew director, Chris Zacca also expressed disappointment that much of the information that would have helped the contractor-general in coming to a more accurate conclusion was not presented to him, prior to his report issued Tuesday.

But, as the controversy over the southcoast hotel project heated up, Zacca, in a comment through his public relations firm, PROCOMM, made it clear that Gorstew/Sandals shared the concern of the contractor-general Greg Christie in his findings on the lack of transparency and accountability in the construction project.

“Our attorneys will be writing to him, to document and clarify these issues,” said Zacca. “We wish to assure the public that Gorstew/Sandals has observed the highest ethical standards throughout the entire duration of this project.”

Said Zacca: “Gorstew/Sandals have always valued our reputation and are extremely disappointed that we have been associated with this unfortunate situation. We sincerely hope that once the facts are documented by our attorneys the truth will prevail.”

In his detailed response to Christie’s stinging report that fingered the state-run Urban Development Corporation (UDC), Zacca outlined the issues that led Gorstew, Stewart’s holding company and Sandals Whitehouse Management limited, the other entity he is using for the Westmoreland-based hotel, to sue the UDC and two other developers for US$21 million for breach of the terms under which Sandals leased the property.

Sandals complained in its suit last November that the UDC and the two other developers – the National Investment Bank of Jamaica (NIBJ) and Ackendown Newtown Development Company (the UDC and the NIBJ own two-thirds of Ackendown, while Gorstew owns the other third) failed to deliver the property completed and fully functioning when the hotel opened in February last year.

Sandals, which manages the hotel, said it was forced to cut rates and refund hundreds of guests. The company also said the issue damaged its reputation.

The hotel was completed more than a year behind schedule and well over the US$70-million budget. The contractor-general, in his report, put the final amount at nearer to US$110 million.

And the Opposition has claimed mismanagement and cronyism during the hotel’s construction, which was overseen by the UDC.

Sandals is seeking US$29 million for the losses it incurred and wants the court to rule that it should not contribute to the US$41-million cost overrun because it made no material design change to the property that would have contributed significantly to the increased cost.

But the UDC has claimed that a substantial reason for the cost escalation was because of extensive changes in design demanded by Gorstew/Sandals.

Commenting on one of the key points of the conflict – the matter of the US$41 million cost overrun on the project – Zacca said he believed that the contractor-general had been totally misinformed on the reasons for the cost overrun.

“This had nothing whatsoever to do with the change from Beaches to Sandals,” he said, insisting that Gorstew had never asked for any changes other than the ones amounting to US$1.2 million, a sum already acknowledged in the report on the Sandals Whitehouse project, submitted by the Noel Hylton committee convened to facilitate an amicable solution of the issue.

Zacca, who is also deputy chairman of the Jamaica Observer, said that in accordance with international hotel practice, Gorstew/Sandals – being the prospective tenants – made specific agreements with the developers to put in place technical support through a Technical Services Consulting agreement.

This was to ensure that the property would be constructed to the corporate standards of the Sandals/Beaches organisation.

“This consultancy was executed by Gorstew’s technical representative, Implementation Limited. Such a consultancy could only be provided by the prospective hotel operator and as such this was not a service that could be provided by a third party,” he explained.

Zacca said it was true that Appliance Traders Limited (ATL), another Stewart-owned company had been awarded a consulting contract to design kitchen and laundry facilities for the sum of US$63,100.

“However, as a consequence of their success in a tender commissioned by Nevalco to supply kitchen and laundry equipment, this fee was applied as a first deposit against this contract and thus Appliance Traders Ltd absorbed the design fee because they won the tender.”

Nevalco Consultants was the company, owned by Alston Stewart (no relation), which had responsibility for the day-to-day adminstration of the project.

“I believe that the contractor-general had been totally misinformed on the reasons for the cost overrun,” Zacca said, rejecting any claims that this had anything to do with the change of name from ‘Beaches’ to ‘Sandals’.

“On the contrary our Technical Consultant, Mr Jeremy Brown of Implementation Ltd has pointed out that the change from Beaches to Sandals only required a change of the type of bed in some rooms, the removal of interconnecting doors between rooms, and the movement of some electrical outlets. In fact, the exercise resulted in a net savings.”

Zacca also stated that despite regular meetings of the board of directors of Ackendown Newtown Development Company, the project manager, the UDC, did not report to the board any cost overruns until January 2005, one month before the opening of Sandal’s Whitehouse, in February 2005.

The board of Ackendown Newtown Development Company, of which he and fellow Gorstew representative Patrick Lynch are members, discussed a cost overrun of US$15,000,000 at that meeting.

“The Board was kept in the dark regarding these overruns principally because of the poor reporting procedures of the Project Manager. In fact, as late as July 10, 2003, twenty-one months after construction commenced, the quantity surveyor and the project manager advised the Board that the project was on track with no overruns,” he added.

Zacca stressed that Gorstew was always dissatisfied with the financial reporting procedure of the project, and early in the project actually worked with their technical consultant to develop a format that would track the implementation and expenditure as the project progressed.

“Despite many repeated letters demanding financial information in a proper format, we never received a satisfactory response. “We at Gorstew are extremely disappointed that these facts were not made known to the contractor-general, before he prepared his report,” said Zacca.

“All of these statements are carefully and completely backed by comprehensive documentation. Our attorneys will be writing to him, to document and clarify these issues.

“We wish to assure the public that Gorstew/Sandals have observed the highest ethical standards throughout the entire duration of this project. Gorstew/Sandals have always valued our reputation and are extremely disappointed that we have been associated with this unfortunate situation. We sincerely hope that once the facts are documented by our attorneys the truth will prevail.”