Gail Alexan­der

The Man­ning ad­min­is­tra­tion has claimed vic­to­ry in an­oth­er leg of ar­bi­tra­tion pro­ceed­ings be­tween Nipdec and NH In­ter­na­tion­al (Caribbean) Ltd (NHIC) con­cern­ing the Scar­bor­ough Hos­pi­tal project.

Health Min­is­ter Jer­ry Narace, in a state­ment to yes­ter­day's House of Rep­re­sen­ta­tives, said the is­sue in­volved the Oc­to­ber judg­ment of the Gov­ern­ment's ap­peals on the is­sue. "This rul­ing is a con­sid­er­able vic­to­ry for the Gov­ern­ment...this de­ci­sion redi­rects both par­ties to­wards the Third Par­tial Award and re­in­forces and ap­proves the ar­bi­tra­tor's de­ci­sion that the sum of $283 mil­lion claimed by NHIC in the ar­bi­tra­tion was gross­ly in­flat­ed and that the ac­tu­al cost of work com­plet­ed by NHIC was on­ly $133.2 mil­lion," he said. Narace said Nipdec's Ten­ders Com­mit­tee se­lect­ed NHIC in May 2002 to con­struct the Scar­bor­ough Hos­pi­tal at the con­tract­ed price of $135.9 mil­lion for com­ple­tion in just over two years. "The Scar­bor­ough Hos­pi­tal project is a clear demon­stra­tion of what the Gov­ern­ment has been say­ing about the un­ac­cept­able prac­tices of some lo­cal con­trac­tors and hence our de­ter­mi­na­tion to change the way pub­lic con­struc­tion projects are im­ple­ment­ed," he added.

Narace said the Gov­ern­ment was al­so suc­cess­ful in the mat­ter in con­firm­ing that there was no re­quire­ment for a state en­ti­ty to pro­vide a con­trac­tor with proof of Cab­i­net ap­proval of fi­nan­cial arrange­ments, where the FIDIC con­di­tions of con­tract ap­ply. "This is a le­gal vic­to­ry for the State and en­sures, both for this case and fu­ture cas­es, that this con­trac­tor and any oth­er like-mind­ed con­trac­tors will be un­able to claim any prece­dent of a need for Cab­i­net ap­proval in cir­cum­stances, such as this," he said. Narace said NHIC com­menced work on the hos­pi­tal project in March 2003, and from as ear­ly as No­vem­ber 2003, be­gan rais­ing is­sues. "As a re­sult of the con­trac­tor's un-co­op­er­a­tive ap­proach, the project pro­gressed slow­ly and the re­sult­ing de­lay formed the ba­sis on which NHIC made claims for in­creased costs," he said. Narace said that in 2005, NHIC sub­mit­ted a re­vised fig­ure of $222.2 mil­lion and in 2006, it sub­mit­ted a fur­ther re­vised fig­ure of $474.2 mil­lion for the project.

"NHIC's es­ti­mate for com­ple­tion of the project in 2006 was $338 mil­lion more than the ini­tial con­tract sum of $135.9 mil­lion," he added. He said NHIC, which sus­pend­ed work in Sep­tem­ber 2005, claimed $283 mil­lion in the ar­bi­tra­tion for work done on the project. Narace said NHIC's per­cent­age prof­it mar­gin cal­cu­lat­ed at bid was twelve-and-a-half per cent.