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Life Sport audit: $34m lost on stalled project

Published: 
Sunday, July 27, 2014

A vague multi-million dollar contract and poorly outfitted centres cost the Life Sport programme $34 million for an incomplete training project. The contract between local education provider eBeam and the Ministry of Sport/Sport Company (Sportt) is detailed in the Central Audit Unit’s report and shows a December 2012 agreement for numeracy and literacy training as part of the educational aspect of the Life Sport programme.

The agreement mandated the payment in two tranches, one $17 million payment at the start of training and the second, final, payment on or before September 2, 2013. By January 2014, Sportt had not yet made the final payment and sought legal advice, asking attorneys at JD Sellier & Co, whether it was still bound to pay the second and last tranche, even though eBeam Ltd had not delivered on the agreement.

Sportt’s legal head, Lisa Solomon, was informed that because the contract was not subject to delivery there was no legal reason to withhold payment. “Failure on Sportt’s part to provide facilities required by eBeam puts Sportt in breach of its contractual obligations,” the lawyer found. “The payment of the remaining 50 per cent of the contracted price (the remaining fee of $17M) is linked to a date ie September 2, 2013 and not upon certain services being completed within a timeframe,” the letter noted.

According to the documents, eBeam was unable to begin its educational training because of difficulties and inadequacies at the Life Sport centres including lack of basic amenities such as water, electricity and toilet facilities. There was “little or no tables and desks, few chairs, poor lighting and lack of fans,” the legal report stated.

“It is not clear who owns or has control over the centres and if there was a contract between a third party and Sportt and/or Ministry of Sport to ensure the buildings and facilities were up to a certain standard in preparation for eBeam to carry out its scope of services under the contract,” the legal letter stated. “However, as it stands Sportt is legally obligated under the contract to have provided the facilities for eBeam as set out in the contract.”

This legal advice, contained in the letter dated January 17, 2014, also suggested that Sportt investigate the shortcomings at the Life Sport centres. “As previously mentioned, Sportt should conduct an investigation into the allegations made by eBeam regarding the inadequacies of the centres, as Sportt is legally obligated under the contract to provide facilities/places that are required and necessary for eBeam to carry out its services,” the letter stated. Several calls to the company went unanswered.