IT would cost taxpayers $89 million if the Government pulls out of a seven-year contract with the United States-based firm SMG for the management of the loss-making Montego Bay Convention Centre in St James.

At the same time, there is no penalty imposed on the venue management firm if it does not perform under the existing contract, Parliament’s Public Accounts Committee (PAC) was told yesterday.

SMG is entitled to a US$28,000 per month (management fee) which does not include the cost to operate the convention centre, while it costs the Urban Development Corporation (UDC) another US$30 million monthly to cover all other expenditures at the facility, under a contract signed in 2011.

In the meantime, the UDC, whose General Manager Desmond Malcolm appeared before the PAC yesterday, has been asked to tell the committee, within two weeks, the names of the public officers who acted on behalf of the Government in vetting and negotiating the seven-year contract with SMG to market the Montego Bay Convention Centre.

“This contract was executed nearly two-and-a-half years ago, and looking at the contract it was difficult for my coming into office to improve the centre because there was not enough in the contract to ensure that SMG performed, and in terms of an exit clause it was not in our favour,” Malcolm told PAC members.

Government committee member Fitz Jackson, meanwhile, expressed concern that there was not much effort to position the centre internationally. “I expected to see more of that with the involvement of SMG. Was there any provision in the contract for those things to happen? Was there any obligation on the part of SMG to bring these things to the table?” Jackson asked.

Malcolm, in responding, said the UDC has had meetings with SMG with a view to revising some costs. “The decision is that we will review the contract with a view to convert the US dollar emoluments into Jamaican dollars so that when there is a devaluation we will be able to stabilise the cost,” he said. That decision, however, was no pacifier for committee members.

“So you just pay them the US$28,000 to sit cool while you go out there and hustle?” Government committee member Julian Robinson asked bluntly.

“It means whichever lawyers wrote that stuff, they just did not do a good job, it means they did not give value for money. It’s like SMG’s lawyers wrote it and sent it for UDC to sign,” Opposition committee member Everald Warmington said.

Malcolm told the PAC that the nagging contract was not drafted by UDC’s internal legal personnel but was drafted by external legal counsel.

“Since it is a sensitive matter, I would ask that you allow us to present detailed information on this contract as soon as possible; we are willing to provide this committee with detailed information,” he said.

“Apart from the general manager, I am requesting that the parties, the entities on the Government side who were responsible for vetting and negotiating the contract. I want to know who are the public officers who were acting on behalf of the Government in respect of this contractual arrangement,” Jackson said in pressing home his point.

In the meantime, committee members were of the opinion that the $89 million to prematurely back out of the contract could be the cheapest option in the long run. Malcolm said there might be a decision to terminate. “We have not turned there yet, [but] my focus is to make it bleed us less.”

“Look at that and see whether it would be in your interest,” Warmington said.

The contract, signed in 2011, puts SMG in charge of the reviewing of interior furnishings and furniture, developing operational plans, recruiting and training staff, developing sales, marketing, advertising and promotional programmes, in co-operation with the Jamaica Tourist Board. SMG also has responsibility for booking, event management and all related services for the centre.

The agreement should come to an end in 2018.

The convention centre was the first in the English-speaking Caribbean to be added to the portfolio of SMG, joining Puerto Rico, the only other facility from the region. SMG, in addition to its US-based operations, is also engaged in Europe, Turkey, Canada, Mexico, and Chile.

The Montego Bay Convention Centre was constructed by the UDC, through the China National Complete Plant Import Export Corporation, to enhance the country’s competitiveness in the meetings and conventions market.