Derek Achong

A de­ci­sion by the Na­tion­al In­fra­struc­ture De­vel­op­ment Com­pa­ny Lim­it­ed (Nid­co) to can­cel a con­tract for the Solomon Ho­choy High­way ex­ten­sion project with Brazil­ian con­struc­tion firm Con­struc­to­ra OAS SA is set to cost the State al­most $1 bil­lion.

De­liv­er­ing a de­ci­sion on a par­tial fi­nal award on April 16, ar­bi­tra­tors John Fel­las, Adam Con­sta­ble, QC and An­drew White, QC, of the Lon­don Court of In­ter­na­tion­al Ar­bi­tra­tion, up­held Con­struc­to­ra OAS’s ar­bi­tra­tion claim against Nid­co and or­dered US$126.3 mil­lion (ap­prox TT$852 mil­lion) in com­pen­sa­tion.

In the 223-page rul­ing, ob­tained by Guardian Me­dia, the ar­bi­tra­tion pan­el ruled that Nid­co was wrong to have ter­mi­nat­ed the con­tract based on the two main grounds it claimed.

In the ar­bi­tra­tion pro­ceed­ings, Nid­co claimed that Con­struc­to­ra OAS ef­fec­tive­ly aban­doned the project in late 2015 af­ter it slowed down work, dis­missed most of its staff and be­came in­sol­vent by let­ting debt ac­cu­mu­late to sup­pli­ers and con­tracts.

The com­pa­ny de­nied any wrong­do­ing, as it claimed that the is­sues raised by Nid­co were due to the fact that it (Nid­co) failed to make a ma­jor in­ter­im pay­ment un­der the con­tract. It claimed that at the time of the ter­mi­na­tion, it had in­ject­ed a fur­ther US$31 mil­lion in­to the project and had re­newed its per­for­mance and re­ten­tion bonds.

In up­hold­ing Con­struc­to­ra OAS’ case, the ar­bi­tra­tion tri­bunal or­dered that it be paid US$127,072,326 in dam­ages mi­nus the US$706,426.70 off­set grant­ed to Nid­co.

The dam­ages rep­re­sent the com­pa­ny’s claims for per­for­mance and re­ten­tion se­cu­ri­ties, a se­ries of un­paid in­ter­im pay­ment cer­tifi­cates (IPCs), ma­te­ri­als in stock, tem­po­rary works and con­tract­ing equip­ment.

The com­pen­sa­tion to be paid to the com­pa­ny can still rise, as the ar­bi­tra­tion pan­el re­quest­ed fur­ther sub­mis­sions from the par­ties on whether the dam­ages award­ed could at­tract in­ter­est.

The tri­bunal al­so has to con­sid­er the com­pa­ny’s claim for ad­di­tion­al dam­ages on the grounds that Nid­co was over­paid when it seized the bonds in con­nec­tion with the ad­vance pay­ment de­duc­tions. It stat­ed that it de­nied all oth­er claims, coun­ter­claims, claims for off­sets and de­fences.

The out­come of the ar­bi­tra­tion pro­ceed­ings was raised by Op­po­si­tion MP Dr Roodal Mooni­lal last week, while he was mak­ing his con­tri­bu­tion to a mo­tion to adopt a re­port of the Stand­ing Fi­nance Com­mit­tee in Par­lia­ment.

Mooni­lal claimed that the Gov­ern­ment was de­lib­er­ate­ly con­ceal­ing the de­vel­op­ment from the pub­lic.

In ear­ly 2011, Con­struc­to­ra OAS was award­ed the con­tract for the project, which was then es­ti­mat­ed to cost ap­prox­i­mate­ly $5.3 bil­lion. Af­ter the con­tract was ter­mi­nat­ed, the project was put on hold for sev­er­al years be­fore be­ing restart­ed with lo­cal con­trac­tors.

In Au­gust last year, Nid­co an­nounced that the project was three-quar­ters com­plete. How­ev­er, sev­er­al months lat­er, a seg­ment of the high­way at Mos­qui­to Creek col­lapsed.

In Ju­ly 2019, Cab­i­net an­nounced a Com­mis­sion of En­quiry to in­ves­ti­gate as­pects of the project, in­clud­ing whether a min­is­te­r­i­al over­sight com­mit­tee un­der the for­mer Peo­ple’s Part­ner­ship gov­ern­ment had ful­filled its man­date.

The com­mit­tee was head­ed by for­mer prime min­is­ter and cur­rent Op­po­si­tion leader Kam­la Per­sad-Bisses­sar and in­clud­ed sev­er­al for­mer mem­bers of her Cab­i­net, in­clud­ing Mooni­lal.

The com­mis­sion, which is yet to start its work, is to be chaired by re­tired judge Se­bas­t­ian Ven­tour, with at­tor­ney Gre­go­ry Delzin serv­ing as com­mis­sion­er.

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