Gail Alexan­der

There will now be a Com­mis­sion of En­quiry probe in­to OAS Con­stru­to­ra S.A.’s con­tract for the Point Fortin High­way and who au­tho­rised its amend­ment in 2015 to OAS’s ben­e­fit.

The CoE in­to the con­struc­tion of the Point Fortin High­way, head­ed by re­tired Jus­tice Se­bastien Ven­tor, is now be­ing ex­pand­ed to in­clude these and oth­er ques­tions in­to the re­moval of Clause 15 2 (e) from the con­tract then held by Con­stru­to­ra OAS for the high­way project.

Prime Min­is­ter Dr Kei­th Row­ley an­nounced this in a 24-page state­ment to Par­lia­ment yes­ter­day. He not­ed the re­cent de­ci­sion in a Lon­don Court of In­ter­na­tion­al Ar­bi­tra­tion that the Na­tion­al De­vel­op­ment Com­pa­ny Lim­it­ed (NID­CO) was wrong to ter­mi­nate OAS in Ju­ly 2016 and that NID­CO couldn’t re­ly on re­moval of Clause 15.2(e) from the con­tract.

Ar­bi­tra­tors award­ed OAS $852 mil­lion but NID­CO is chal­leng­ing the award.

Row­ley said it was es­sen­tial to re­cap cer­tain mat­ters for the pop­u­la­tion to ap­pre­ci­ate how detri­men­tal cer­tain spe­cif­ic de­ci­sions which were tak­en lead­ing up to Sep­tem­ber 4th, 2015, have been for the T&T pub­lic “... and how on the oth­er hand, the same gen­er­ous de­ci­sions have con­sis­tent­ly favoured OAS.”

“This (high­way) project is the sin­gle largest con­tract ever en­tered in­to by the state of T&T - 5.2 bil­lion dol­lars. That alone de­mands that the ac­cu­rate, undis­put­ed facts are placed be­fore the peo­ple,” he said.

Row­ley said a pre­vi­ous April 2016 state­ment on the OAS is­sue re­vealed Gov­ern­ment had dis­cov­ered an amend­ment to OAS’ con­tract “that was se­cret­ly ex­e­cut­ed by the UNC on Sep­tem­ber 4th, 2015, the last work­ing day be­fore the Sep­tem­ber 7th, 2015, Gen­er­al Elec­tion, 72 hours be­fore the UNC was vot­ed out.”

“The amend­ment, an al­ter­ation to the con­tract, amongst oth­er things, re­moved a crit­i­cal ter­mi­na­tion clause from the stan­dard FIDIC Yel­low Book con­tract un­der which the project was be­ing ex­e­cut­ed. This re­moval of clause 15.2(e) is what has ex­posed the peo­ple to a huge po­ten­tial li­a­bil­i­ty to OAS,” the PM said.

“What it did was ef­fec­tive­ly shift own­er­ship and con­trol of in­sur­ance bond mon­ey, be­long­ing to the gov­ern­ment, away from NID­CO and in­to the con­trac­tors’ hands.”

Row­ley point­ed to a se­quence of events sup­port­ing Gov­ern­ment’s con­cerns.

He added, “It is a fact that the re­moval of that spe­cif­ic ter­mi­na­tion clause from the con­tract be­tween NID­CO and OAS on Sep­tem­ber 4, 2015, led to NID­CO’s loss of con­trol and sub­se­quent­ly loss of the ar­bi­tra­tion.”

He said this has trig­gered ques­tions:

1) By what process, ad­vice and doc­u­men­ta­tion was it de­ter­mined that the bil­lion-dol­lar con­tract must be amend­ed to grant an $852mil­lion waiv­er to OAS?

2) Who au­tho­rised the amend­ment of the con­tract?

3) What was the spe­cif­ic pur­pose and ben­e­fit to be had?

4) Who ac­tu­al­ly car­ried out the in­struc­tions?

5) What was the role of the Min­istry of Works and Trans­port, the board of NID­CO, the con­sul­tant and the man­age­ment in ef­fect­ing the amend­ment and its con­se­quen­tial waiv­er?

“It is against this back­ground that Cab­i­net has asked the At­tor­ney Gen­er­al to ex­am­ine and amend the terms of ref­er­ence of the Se­bas­t­ian Ven­tour En­quiry, with a view to adding to that ex­am­i­na­tion the spe­cif­ic con­cerns raised here to­day and find the an­swers to these trou­bling ques­tions,” he added

The Ven­tour En­quiry - com­pris­ing Jus­tice Ven­tour and at­tor­ney Gre­go­ry Delzin - was ap­point­ed in Ju­ly 2019 to ex­am­ine all as­pects of the man­age­ment of the land ac­qui­si­tion process by NID­CO for the high­way con­struc­tion.

Row­ley said the re­moval of the clause shouldn’t have been done af­ter OAS, on March 31, 2015, filed a pe­ti­tion for ju­di­cial re­or­gan­i­sa­tion in Brazil, seek­ing bank­rupt­cy pro­tec­tion. He said that should have been used to ter­mi­nate OAS and pro­tect T&T’s mon­ey un­der the bonds that were re­quired un­der the con­tract for such even­tu­al­i­ty.

He not­ed that the ar­bi­tra­tion tri­bunal had “no doubt that the act of ju­di­cial re­or­gan­i­sa­tion trig­gered one or more of the el­e­ments of Clause 15.2(e)...,” con­firm­ing that this was a course of ac­tion open to the UNC gov­ern­ment in March 2015.

But on Sep­tem­ber 4, 2015, the then-UNC gov­ern­ment, “se­cret­ly en­tered in­to a writ­ten agree­ment with OAS called Con­tract Ad­den­dum No.2,” sur­ren­der­ing its right and abil­i­ty to ter­mi­nate the con­tract on the grounds of OAS be­ing un­der ju­di­cial re­or­gan­i­sa­tion - a move that on­ly favoured OAS, Row­ley added.

He said cit­i­zens are be­ing made to give back the court-ap­proved $852m which the con­trac­tor could on­ly have claimed “... be­cause some per­son/s in the last UNC ad­min­is­tra­tion took the per­vert­ed de­ci­sion to amend a con­tract to once again favour a con­trac­tor at the ex­pense of the pub­lic in­ter­est.”

“The mon­ey be­ing tak­en back by the ar­bi­tra­tion was not lost by the ter­mi­na­tion of the con­tract, it was giv­en up by the loss of the clause that was re­moved. We had it but the UNC vol­un­tar­i­ly gave it up to the con­trac­tor. This PNM Gov­ern­ment tried to get it back. We suc­ceed­ed for a while but now it ap­pears that it might be lost per­ma­nent­ly,” he said.

“No proof of Car­son Charles claim”

Prime Min­is­ter Row­ley al­so said there was no way to ver­i­fy the claim made by for­mer NID­CO boss Car­son Charles on the con­tract mat­ter.

“De­spite the re­cent as­ser­tion of Dr Car­son Charles, the then-CEO of NID­CO, that the re­moval of clause 15.2(e) was done on the ad­vice of NID­CO’s en­gi­neer, no doc­u­ment has been found any­where in NID­CO to sup­port such a be­lat­ed con­tention. To date, no doc­u­ment has been found pro­vid­ing any ad­vice that clause 15.2(e) should have been re­moved. No such an­nounce­ment has ever been made by any of the ac­tors en­gaged in this trav­es­ty.”

He not­ed that af­ter OAS in­formed NID­CO it was fil­ing for ju­di­cial re­or­gan­i­sa­tion, Charles wrote OAS (April 28, 2015) stat­ing that OAS’ ac­tion was suf­fi­cient for NID­CO to ex­er­cise its “rights un­der Clause 15.2(e) of the Con­di­tions of Con­tract to ter­mi­nate the con­tract with im­me­di­ate ef­fect …”

Row­ley added, “In­stead of do­ing that, NID­CO then mys­te­ri­ous­ly and se­cret­ly pro­ceed­ed to re­move the of­fend­ing, in­con­ve­nient clause. Why did NID­CO weak­en its own po­si­tion by re­mov­ing a clause that it knew per­mit­ted it to eas­i­ly ter­mi­nate OAS?” he asked.

“Un­der the FIDIC con­tract, the UNC gov­ern­ment could have/should have, im­me­di­ate­ly in­voked Clause 15.2(e) and ter­mi­nat­ed OAS on the ground that it was sub­ject to ju­di­cial re­or­gan­i­sa­tion.

“Nonethe­less, the stage was de­lib­er­ate­ly set for this, to give the con­trac­tor a fight­ing chance, know­ing that no in­com­ing gov­ern­ment could have sat on its hands fac­ing this stalled bil­lion-dol­lar project and not move, at some stage, to ter­mi­nate the con­tract in or­der to restart the project.”

NID­CO, un­der the PNM Gov­ern­ment, ter­mi­nat­ed OAS on Ju­ly 6, 2016, based on the ad­vice of the en­gi­neer that OAS was un­able to pro­ceed with the works re­quired by the con­tract.

There will now be a Com­mis­sion of En­quiry probe in­to OAS Con­stru­to­ra S.A.’s con­tract for the Point Fortin High­way and who au­tho­rised its amend­ment in 2015 to OAS’s ben­e­fit.

The CoE in­to the con­struc­tion of the Point Fortin High­way, head­ed by re­tired Jus­tice Se­bastien Ven­tor, is now be­ing ex­pand­ed to in­clude these and oth­er ques­tions in­to the re­moval of Clause 15 2 (e) from the con­tract then held by Con­stru­to­ra OAS for the high­way project.

Prime Min­is­ter Dr Kei­th Row­ley an­nounced this in a 24-page state­ment to Par­lia­ment yes­ter­day. He not­ed the re­cent de­ci­sion in a Lon­don Court of In­ter­na­tion­al Ar­bi­tra­tion that the Na­tion­al De­vel­op­ment Com­pa­ny Lim­it­ed (NID­CO) was wrong to ter­mi­nate OAS in Ju­ly 2016 and that NID­CO couldn’t re­ly on re­moval of Clause 15.2(e) from the con­tract.

Ar­bi­tra­tors award­ed OAS $852 mil­lion but NID­CO is chal­leng­ing the award.

Row­ley said it was es­sen­tial to re­cap cer­tain mat­ters for the pop­u­la­tion to ap­pre­ci­ate how detri­men­tal cer­tain spe­cif­ic de­ci­sions which were tak­en lead­ing up to Sep­tem­ber 4th, 2015, have been for the T&T pub­lic “... and how on the oth­er hand, the same gen­er­ous de­ci­sions have con­sis­tent­ly favoured OAS.”

“This (high­way) project is the sin­gle largest con­tract ever en­tered in­to by the state of T&T - 5.2 bil­lion dol­lars. That alone de­mands that the ac­cu­rate, undis­put­ed facts are placed be­fore the peo­ple,” he said.

Row­ley said a pre­vi­ous April 2016 state­ment on the OAS is­sue re­vealed Gov­ern­ment had dis­cov­ered an amend­ment to OAS’ con­tract “that was se­cret­ly ex­e­cut­ed by the UNC on Sep­tem­ber 4th, 2015, the last work­ing day be­fore the Sep­tem­ber 7th, 2015, Gen­er­al Elec­tion, 72 hours be­fore the UNC was vot­ed out.”

“The amend­ment, an al­ter­ation to the con­tract, amongst oth­er things, re­moved a crit­i­cal ter­mi­na­tion clause from the stan­dard FIDIC Yel­low Book con­tract un­der which the project was be­ing ex­e­cut­ed. This re­moval of clause 15.2(e) is what has ex­posed the peo­ple to a huge po­ten­tial li­a­bil­i­ty to OAS,” the PM said.

“What it did was ef­fec­tive­ly shift own­er­ship and con­trol of in­sur­ance bond mon­ey, be­long­ing to the gov­ern­ment, away from NID­CO and in­to the con­trac­tors’ hands.”

Row­ley point­ed to a se­quence of events sup­port­ing Gov­ern­ment’s con­cerns.

He added, “It is a fact that the re­moval of that spe­cif­ic ter­mi­na­tion clause from the con­tract be­tween NID­CO and OAS on Sep­tem­ber 4, 2015, led to NID­CO’s loss of con­trol and sub­se­quent­ly loss of the ar­bi­tra­tion.”

He said this has trig­gered ques­tions:

1) By what process, ad­vice and doc­u­men­ta­tion was it de­ter­mined that the bil­lion-dol­lar con­tract must be amend­ed to grant an $852mil­lion waiv­er to OAS?

2) Who au­tho­rised the amend­ment of the con­tract?

3) What was the spe­cif­ic pur­pose and ben­e­fit to be had?

4) Who ac­tu­al­ly car­ried out the in­struc­tions?

5) What was the role of the Min­istry of Works and Trans­port, the board of NID­CO, the con­sul­tant and the man­age­ment in ef­fect­ing the amend­ment and its con­se­quen­tial waiv­er?

“It is against this back­ground that Cab­i­net has asked the At­tor­ney Gen­er­al to ex­am­ine and amend the terms of ref­er­ence of the Se­bas­t­ian Ven­tour En­quiry, with a view to adding to that ex­am­i­na­tion the spe­cif­ic con­cerns raised here to­day and find the an­swers to these trou­bling ques­tions,” he added

The Ven­tour En­quiry—com­pris­ing Jus­tice Ven­tour and at­tor­ney Gre­go­ry Delzin—was ap­point­ed in Ju­ly 2019 to ex­am­ine all as­pects of the man­age­ment of the land ac­qui­si­tion process by NID­CO for the high­way con­struc­tion.

Row­ley said the re­moval of the clause shouldn’t have been done af­ter OAS, on March 31, 2015, filed a pe­ti­tion for ju­di­cial re­or­gan­i­sa­tion in Brazil, seek­ing bank­rupt­cy pro­tec­tion.

He said that should have been used to ter­mi­nate OAS and pro­tect T&T’s mon­ey un­der the bonds that were re­quired un­der the con­tract for such even­tu­al­i­ty.

He not­ed that the ar­bi­tra­tion tri­bunal had “no doubt that the act of ju­di­cial re­or­gan­i­sa­tion trig­gered one or more of the el­e­ments of Clause 15.2(e)...,” con­firm­ing that this was a course of ac­tion open to the UNC gov­ern­ment in March 2015.

But on Sep­tem­ber 4, 2015, the then-UNC gov­ern­ment, “se­cret­ly en­tered in­to a writ­ten agree­ment with OAS called Con­tract Ad­den­dum No.2,” sur­ren­der­ing its right and abil­i­ty to ter­mi­nate the con­tract on the grounds of OAS be­ing un­der ju­di­cial re­or­gan­i­sa­tion - a move that on­ly favoured OAS, Row­ley added.

He said cit­i­zens are be­ing made to give back the court-ap­proved $852m which the con­trac­tor could on­ly have claimed “... be­cause some per­son/s in the last UNC ad­min­is­tra­tion took the per­vert­ed de­ci­sion to amend a con­tract to once again favour a con­trac­tor at the ex­pense of the pub­lic in­ter­est.”

“The mon­ey be­ing tak­en back by the ar­bi­tra­tion was not lost by the ter­mi­na­tion of the con­tract, it was giv­en up by the loss of the clause that was re­moved. We had it but the UNC vol­un­tar­i­ly gave it up to the con­trac­tor. This PNM Gov­ern­ment tried to get it back. We suc­ceed­ed for a while but now it ap­pears that it might be lost per­ma­nent­ly,” he said.

• Pri­or to the ac­tu­al con­tract be­ing ne­go­ti­at­ed and award­ed to OAS, “cer­tain pe­cu­liar de­vel­op­ments took place.”

• A few weeks af­ter the UNC en­tered of­fice and met this project await­ing award of a con­tract for con­tin­u­a­tion of con­struc­tion, an in­ter­est­ed group of known high lev­el Brazil­ian ex­ec­u­tives of OAS flew by Das­sault pri­vate jet, from Rio de Janeiro Brazil to Dur­ban in South Africa, in pur­suit of the said con­tract.

• They then trav­elled by car to Jo­han­nes­burg for the sin­gu­lar pur­pose of meet­ing a mem­ber of the Cab­i­net, “a Min­is­ter re­spon­si­ble and in­volved in the de­ci­sion on this project.”

• This se­cret meet­ing be­tween the UNC Min­is­ter re­spon­si­ble for the project and the OAS took place at the Michael An­ge­lo Tow­ers in Jo­han­nes­burg dur­ing the FI­FA World Cup in South Africa.

• No mem­ber of the UNC gov­ern­ment has ever ac­knowl­edged this meet­ing oc­curred, nor has any ever at­tempt­ed to ex­plain the pur­pose/out­come of this trans-At­lantic se­cret meet­ing on the eve of an award of this mul­ti-bil­lion con­tract which was hur­ried­ly wrapped up here in Trinidad, af­ter the World Cup.

• On March 4th, 2011, the then-gov­ern­ment, through NID­CO, award­ed a De­sign-Build Con­tract to OAS for ap­prox­i­mate­ly $5.2 bil­lion - $1.6 bil­lion more than the en­gi­neer’s es­ti­mate. This was the first sal­vo against the tax­pay­ers; the award of an in­flat­ed con­tract to OAS.

• This con­tract be­tween NID­CO and OAS was gov­erned by the in­ter­na­tion­al­ly-recog­nised FIDIC Yel­low Book. It is ac­cept­ed a par­ty should on­ly, with very good ex­cep­tion­al rea­son, amend the stan­dard terms/con­di­tions of FIDIC. How­ev­er, the then-UNC gov­ern­ment im­me­di­ate­ly changed the stan­dard ad­vance pay­ment term from 10 per cent of the con­tract to 20 per cent, which re­sult­ed in OAS, in­stead of re­ceiv­ing TTD$428 mil­lion, as the al­low­able mo­bil­i­sa­tion ad­vance, it was fa­cil­i­tat­ed with an in­flat­ed ad­vance of ap­prox­i­mate­ly TT$856 mil­lion. Again, a de­ci­sion tak­en that cu­ri­ous­ly favoured OAS and failed to pro­tect tax­pay­ers.

• All pay­ments made to OAS for ac­tiv­i­ties un­der the Let­ter of In­tent, which to­talled TTD$236.4 mil­lion, should have been de­duct­ed from the Ad­vance Pay­ment. How­ev­er, these sums were not de­duct­ed. So, even be­fore con­struc­tion be­gan, the for­mer gov­ern­ment loose­ly fa­cil­i­tat­ed OAS with over $1 bil­lion of tax­pay­ers’ monies.

• Rather than util­is­ing low in­ter­est rate fund­ing from a mul­ti­lat­er­al lend­ing agency, such as the IDB, for this mul­ti-bil­lion dol­lar in­fra­struc­ture project, the for­mer gov­ern­ment paid OAS, and oth­ers, via cash trans­fers from the Fi­nance Min­istry up to 2014, strain­ing T&T’s avail­able cash.

• Had NID­CO ex­er­cised this right to ter­mi­nate the con­tract on the grounds of OAS be­ing un­der ju­di­cial re­or­gan­i­sa­tion, it would al­so have been able to im­me­di­ate­ly call up­on all per­for­mance bonds and let­ters of cred­it with­out re­course by OAS. De­spite this po­si­tion of in-built strength, pro­tect­ed by the con­tract, the UNC gov­ern­ment, through NID­CO, chose dur­ing March to Sep­tem­ber 2015, to re­duce OAS’ scope of works, keep the price of the con­tract firm notwith­stand­ing and re­move clause 15.2(e) to al­low the con­trac­tor to claim hun­dreds of mil­lions of dol­lars of in­sur­ance mon­ey meant to pro­tect tax­pay­ers.

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