School project still in limbo

| 23/09/2009

(CNS): Although negotiations with general contract Tom Jones International (TJI) reportedly continued on Tuesday regarding the failure by government to meet this month’s bill for the construction of the new John Gray High School, no resolution has yet been reached, CNS has learned. One person close to the subcontractors involved described the situation as a “decision free environment” and lamented the lack of progress. Other sources described the situation as both amicable and hopeful. It is understood, however, that the outstanding sum which government has said it cannot pay is less than $2 million. (Photo courtesy of News 27)

(CNS): Although negotiations with general contract Tom Jones International (TJI) reportedly continued on Tuesday regarding the failure by government to meet this month’s bill for the construction of the new John Gray High School, no resolution has yet been reached, CNS has learned. One person close to the subcontractors involved described the situation as a “decision free environment” and lamented the lack of progress. Other sources described the situation as both amicable and hopeful. It is understood, however, that the outstanding sum which government has said it cannot pay is less than $2 million. (Photo courtesy of News 27)

Although neither the education ministry nor Hunter Jones of TJI could be contacted throughout Tuesday despite numerous attempts, CNS was able to speak with a number of other people close to the school projects, who noted that unless a decision  was made soon work would grind to a halt on the site by the end of this week, with significant repercussions.

Others had more optimistic reports, stating that there was every indication the problem would be resolved before workers had to be laid off and construction halted.

The fundamental problem is that government appears to have been engaging in what one source described as “robbing Peter to pay Paul”, and although McAlpine Ltd, the general contractor on the new government administration building was paid and TJI was also paid for last month’s work at the Clifton hunter site in Frank Sound, the approximate $2 million payment for the contractor’s bill at the John Gray site was not met for last month. With September’s bill now looming as well, the contractor has said he cannot continue to work without payment as he in turn cannot meet his obligation and will stop the project unless government meets its obligation.

One local contractor involved in the project has explained that the momentum of a major construction project such as this is very difficult to stop and stalling work even for just a few days can take weeks to restart.  The non-payment has a rapid effect too, he stated, as contractors don’t pay sub-contractors who can’t pay workers and suppliers, which in turn can impact the credit rating of all those along the chain, including the major sub-contractors.

Moreover, if the general contractor cannot meet his payments hundreds of workers employed by a number of other sub-contractors will be laid off, which will then have a further detrimental impact on Cayman’s domestic economy. With no work, labourers will not be able to spend, which will in turn negatively affect retailers and service providers.

However, CNS understands that government could pay the contractor by accessing the reserve funds, which according to statistics given by Financial Secretary Kenneth Jefferson on 28 August, stood at $76.1 million. Accessing the reserves does not require permission from the UK but merely approval by the Legislative Assembly.

While the present government has severely criticised the previous administration for what it has described as financial mismanagement, Leader of the Opposition Kurt Tibbetts said on 8 September that during the PPM’s term the country’s reserves were built to the highest level ever. “Even the present government has had to concede that reserves stood at more than $90M at 30 June,” he said, noting that these were more than sufficient to cover the operational deficit for the 2008/09 fiscal year.

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  1. Anonymous says:

    This scenario sounds very fishy to me. Could it be that the UDP wants to extract government from this contract, get rid of Tom Jones and its subcontractors and replace them with someone else? Remember the Ritz-Carlton when Fluor Daniel were booted out?

    If indeed this is the agenda, shockwaves will ripple through the community as those locals who are directly and indirectly associated with this project will see their pay packets dry up quicker than a puddle in the road after the summer rain.

  2. Anonymous says:

    No they were catering to McKeeva’s status lottery recipients. I’m sure you’ve heard of that 2003 fiasco…….or do u wish to conveniently forget that ???

  3. MDU says:

    Any truth that Quick Cash was just robbed??

  4. Anonymous says:

    I hope that the government and the people of the Cayman Islands have learnt from this!   As what I have seen building up in NS it seems we wont need a new school for another 100,000 years!!!!!    What population are they preparing for anyway?!?!?!   or are they preparing for another status lottery?!?!?!   Makes ya think doesn’t it?

     

    BTW, Good Morning Cayman!  =)

  5. real deal says:

    We understand that King Jong Kut was told by the FCO yet he failed to listen this sure sounds familar him and his bunch of incompetent  big land deal gang