McLaughlin refutes overruns

| 25/06/2009

(CNS): Former Education Minister Alden McLaughlin has said that the claims being made for overruns on the two new schools are not as a result of any major changes to plans but an attempt to get more money for the project by the developer, Tom Jones International (TJI). He said the $17 million figure that has been suggested is way beyond any legitimate claim that could be made based on changes, and that before leaving office his ministry had notified the attorney general and a legal team had been engaged to look into the matter.

“I very much hope that the new government is not going to concede just because the developer makes a claim,” McLaughlin said.”Up until I left office matters were still under discussion and no concessions had been made about the claims as we believed that, by and large, they were not entirely genuine. We believed that the developer was taking advantage of the election to get more money, thinking government would give in to any demand.”

McLaughlin told CNS that, after his ministry had taken the concerns about the claims to the attorney general, a law firm was contacted. He said that the developer had experienced cash flow problems, which the government had helped with. He had also experienced troubles with his own sub-contractors and there had been considerable disruption in the run-up to the election, with the developer threatening to stop work.

He said thatthe figure quoted by Leader of Government Business McKeeva Bush in a statement earlier this month of $17 million was far, far too high to account for any of the changes that had taken place. Hunter Jones of TJI told CNS that $17 million was the high end but it was possible that overruns would be that much. However, McLaughlin maintained, “No major changes were asked for that could justify the overruns that are now reportedly being claimed.”

He said the schools contracts were fixed and there should be no major differences in the price at the end of the project than stated in the contract. He said if there were any claims for more money then they must be properly addressed and it would be wrong of the leader of government business to indicate he would pay without proper investigation.

“He should not signal that he will give TJI more money just because he asks,” McLaughlin told CNS. “If there are claims then they must be made the proper way, where they will be arbitrated and determined if anything should be paid.

A number of people in the construction industry said when the contracts were awarded that there would likely be problems along the way as the contracts awarded to TJI were in one case over 30% lower than the next lowest bid submitted. Even though the former minster was criticised about the cost of the new schools, many said the contract was a very good deal for government but it would be unlikely that the contractor would be able to succeed given the low bid.

Jones said last week that the current claims were as a direct result of changes to the plans and have nothing to do with any problems with the estimated costs in the bid that won the firm the contract. However, he was unable to offer the details when he spoke to CNS as to what changes could warrant as much as $17million.

The two projects, which include the construction of the Clifford Hunter School in Frank Sound and the redevelopment of a new school at the John Gray campus, were contracted to total around $110M for both schools.

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  1. Anonymous says:

    Thanks Alan Roffy for setting some records straight, Like yourself I too have a company on the site and we too have over 65 Caymanians employeed. So please remember not all you read is facts, critical think people…come on… remember politics is a nasty game… but there are alot of Caymanians that are benefiting from the construction of these schools  

    • Anonymous says:

      So, Ezzard and Walling:

      You both had much to say about this issue and its anti Caymanian blah blah stuff before the election. What do you have to say about Alan (92 Caymanian employees) and Anon (over 65 Caymanian employees).?

      And please everyone, in responding to this, try, try, try not to say anything about one of them at least being a Paper Caymanian. I know it will be difficult for supporters of Blizzard and Wally but, dammit, just try it for once and leave that out of the argument. And try, try try not to say all their employees aren’t "real" Caymanians. Go on, try it! You can do it!!

      Why am I not optimistic?

  2. Anonymous says:

    Folks, let’s look at the facts here on all this with the schools.


    CNS: "Facts" from an anonymous source with no supporting evidence??

    • Deep Throat says:

      I have more evidence than this service could handle, and by the way  how come you didn’t put it out as written, does it frighten you.

      No one else especially Mr McLaughlin can dispute what was written

      CNS: Now you are being silly. If you have evidence of your claims, then let’s see it.

  3. Cerridwen says:

     Alan, by golly, thank you for the honest and clear explanation of these strange goings on.  While there’s a lot of malarky to be found on these comment boards, they do also provide a venue for (reasonably) intelligent exploration of local issues – and you certainly have contributed in a positive and thoughtful way.  While, I am not necessarily a fan of the "ways and means" of the previous Ministry of Education, your post reminds me that there probably is more to the story than the headlines I’ve seen, or the comments I’ve read on CNS.

    • Anonymous says:

      Alan Wrote:

      "Contrary to the former Minister’s statements, there are many changes to the Works originally described in the Tender Documents for the Schools. As I know Mr. Alden to be an honorable man I can only assume that he was insufficiently briefed at the material time."

      Sounds like another PPM Minister was misled.

      I sure hope PPM gets some better advisors next time around.

  4. Anonymous says:

    People see and hear what they want to hear. Now hear this, Alden said that he initiated actions which I consider to be the proper course given the circumstances.  Sometimes the party asking for more can decide to become reasonable when they realise you are not a push-over.  There was little to gain from public pronouncements at the time.  However,  Mr. Bush has now made a public announcement on the matter and it is Mr. McLaughlin’s right and some would say duty to give the former Government’s side of the story.

  5. Told you so says:

    Anyone could see this coming from the time Tom Jones’s bid was 30 percent lower than the other ‘reputable’ bid.  Bet McAlpine are laughing thier posteriers off … and rightly so.   As far as I’m concerned, this recent debacle is a  not a case of "if" it was going to happen but "when" it was going to happen.  Bet you this 17 million is not the last of it either.  Tip of the iceberg I would guess!  This one is destined to go to our legal department for sure.

  6. Alan Roffey says:

    No doubt I will regret this almost as soon as I hit the "send" button and, unlike the other correspondents on this and most other issues, I am putting my real name to it.

    At Pre-Tender Conferences that I attended the tendering Contractors and sub-contractors were all instructed only to price the Works described in the Bill of Quantities.

    We were told that if those Quantites and/or the specification changed then the successful contractor would be paid for any difference in price resulting from those changes. This is a fundamental principle in Contracting that all of the parties know and agree on.

    Two of the major local contractors attending those two pre-tender conferences decided not to bid for Clifton Hunter or John Grey.

    Maybe those contractors knew that they might not be able to rely on the proper administration of the Ministry’s bespoke Contract in order to get paid fairly for any extra work that may have arisen and so chose not to take that risk. Maybe the other Contractor added a contingency sum to its costs to cover that risk.

    Tom Jones International Ltd. are used to working in a business environment where Contracts are properly administrated and trusted that the Contracts would be properly administered.

    I don’t know these things for a fact, I’m merely suggesting an alternative possibility for the difference in the two prices tendered.

    Whilst we know that TJI’s numbers were significantly lower than the only other tenderer, they were still considerably higher than the Ministry’s budget for the two Schools, therefore its fair to say that the competent and knowledgeable industry professionals employed by the Ministry must have thought that it was possible for a contractor to do the work for a sum considerably less than was eventually agreed with TJI for the Work.

    Contrary to the former Minister’s statements, there are many changes to the Works originally described in the Tender Documents for the Schools. As I know Mr. Alden to be an honorable man I can only assume that he was insufficiently briefed at the material time.

    What is required from the Ministry now is some timely, fair and reasonable decision making. Most of the Changed Works arose between July and November of 2008, as the Design was completed. It is now nearly July 2009.

    Admittedly, decisions are not easy for a Ministry to make at a time when there is already a budget problem and when the Government’s revenues are constrained by outside forces. The uncertain political landscape of the last few months did not help either.

    We are through that now. The Ministry and the Contractor are each being advised by competent experts and so there is no reason to believe that these things can’t now be agreed.

    If those necessary decisions are made now it would be more a reflection of the Ministry coming out of the predictable "decision free zone" that always follows a change of Government, rather than its capitulation to a rapacious contractor.

    It is certainly premature for any party to be considering litigation. There are provisions for Mediation in the Contract and the Contractors have been patiently waiting for the Ministry to agree on a choice of Mediator. Hopefully this wil happen soon.

    In the circumstances it would appear to be grossly unfair for TJI to be painted as the bad guy when all it is doing is pushing the work forward as fast as possible in order to get these Schools open so that the jurisdiction can start to realize a return on its investment.

    To date, Tom Jones International Ltd. has been an excellent Contractor to work for as a Sub-Contractor. Also, for the record, my company currently employs 92 Caymanians.

    Let the PPM and the UDP duke it out over the political issues. Leave the High Schools’ contractors alone, we are part of the solution, not the problem.

    I expect my associates in the Contractor’s Association to have something to say about this because TJI is their favourite punching bag too, but what I say to them is that they could in fact learn something from TJI and its approach to large project contracting.

    Mr. Whittaker is wrong about the Builder’s Bill. It was always intended to benefit honest smaller contractors who pay their employees, sub-contractors and vendors fairly, including pension and health bills, and who employ Caymanians. The smaller contractors need the most protection precisely because they have to complete more often with the fly by night unregistered shysters like those that suddenly appeared in their hundreds after Ivan. There was never any intention to hold anyone down, quite the contrary.

    The larger contractors have a lot to lose from the Builders Bill. Who in their right mind would willingly invite Government regulation into their industry. No, the Builders Bill provides a road map to growth and prosperity for an honest hard working Caymanian. Similarly, membership of the Contractors’ Association, where he can rub shoulders with the bigger contractors, and learn from their collective experience, can only help the small contractor, not hinder him.




  7. Alden….  shush, enough of the blame game.

    You’ve had your turn at running the country in to the ground. No mulligan’s here.

    UDP, PPM…  the same wolves in sheep’s clothing…  

    And Terry…  I thought I was the only Tom Jones fan… see you in Vegas

  8. Terry Wilton says:

    I am surprised that anyone is surprised by the behaviour of Tom Jones. As my friend Delilah said to me this morning as she walked towards me, across the green, green grass of home, "It’s not unusual." 

  9. Anonymous says:

    Why do you think they bid so low to begin with? What magic formula did you think they had that would allow them to build this school for many millions less than any of the other bidders? Perhaps Tom Jones knew they would make up the difference by billing for overruns!  If no agreement can be reached, the end may be that Tom Jones discontinues the work and then what?

    As said before, if it looks like a duck, walks like a duck and squawks like a duck – I would say it is a duck! Duh!


  10. vexed client says:

    It is called "extras" by the contractor.

    I have alot of sympathy for Mr. McLaughlins position on this. What is being experienced on the schools is the same thing that is happening to everyone on the Island with regards to signed contracts between clients and the large contractors.

    Every one ofthen have someone employed full time just to go through the contract with a fine toothed comp to find areas that then can then call "extras" and charge the client 3 to 4 times the going rate to then "include" these extras as additional costs sometimes at 300% to 400% markup.

    I am glad the Government is being victimised this time so that someone can wake up and trash can the new ContractorsLaw which was moved through Government by the mighty Construction lobby.

    Do not be fooled people, this new law will do nothing to regulate these crooked contractors, it will only reduce the number of companies that are ripping people off to the favoured few.

    I recently had the redicilous case where, after being fired for not completing the job on time, one of the contractors that the Contractors Association uses to advertise themselves in th eyellow pwces, thought it was their RIGHT to sue me for some $4 million dollars claimed through this "extras" rip off scheme. After spending in excess of $200,000.00 to defend this stupid claim, the judge decided that I owed this company nothing and indeed I had overpaid for work charged by almost $100,000.00. Now I am out of pocket the $200,000.00 paid to lawyers AND the $100,000.000 overpayment to the contractor.

    Instead of paying the judgement, now it is almost 1 year later and the same company claims they ar bankrupt, however all of th estaff and management continue to work from th esame compound but with a different name.


  11. Anonymous says:


    If Government wants to RECOVER FROM DEBT AND SAVE SOME MONEY,MUCH NEEDED,while still doing the project’s that they have planned;The best solution would be to give THE CUBAN WORK FORCE a chance to get a work permit to help build and rebuild here in Cayman.
    Think about it,any good professional worker in Cuba would be cheaper to maintain here in Cayman and still do the best job.
    Any Cuban would be happy to trade their service,for just the chance to travel out side Cuba.
    The Government here would only have to pay their rent ,give them food and a small allowance for them to be able to buy clothes and other necessary things to take back for the families.
    They could work under Cayman’s government business or under the supervision of any local contractor.
    They could help train some young Caymanian to learn skills like carpenters,mason,you name it.
    Stop paying expensive companies that charges millions,that are not there to pay and that could be saved,only by giving our Cuban neighbor friends a chance to help and to be helped.
    Let’s remember that Cuba housed lots of CAYMANEROS,when they needed help;That is how the people from Cayman and their descendants are called."Caymaneros".
    Please stop telling them is because their English ;If you think language is a problem ask your Caymanian-Cubans relatives how they manage to live there and communicate well.
    If not don’t go far, just go around Cayman’s  most popular work places and try speaking English with most of the workers there.
    They are not Cubans,but sure most of them are not Caymanian’s either and they sure can’t speak English neither.
    In most cases when you ask a question ,you may just have to say thank you and move on and maybe if you are lucky to turn around and ask any of the few Cuban faces that you may see around,ask them and they would get out of their way to even walk around with you to help you find what you want to find.
    Is just that sense of humanity that makes them non English speaking, communicate so well.
    Immigration needs to stop denien their own relatives from Cuba the visa to visit here.
    All the peoples from Cuba that have Cayman connections are either disapproved by Immigration Department or their visa to come here to visit are only approved for a 1 month.
    One month is not good to even get the chance to have dinner with them on our busy life,or to even take them out to places to show them the beuty of Cayman,or to take them out shopping,or to even have the chance to even give them some pocket money for them to take back.Please if any nationality really needs help and a chance to travel and know and learn about life and also eat properly and get the chance to
    Surnames that are very abundant here like Terry,Ebanks,Hyde’s,Moxam,Swaby,Wilson,Jackson and so many others always get double trouble to come out of Cuba and spend time in Cayman.In Cuba they are treated different because they consider them Caymanians and here in Cayman their surnames don’t seem to help them at all,because every time the Immigration approves their Visas,if they do,they are only giving a one month to stay.Not fair.Just compare the amount of Visa giving to Non Caymanians and the amount of time and see what we are talking about.
    The people at Immigration are not expats,all Caymanians so who is discriminating whom.
    We know where and how we are today but tomorrow we don’t know,Maybe tomorrow some from here may be in Cuba speaking no Spanish and asking for some one to help them find people with them surname.
  12. anonymous says:

    To Clearviewer…..sorry for you but if my memory serves me right any rape taking place in this Country by the big companies is nothing new!! This same thing was rampant when the very same Mr. Bush was in control of the Government prior to 2005 so would not depend on him to suddenly find the ‘common decency’ to do anything about it.  Alden and the PPM government handled the matter properly….all you have to do is read the article, pay attention to what it says and use your common sense to understand the meaning of "….before leaving office his ministry had notified the attorney general and a legal team had been engaged to look into the matter".

  13. Anonymous says:

    Why would a Government in the Sunshine not have revealed this until forced to do so?

    Alden should have been upfront with the people from the beginning.

    I believe more is going to be revealed about the mis-handling of the PPM.

    • Anonymous says:

      "Why would a Government in the Sunshine not have revealed this until forced to do so? Alden should have been upfront with the people from the beginning".

      Matters on which you are obtaining legal advice and may be subject to negotiation would not normally be reported to the public. Such an action could have had an adverse effect on any negotiation and would therefore have been unwise.  Public embarrassment to Tom Jones  could have caused them to dig in their heels.  Conversely, premature statements to the public about ‘cost overruns’ may be taken as an admission of liability and therefore potentially have legal significance or, at the minimum, embolden Tom Jones in their claims.  Not well-advised.

      It seems that the new LOGB in his eagerness to reveal ‘financial mismanagement’ by the PPM Govt.  is putting politics first and the interests of the country last.       

      • Anonymous says:

        You need another lawyer (maybe one that doesn’t define "progress" as a $74M deficit) if you believe that by admitting that someone is claiming for cost overruns that you have also admitted liability.

        The PPM has hid a lot of dirt. What they couldn’t hide very long was the $74M debt.

  14. Anonymous says:

    "Now why wait until you are out of office to complain or pass judgement  you should have been more alert on the way these operations were carried out".

    It is difficult to understand how reach that conclusion in light of Mr. McLaughlin’s comments quoted in this article:

    "…and that before leaving office his ministry had notified the attorney general and a legal team had been engaged to look into the matter".


  15. Joe says:

    Mr. Mclaughlin you should have smelled the rat from the begining 30% lower that all the other bidders is a big no no, and with a company like Tom Jones International who was in the elite and elaborate Condo construction business until they won the bid for the school.

    Mr. Bush please investigate as Mr. MClaughling has stated before paying, what are they installing at the schools that can cost $17 million more.  I think TJI has realized they made a mistake in their bid and is now trying to correct.

    Sorry TJI your mistake to take your lost and finnish the school.

  16. Clearviewer says:

    Seems like this Tom Jones have allways had a free range with whatever they wanted to do and with the blessings of the government , they pinched a lotof local contractors and laborers, it is high time that the powers to be look into the way these people operate and cut out the local people. I see the need for a lot of cleaning up here, a lot of explanations. 

    Now why wait until you are out of office to complain or pass judgement  you should have been more alert on the way these operations were carried out, it is time and I repeat TIME for some one to stop the bleeding of these big companies on the population of this country and allow some of our own people to prosper too.  I trust that Mr.Bush will have some common decency and do some thing about the rape that is taking place here.  It is not  with  the consent of the people that these attrocities are happening,  the politicians trying to one up each other. We are fed up and enough of the blame game, you did nothing before so let this group have a go at it and please for gods sake you all dont make the same mistake.  One love 🙂