PAC bogged down on Matrix

(CNS): The examination of witnesses by the Public Accounts Committee (PAC) regarding the auditor general’s report on Matrix began to resemble walking in treacleon Wednesday as members seemed to get bogged down in subsequent events and misunderstandings of the details of the contract, as oppose to the AG’s findings on the tendering and award process. Committee members questioned witnesses on a number of issues, from the value of scrap metal moved to the cost of bailing units, which saw the committee chair on a number of occasions assisting members with their understanding and relevance of the matters at hand.

Carson Ebanks, who was permanent secretary in the Ministry with responsibility for Environmental Health at the time the contract was awarded, Roydell Carter the director, Sean McGinn the assistant director from the Department of Environmental Health, appeared to give evidence but found themselves being asked repetitive and unclear questions that failed to dovetail with the issues raised in the audit with regards to procedures over government contracts.

The witnesses were supposedly called to shed on light on the findings of Auditor General Dan Duguay’s special report —The scrap metal tender and contract with Matrix Inc. — which examined the process by which government had tendered and awarded the contract and the lack of due diligence done on the contractor. The issue over Matrix came in for public scrutiny when the company ran into difficulties because of shipping issues and abandoned its contract with the Cayman Islands government.   

However, despite the failure of the contract, for the first time ever the Cayman government did receive some money for its scrap metal. Matrix managed to complete a number of shipments before one of the loads was seized by US courts, and paid the DoEH $300,000. Although the original contract had been for $1.2 million to remove all the scrap metal, of which the contractors were in breach, in the end the CI government did not suffer any losses. Given that in the past it had paid to get rid of all hazardous waste, on this occasion there was some financial gain to government coffers.

In his report Duguay found that there were a number of shortcomings in the tendering process, but above all the major concern was that not enough due diligence had been done on the principals connected with Matrix and their lack of experience in the field of shipping scrap metal internationally.

However, during the questioning of witnesses PAC members were focusing on the details of the contract, which were not closely examined in Duguay’s audit, and also the contracts which Matrix entered into with local private contractors.

George Town MLA and PAC member Ellio Solomon asked the DoEH director, Carter, over and over again how the value of the scrap metal had been assessed, despite the fact that it was not relevant to the contract. Carter explained that it was a flat deal and that Matrix had entered into a contract in which they agreed to pay Cayman a set fee for the metal regardless of the price they would eventually gain for it on the international scrap metal market.

On a number of occasions the chair, Ezzard Miller, had to clarify issues for Solomon,who did not appear to have read Duguay’s report or understood the parameters of the Matrix contract as examined in the report.

The committee also called the Caymanian partner of Matrix, William J Bodden, who told PAC that he had lost US$500,000 in the deal with the Canadian principals of the company whom he partnered with to create the majority owned Caymanian company.

Despite thefact that Bodden Town MLA Dwayne Seymour, another committee member who did not seem entirely versed with Duguay’s report, had insisted that Bodden was called, he did not ask the local partner any notable questions. At the last PAC meeting, Seymour had said it was important to call Bodden so he could answer questions as to why local contractors had not been paid by Matrix for the sub-contracted work they had done, but he was not challenged on that point.

Miller had at the time when members had insisted on calling Bodden pointed out that the private contracts were beyond the scope of PAC, which is concerned with ensuring accountability in public spending.

Ebanks, who is now the chief officer to the leader of government business but was at the time of the Matrix contract working with the then minister, Arden McLean, told the committee that the government had no legal obligation to Cayman contractors who had entered into private deals with Matrix.

He explained that they made no understandings with the firm that they would employ local companies. “That was not part of the deal,” Ebanks said. “It was up to them who they subcontracted or how they intended to remove the scrap metal.”

He said it was a straight forward deal whereby government entered into contract to remove somewhere around 16,000 tonnes of scrap metal and in return it would receive $1.2 million – the first time ever that government would receive money for waste. Ebanks spelled out that the only reason why the contract was in question was because the principals ran into unexpected problems with a hurricane. One of the ships Matrix contracted was forced to turn around, pushing up costs, which then got bogged down in the courts. Carson said government received some money and the firm removed around one third of the metal that it had hoped to get rid of.

With the PAC still seemingly confused about the contract and continuing to veer away from the content of Duguay’s audit, Solomon and Seymour told Miller that they would like to call the Canadian principal Bruce Young on the telephone as a witness at another hearing, as well as the former minister, Arden Mclean. The meeting was adjourned until the PAC’s next closed meeting on 25 August.