ASHTROM Building Systems Limited, the main contractor on the contentious Sandals Whitehouse Hotel Project, is to face the Public Accounts Committee of Parliament at its sitting next week, on the recommendation of Auditor General Adrian Strachan.

Strachan who said he has remained quiet during most of the committee’s sittings because of the “political nature” of the exchanges, said the contractors would have to respond to several “very serious charges” laid by project partners, Gorstew/Sandals during last week’s sitting of the committee.

Furthermore, he said, quantity surveyors employed to the project – Goldson Barrett Johnson – would also have to return to answer further questions from the committee, as it continues its investigations into the US$43-million cost overrun on the joint venture project.

“Serious charges have been made by Gorstew as to exactly whether certain important items were overpriced and those have to be resolved and I believe the quantity surveyor might be able to assist…There is also the very serious charge again by Gorstew that for a negotiated contract the profit margin is excessive. The committee needs to have some clarification on that point,” Strachan insisted.

“The contractor needs to come before the committee and clarify the company’s role in all of this. A serious charge has been made that the project management procedures were circumvented, the contractor needs to address that particular issue, as to why these variations took place, who it was that instructed these changes, were these instructions properly given, and if not, why were they acted upon?” the auditor general asked.

According to Strachan, there had been ‘serious’ omissions and the contractor and the quantity surveyor could be the answers to the missing pieces of the puzzle the PAC was seeking to solve.

Opposition member Delroy Chuck, in concurring with the views of the auditor general, said it was time overruns on government projects that were staunched.

“Let us bear in mind that (on) virtually every single government project we have overruns and it is about time it’s stopped in Jamaica.

The impression is given that people will bid on contracts in order to get the contract, knowing full well that there is an open cheque that we call overruns and it is about time this sort of behaviour is put to an end. When there is an overrun or there is anticipation of an overrun, there needs to be special permission before that money is spent so that value for money is obtained from Government revenue,” Chuck said.

He was supported by colleague member Joseph Hibbert.

“I find it a bit difficult that somebody has negotiated with a contractor rates that are so far from market rates,” Hibbert said. Moreover, he said, there were variations that were not in accordance with the contract documents.

According to Hibbert, allegations that material purchased for use on the site which were carted away by the contractor after the completion of the project needed to be addressed.

Last week, director of Implementation Limited, Jeremy Brown who worked for Gorstew on the project, charged that overpricing for some purchases for Whitehouse were as high as 40 per cent above market rates.

Implementation also suggested that there was excessive pricing on the concrete of approximately US$1.8 million, marl of over US$500,000 and reinforced steel of over $390,000.

The results of a forensic audit report on the project, which has been studied by the committee, has shown Ashtrom as performing unsatisfactorily.

dunkleyk@jamaicaobserver.com