GORSTEW yesterday expressed shock at the contractor general’s insinuations of irregularity in the Sandals Whitehouse sale talks and that he had tainted the names of people of the utmost integrity involved in the negotiations.

The firm, Gordon ‘Butch’ Stewart’s holding company and a partner with Government in the Westmoreland-based Sandals Whitehouse Hotel, had reached agreement with the administration to buy the hotel outright for US$40 million or J$3.4 billion.

To ensure integrity in the process, the parties asked former Cabinet minister in the People’s National Party (PNP) government of the 1970s and outstanding businessman, R Danny Williams, to act as facilitator. Williams, founder of Life of Jamaica, now Sagicor, bears the seal of Jamaica’s fourth highest honour, the Order of Jamaica (OJ).

But in a 22-page letter to Prime Minister Bruce Golding and an accompanying press release, Contractor General Greg Christie recommended that the sale be stopped, suggesting that there might have been “possible irregularity and impropriety”, but not giving details of what these were.

Reacting to the CG’s attack last night, Gorstew spokeswoman Rachel McLarty declared that the company had done everything in openness and completely above board.

“There have been no secret talks, nothing clandestine, nothing irregular in any way,” McLarty told the Observer. “We are utterly shocked by the contractor general’s statements,” she said.

“The full boards and chairmen of the Urban Development Corporation, Development Bank of Jamaica, and Ackendown Newtown Development knew of the negotiations and the Government was fully in the picture,” said McLarty.

She described the facilitator of the negotiations, Danny Williams, as “a gentleman with the highest integrity” and said that “for the contractor general to sully the names of people of this distinction is a sad, sad day for Jamaica”.

Stewart had conceived of a hotel on Jamaica’s rustic and virginal but woefully undeveloped south coast, believing it was another opportunity to spur development and provide jobs for poor Jamaicans. But his dream rapidly became a nightmare when construction of the hotel went awry, with delays, defects and eventually massive cost overruns which he blamed on the UDC and its project manager, Nevalco Consultants.

In his letter yesterday, Christie said that his office would be opening an investigation into the decision by the Government to sell the debt-ridden hotel to Gorstew. He said that his office had completed evaluation of documentation regarding the proposed sale submitted to it by the Cabinet secretary on January 7, 2011, as well as evaluation of a statement made by Golding on the matter in Parliament last week.

And the Opposition People’s National Party yesterday lauded the contractor general’s move in its own release to the press.

Golding had told Parliament last week that the move to sell the Government’s stake in the property to Gorstew was made after considering all the facts and circumstances, while calling the previous arrangement made under the PNP “disastrous to the Jamaican taxpayers”.

The prime minister explained then that the normal procedures for divestment, by way of advertisement and competitive bidding, were not considered appropriate for a number of reasons, including the nature of the arrangement regarding the ownership of the property.

He noted that Gorstew was already a part-owner of the property through its 33 per cent share in the tripartite company, Ackendown Newtown Development Company Limited (ANDCo), the company which was formed to facilitate the hotel’s construction, with the Urban Development Corporation holding a 37 per cent share and the National Investment Bank of Jamaica a 30 per cent stake.

Also, based on the terms of the 2005 lease, Gorstew had a right of first refusal in the event that ANDCo wanted to dispose of the property. In addition, he said, the property was the subject of a long-term lease to Gorstew which has 14 years left to run and which would make it unattractive to a prospective third-party strategic purchaser, who would naturally wish vacant possession.

Further, the prime minister said, the terms of the lease and the projected rental income were unlikely to attract financial investors at a price satisfactory to Government shareholders, adding that Gorstew, having the right of first refusal, would be placed in an advantageous position in such a bidding process.

Christie, in his letter yesterday, also raised questions regarding the justifications which were given by Golding to proceed with the sale of the hotel to Gorstew Limited.

He also outlined what he said were “several issues which have raised serious questions and concerns of possible irregularity and impropriety” in respect of the proposed deal, including “certain unexplained circumstances” regarding the valuation of the hotel; specified conditions precedent for the consummation of the proposed deal which were not satisfied; as well as “apparent opportunities” which were presented to the Government “to pursue alternate (alternative) options for the sale or valuation of the hotel which were not acted upon”.