Port could face retender

(CNS): Concerns about the development of the George Town cruise facilities and the need to get the project back in line with what the UK Minister for OTs called international procurement best practice may see the project retendered. During his visit to Cayman last week Henry Bellingham said he had “numerous concerns” about that project and wanted the premier to seek advice from the auditor general and the chair of the Central Tenders Committee on how to ensure the project will, going forward, meet the standards of good governance expected. He did not spell out exactly what he meant by that but it could mean the project may have to be bid all over again.

It may be very difficult for the premier to reach the standard of best practice which the UK is calling for as the CHEC proposal was never part of the original tendering process. At the very least, Bellingham made it clear the port would be the subject of much wider scrutiny before the premier would be in a position to sign a definitive agreement with the developers, China Harbour Engineering Company.

Auditor General Alastair Swarbrick confirmed that so far the premier has not asked him for any advice. "If and when I am asked for my advice I will provide that to government,” he said but would not elaborate on how he would advise the premier to get the project back in line with best practice.

However, Swarbrick said his concerns regarding the procurement process generally were outlined in last year's performance audit report. “We made the shortcomings of the current practices very clear and our concerns relating to the involvement of politicians in the procurement process known. Those concerns still exist and we are looking to see how the government will address them.”

During his visit last week the overseas territories minister emphasised over and over the need for good governance and for the Cayman government to follow best practice in procurement. Bellingham said he was not concerned about the nationality of the proposed developers and was not opposed to international investment.

“There are concerns on a number of issues, including procurement and the major projects,” Bellingham said. “I believe it’s vital that such important projects be procured in-line with international best practice to ensure value for money. I have concerns over procurement of the cruise ship terminal project, which I have raised with the premier. I have made it very clear to him, for me to be able to support the project it must be in line with international best practice.”

The minister said he was seeking reassurance as to how the premier would achieve this and spoke about the importance of trust and confidence. “This is a huge project for the Cayman Islands and one that’s incredibly important to get right,” he said.

The FCO minister stated that the financial framework agreement which the premier signed last year went further than the issue of public spending. It is also about good governance across the whole of the public sector and procurement, Bellingham said, adding that the Cayman people needed to have confidence in the procurement process. 

In the most recent public comments about the project Ellio Solomon, who is leading the negotiations with China Harbour, stated that construction would start in September, which may well be wishful thinking since there are numerous hurdles that the government will have to jump before the FCO is satisfied that the project meets with the requirements of the financial framework agreement.

When government first announced its own plans for the port after winning the 2009 elections, the project was put out to tender. DECCO, the Dart Group’s construction company, came out top in the first bid from the Port Authority’s short list. However, the islands’ largest investor pulled out of negotiations with government when the parties reached stalemate over the period of time Dart wanted to lease the upland development area in order to recoup its investment.

GLF construction was the next bidder on the shortlist, so when the DECCO talks collapsed, Cline Glidden, who was the government’s lead negotiator at the time, moved into talks with the Italian-based firm and their local partners, Royal Construction. Just weeks before the company was ready to mobilize, the premier, going over the heads of the port board and his own back-bencher, announced his decision to terminate those talks as he did not believe GLF had the cash, and moved into negotiations with CHEC.

The Beijing-based firm, however, was not next on the port’s list as it had never taken part in the original bid. As a result, in order for the project to get back in line with what the UK considers international procurement best practice, the bid may have to be retendered.