The day started out slow and lazy, not his usual style, but on this day, it was okay for Gordon ‘Butch’ Stewart. He was cruising Jamaica’s lush and rustic southcoast, still largely unspoilt and brimming with possibilities. This was 1992.

He stopped at a place called Ackendown Newtown, a stretch of verdant lands, lapped by the warm blue waters of the Caribbean Sea, thinking quietly to himself that if the Garden of Eden was located in Jamaica, it must have been in this idyllic Westmoreland oasis in the township of Whitehouse.

It was there that Stewart began to dream, that development of this godsend garden would serve as the catalyst that would usher in a new era of prosperity for the southcoast, through investments that would bring jobs and infrastructure.

First, he would have to acquire the property from the Government and did so, paying the equivalent of J$6 million in United States currency. When he had sought counsel of his wisemen, like Pat Lynch, Chris Zacca, Merrick Fray, Jeremy Brown and others, he decided to build a Beaches family hotel.

Stewart felt a sense of satisfaction, that yet again, he had found a way to give back something else to this wonderful country that had given him so much.

“We contemplated a design that featured canals and lakes with rooms on the water’s edge. The architectural concept was attractive, but not considered practical for a Beaches resort that would accommodate children,” he would later admit. When the project eventually hit the ground, it was changed to a Sandals hotel concept.

But neither Stewart nor any of his wisemen could have foreseen that 14 years hence, they would be appearing in the Jamaican Parliament to defend the project that has come to be known as the Sandals Whitehouse Hotel scandal, or as some ingenious if cheeky Jamaicans nicknamed it “The Scandals Whitehouse Affair”.

Last Tuesday, an unlikely scene unfolded in the Parliament, as Stewart and a high-powered team, which also included Jeremy Jones, general manager of the Whitehouse hotel, sat before the Mike Henry-chaired Public Accounts Committee (PAC) that is trying to determine how the construction of the hotel managed to realise a cost overrun of over US$43 million, from its approved budget of US$70 million.

The project is jointly owned by the state-run Urban Development Corporation (UDC), which acted as project manager; the National Investment Bank of Jamaica (NIBJ) and Stewart’s holding company, Gorstew Limited. It is managed by Sandals Resorts International, and Nevalco Limited – owned by Alston Stewart (no relation) – was hired by the UDC to be site manager.

Ackendown Newtown Development Company (ANDCO) is the entity formed by the trio to run and build the hotel.

‘Butch’ Stewart has pointed a stern finger at the UDC and Nevalco, accusing them of not bringing in the project on time and delivering it with inferior features that forced Gorstew to refund tons of money to early guests and hurt its vaunted Sandals name. The matter is now before the courts.

On Tuesday, it was Gorstew’s turn to relate to the PAC, its own role in the affair, following earlier submissions by the contractor-general, the UDC and the NIBJ.

Supported by extensive documentation, the team spent the time ruthlessly punching holes in several reports that the affair has generated, including that of a $28-million Forensic Audit Report.

At the outset of his presentation, Stewart stressed that, contrary to what the contractor-general (C-G) had done, the current Sandals Whitehouse Hotel project was not to be confused with the original 1992 and 1997 design concept that was aborted because of “the unsuitable architectural design and the fact that at that time, other active projects such as Sandals Resort in St Lucia and the expansion of existing hotels in Jamaica, took priority”.

“…Gorstew, the NIBJ and the UDC entered into a joint venture by and upon a Heads of Agreement in writing dated July 2, 2001 for the ‘planning, design, financing, development, construction and equipping, and leasing of a first-class, four-star, all-inclusive hotel located in Whitehouse, Westmoreland,” Stewart told the PAC. “Ackendown was the corporate vehicle by which the 2001 project was undertaken.”

He said the 2001 project had a new design, new investors, a new concept and bore no relationship to the aborted projects. “It was therefore neither contemplated nor expressed that the 2001 project would be the completion of a project as said… in the Contractor-General’s Report. The testimony to the contrary before the PAC by Dr the Hon Vincent Lawrence, OJ, is totally erroneous.”

In his turn, Lynch, a director of Gorstew Limited, slapped the C-G on the wrist for reporting that the original development budget for the project of US$60 million was based on a Beaches Negril resort concept and that the hotel at Whitehouse was intended to mirror Beaches Negril.

“This was entirely incorrect as Beaches Negril was never the design concept on which the 2001 project was to be based. It would appear that the Contractor-General was provided with inaccurate information and as such his investigation would have proceeded on an entirely erroneous basis,” Lynch argued.

Lynch also rubbished allegations in the C-G’s report of impropriety in relation to two contracts involving Gorstew – namely the Technical Services Agreement and the Appliance Traders Limited Consultancy Contract.

Said Lynch: “If there was any impropriety or breach of government procurement guidelines, said breach would be clearly the fault of the UDC who should have been aware of their responsibilities as a public body.”

With regards to claims in the report that there was a “conflict of interest, an absence of transparency, a lack of competition and the absence of an arms-length approach in the award of the subject consultancy contracts,” he told the committee that “this is not an accurate portrayal of the manner in which (the) consultancy contract was obtained”, insisting that “Appliance Traders Limited did not engage in any unethical contract practice”.

Speaking after Lynch, Jeremy Brown, who heads Implementation Limited which represented Gorstew on the technical aspects of project, was at pains to correct the Contractor-General in his assertion that the changes to the hotel from a Beaches to a Sandals concept resulted in increased costs.

Brown insisted that the changes did not result in any increased costs or contribute to the delays in completing construction, but instead, had realised a small saving. Furthermore, he pointed out, the benchmark for the design of the Whitehouse project had always been a Beaches Turks and Caicos French Village and not Beaches Negril.

The ultra chic Beaches Turks and Caicos, one of the top hotels in the Sandals/Beaches chain, took the prestigious 2006 World Travel Award for being the Caribbean’s Leading Family All-Inclusive, and for the second time in a row, the Turks and Caicos Leading Resort award.

Brown suggested there were no documentations to support the Contractor-General’s allegations that Gorstew had made numerous changes to the May 2000 design brief or to the drawings specifications issued for construction.

“This is wholly erroneous and we are yet to be provided with details of these changes. There is no documentation to support the allegation,” he pointed out.

Gorstew also contended that the Sandals Whitehouse did not represent “value in the ground”, contradicting the forensic auditors.

“All of the statements suggesting this, particularly the forensic audit report, display a lack of evidence or inaccurate information to justify this conclusion,” said Brown. “If Sandals Whitehouse represents ‘value for money’, then the hotel industry in Jamaica is in trouble as hotel developments would be uneconomical at these costs.”

The Contractor-General in his report had said the project represented value for money but later clarified that he meant this in accounting terms and not in economic terms.

When PAC government member K D Knight appeared to insinuate that Gorstew had paid J$6 million for the Ackendown land, but sold it back for J$10 million, Zacca, also a director of Gorstew, countered that the land was sold for the same money for which it had been bought, but the transaction was in US dollars. The difference of $4 million was as a result of exchange rate changes and devaluation in the period between.

The Gorstew team indicated it was holding the UDC to the terms of the Heads of Agreement that spelt out how any cost overrrun on the project would be borne:

“Gorstew shall bear the cost of any overrun which is due to instructions given by Gorstew for a change in the design or design brief after the design and design brief have been agreed and signed off on by the parties prior to commencement… UDC shall bear the cost of overruns which are due to inefficient implementation of the project or poor contractual arrangements…

Overruns which are due to events outside the control of the parties, such as changes in exchange rate or Government policy shall be borne by UDC and NIBJ.”

Gorstew will continue its submission before the PAC on January 9, 2007.

– With additional reporting by Alicia Dunkley