Filling GAB could save $2M

| 06/07/2012

goab34.jpg(CNS): One of many shortcomings identified in the latest report by the auditor general, the failure to establish proper business needs on major projects before embarking on them has been extremely costly. The new government administration building is, according to Alastair Swarbrick’s latest findings, only 60% occupied but could be saving the public purse some CI$2 million a year in leases if government entities actually move into it. Although government entities such as CIMA and MACI had signed on to move into the building and had offices designed for them, the failure to establish a proper process before the project started to assess who really should, or needed to, utilize the building has resulted in wasted space.

Despite having 100s of square feet unoccupied in the building, government departments and agencies continue to lease accommodation all over the George Town area. Swarbrick stated that if the new energy efficient building was properly utilized there could be significant savings to the public purse as he urged government to use the building.

Speaking at a press briefing Thursday about his latest report, "Management of Major Capital Projects", he said someone needed to take the lead and fill the building.

“Government could save more than $2 million per year if it used the space effectively and reduced the existing commercial leases," he said. “It is a highly efficient building.”

At the end of the audit, the General Administration Building housed about 580 staff. The problems stemmed from the failure at the outset to properly define government’s needs in a strategic business case and no one officially signed for the responsibility at the beginning to see which government departments would move in, Swarbrick explained.

The Cayman Islands Monetary Authority (CIMA) and the Maritime Authority of the Cayman Islands (MACI) had both signed on to move to the new building but a decision was made later that they would not do so after all. Swarbrick said it was unclear why the decision was made so much later but there was no coordination at the beginning with the various groups involved in the development of the government building. Throughout the life of the project, which entities would and which would not move in constantly changed.

The auditor stated that the building should have been designed based on a proper business plan that properly defined and set out the exact needs of government, which may have resulted in a smaller building and some savings.

“There was a lack of clarity over the responsibility for identifying which government agencies were to be tenants in the new building,” the report states. “We could not identify a Government ministry that had the overall responsibility for determining the Government’s accommodation policies and needs.”

They pointed out that the relevant ministry and its steering committee did not have the mandate to determine which agencies would eventually be housed in the building and that was left to the project management team.

“Numerous lists of potential tenants were prepared, considered by the steering committee, and then presented for approval by Cabinet. However, for various reasons, some of which are not clear to us, the lists continued to change from the date of Cabinet approval to proceed with the project, throughout the development of the request for proposals, after the construction began, and even after construction was substantially complete,” the report says.

The constant changes pushed up the cost of the building and led to delays in the project leaving the building under-utilized.

“While Cabinet was warned about the impact that changes could have in terms of additional costs and project delays, the changes continued nonetheless. The ineffectiveness of the reporting relationships to ensure that there was better control over project governance was clearly documented in the files we examined. These documents reflected a situation where some agencies refused to relocate to the GAB and others made unreasonable demands for changes to the design even into the construction period."

Swarbrick noted, however, that the foresight of the project manager's proposal that the building be designed for flexible use ensured that the extent of that cost has been minimized.

Although there are problems over government’s use of the GAB, Swarbrick said that the CTC process was followed properly and the project was well managed and could be used as a standard for future projects.

“Government assigned a well-qualified and experienced project manager … who employed industry accepted project management practices that should be considered as standard practice for the management of all future major capital projects,” he said, adding that it was the manager who in the end saved money for the public purse by overcoming the significant challenges and changes associated with the project.

By contrast, the report is considerably more damning regarding the management of the three high school projects and points to serious losses to the public purse.

Check back to CNS next week for more on Swarbrick's latest revelations.

See full report below.

Category: Local News

Comments (29)

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  1. Anonymous says:

    Well done Jim.  On time and under budget.  Credit where credit is due.

  2. Anonymous says:

    So the plan is to save Government $22M by moving all those departments that were paying rent into the GAB Building…Sounds good, but now what happens to all those places that were rented to Gevernment before?

    All these places get shuttered and put up for rent along with the thousands of places already available for rent with no chance of every getting rented again.

    Surrounding businesses such as restaurants shut because the government tenants are gone so they close too..People become unemployed and crime continues to grow.

    Sounds like a PPM plan to me…

     

    • Anonymous says:

      Yes, my friend well said we need to look at the whole economy.

      Why would any right thinking person attempt to put the whole of government in one large building anyway.

      In these days it seems to be quite risky to do so. Surely this could not have been the plan

       

      • Anonymous says:

        Obviously there are government departments and authorities which would not properly belong in that building, e.g. dept of agriculture, but there is no reason why the majority of them should not be housed there.

        Every landlord has to accept the risk that his tenant may give notice and opt for more affordable accommodations. That is the free market.  

  3. Anonymous says:

    As yes. Contracts that leave the Government building half empty and government paying out millions a year for outside rent. I guess somebody found a real estate consultant to work that one out.

  4. Anon says:

    Everyone knows that kick backs are a way of life here. Backdoor deals, and skimming are par for the course. I hope the auditor can take the heat and stand up for those of us who chose to be honest.

  5. Anonymous says:

    Following on from an earlier posting it might be interesting to find out exactly who owns the properties currenty occupied by CIMA and MACI. I know the MACI five-year lease came in well over $500K per annum so there must be appropriate tendering records. 

    • Anonymous says:

      XXXX Another statutory authority head finds it convenient to nip next door for his alcoholic drink when the pressures of work get plane too much to handle without a little drop of the necessary. We civil servants know what is and has been going on but who can we express our frustrations to except CNS and then some people will say we are not telling the truth.

  6. Beanie Baby says:

    Can we rent out Mac's office?  It is usually empty and when it is occupied it is not put to valuable use.

  7. Anonymous says:

    This is why the PPM build it in the first place. To save Government millions in rent for years to come. But the ignorance runs deep in the management offices at Government. Department heads who have no sense but big egos and political affiliations will put a spoke in the wheel of all good intentions.

    It's not the Civil Servants on a whole… its the Departmental Heads who are lacking in accountability, foresight and qualification.

    The Heads should roll (pardon the pun) for failure to comply.

  8. A long term resident says:

    CIMA may have valid reasons for not moving in 

  9. On the Boil says:

    Just another expample of inept management in CI Government and civil service. We need to look no further then our government and civil service to know why Cayman is in the state it is in. Imagine if it was run efficiently how much money would be available to help those Caymanians without jobs retrain and get new skills, or to provide some seed funding for bsuinesses. It makes my blood boil!!! 

  10. Anonymous says:

    Did anyone bother to checkthe following – for those departments that signed new five year leases with their private landlords how many of those landlords are UDP supporters – I think the numbers will surprise you – and as for CIMA -XXXX – despite the fact that government spent a significant amount of money to ensure that CIMA's building requirements were met.

  11. datisme says:

    Headlines should read "Doing things the smart and right way could save 50 million a year."  The downside is the immediate rise in unemployment.

    • Anonymousey says:

      "The down side is rise in unemployement ". Yes maybee tough time ahead but we can't have our cake and eat it too. Don't worry however everything will balance itself but we have to stop all this as it's gone tooo far now. And maybe we just have to replace those who sit on their fat cushion, be on their personnal in front of clients and yes in Government also. You didn't know ? Many of us are willing to work very hard to replace them.

  12. Anonymous says:

    It’s not our way

  13. Naya Boy says:

    How dare you utter those words "Save money" on this forum those are cuss words in CI Government. We all know why some entities do not want to go into the GOAB building because that would mean "Certain special People" will be unable to Do as they feel like without the prying eyes of other jealous government employees watching them running their many personal businesses they have, also coming & leaving work when they feel like.How dare they even subject us to that level of scrutiny and question our work ethics. Plus we already had a little talk to the minister and he understand how things go!   Remember now folks Government those in society not bound by the rules or the Law.

  14. anonymous says:

    Maybe we should consider leasing out the unsed space. Dart and China Harbour may want some of the spoce so they can be close to Mac to assure he performs their wishes, making sure they value for their allowance dollars.

  15. Anonymous says:

    Thank you Mr. Swarbrick…and Mr. Duguay for your professional work!

    Concerning under-utilization of the GAB…shouldn't the Governor, Dep Governor and current Govt Ministers (including the premier) simply DIRECT those Departments, Authorities, other Govt. owned Companies to simply MOVE into the GAB at the end of their current leases?

    Subtract the difference/savings from their Budgets!

    Especially given the current Economic Crisis.

  16. Anonymous says:

    Now if the AG would have stated "$2 million could be made available for more partying and more luxury travel and more private servants and more for the cronies" then something might be done. We need the AG to speak directly to the interests of the politicians not refer to something like saving the country that is of no interest to them.

  17. Anonymous says:

    Who was responsible for making sure the building would be filled by Government staff, whether CIMA, MACI, or other depts? Wasn't this the responsibility of Julie's Ministry? So, was it Julie's responsibility or the Chief Officer's, what's his name again?

     

    Man, that guy seems to be at the heart of quite a few major let downs for this Government.

    • Anonymous says:

      Can't remember his name either 10:36 but he sent out a long email to the civil service when he retired which basically pointed out that he had done everything worthwhile that was done in Cayman in the last 40 years, including the GAB, which he ran (badly) as if he owned it.

  18. Anonymous says:

    another great day for cig and the civil service….

  19. Anonymousey says:

    Goes to show you that some dept. don't want to be there, at this moment. And it could be for very valid reasons or at least an explanation as to why ? Money wasted that the people are paying for. In't that called … hum TRANSPARENCY ? Let us know why the Passport Office situated right across the street paying rent ? just to name one.

  20. Anonymous says:

    The relationship between government department heads and their commercial landlords could be enlightening in some cases where departments have signed new 5 year leases.

     

    Just wondering.

  21. Donkey Face #45239 says:

    So the article is suggesting the government isn’t really good at managing stuff, like the government and stuff? Hard to believe… Signed, Donkey Face #45239