THE forensic audit report on the contentious Sandals Whitehouse hotel project was far less complimentary to the state-run Urban Development Corporation (UDC) than the selective picture painted Monday by Information Minister Colin Campbell.

The already massive overrun on the project that was put at US$41 million has now been established at US$43.3 million, an additional US$2.3 million, and the auditors blasted the UDC, which managed the project, and its sub-contractor, Nevalco Consultants, as being primarily responsible for the excessive cost.

UDC and Nevalco failed to exercise proper control and to conform with the various protocols established for the execution of the project, adversely affecting “the various checks and balances consistent with good management and cost control”, the audit found.

Yesterday, one day after Campbell culled portions of the report to tell journalists that the project had given value for money, the audit report was tabled in Parliament, providing the complete picture of an idealistic project that went awfully wrong.

The report, commissioned by former Prime Minister P J Patterson, took 10 months to complete and cost the government $28 million. It came amidst heightening controversy over the Westmoreland-based hotel that was originally the dream of hotel magnate Gordon ‘Butch’ Stewart to drive development of the south coast, a still unspoilt stretch of lush splendour and virginal scenery.

But the dream was dashed when Stewart’s Gorstew, one-third of the hotel partnership, with the UDC and the National Investment Bank of Jamaica (NIBJ), complained that his Sandals brand had been badly a injured because the hotel was completed later than scheduled and well below the quality visitors had come to associate with the name.

The audit team put much of the blame on the UDC, then led by Chairman Vin Lawrence and the Alston Stewart-led Nevalco.

It said the project manager and its sub-contractor had a responsibility to report project cost overruns to the board of the Ackendown Newtown Development Company (ANDCO) the joint venture company conceptualised in 2000 to develop the project – advise on how to reduce costs, and obtain the board’s permission to proceed with the works but, “from all indications, this was not done and this was one of the main downfalls of the project”.

Unfazed by the report, the UDC said in a statement yesterday that it had been “vindicated by the report of the Forensic Audit Team, as well as by the quality and viability of the final product”.

But the auditors also slapped the ANDCO board, saying it “abrogated its responsibilities to the project as it relied solely on the UDC for the checks and balances”.

“When these were not forthcoming, there were no efforts from the ANDCO board itself to rectify the situation,” it stated. “It was only when the expenditure on the project exceeded the US$70-million budget, as brought to light in January 2005, one month before the hotel was scheduled to open, that the board became aware that there were overruns on the project,” it added.

“The management proced-ures established for the control of this project were almost never adhered to. For this, the project manager must accept full responsi-bility,” said the report.

However, the report concluded that the 400-room hotel’s “architecture, design, furniture and decoration reflect the style and degree of sophistication that could classify Sandals Whitehouse as a four-star hotel”.

In respect of Gorstew Limited, the auditors found that the company was “greatly influential in determining the furniture fixtures and equipment and specialist items through the architect and interior designers”.

“Although they assisted in determining the revised US$70-million project budget, it appeared that special system items, such as air conditioning, standby generator, kitchen equip-ment, garbage disposal, special light fixtures and their installation, were not accurately accounted for in the budget,” the report noted.

The report gave a detailed breakdown of the overruns and concluded: “This represents a very unhealthy situation, which is not very common in the building industry.”

In respect of external influences on the cost, the report said that while there were increases in inflation, the cost of labour, and a rise in the cost of materials, especially from European sources during the life of the project, these increases did not form a major part of the cost overruns.

On the performance of the contracted parties, the report said that as a large percentage of the bills of quantities were provisional sums, it meant that UDC/Nevalco should have closely monitored the expenditure of those sums.

“…Overall, we are of the view that while the project was meant to be on a fast-track basis, most of the designs were not completed on time, resulting in claims for extension of time from the contractor and cost overruns.

“Ashtrom Building Systems performed poorly in general as a main contractor and has contributed to the overall delays in the completion of the project,” the report added.

It said that the situation was compounded by the inadequate performance of the consultants in providing Ashtrom with the necessary design details and information on time for the fast-track construction process as was originally intended and agreed by all.

Nevalco, sub-contracted by the UDC as project manager, also contributed to Ashtrom’s performance by not providing the necessary information from the consultants in a timely manner, “and not keeping a tight rein on the activities on site”, said the report.

“Nevalco outlined proper project management guide-lines at the outset, but these were almost never followed. It appears that issues were not always followed up and allowed to slip without due regard to the time schedule or the budget,” the report said.