‘CIG can’t afford schools’ TJI

| 17/11/2009

(CNS): The general contractor of the two high school projects has hit out at the previous government, saying the schools were part of a spending spree that was ill-conceived, poorly executed, over-indulgent, and insufficiently funded. Tom Jones International Ltd (TJI) said government has never had the resources to build the schools and what resources it did have, it managed poorly. Following his second work stoppage last week, the contractor said he has walked off the job because the new government has offered no evidence that it can afford to complete the projects.

In a long statement TJI has said it regretted suspending work at the John Gray and Clifton Hunter sites, but despite efforts over the last six weeks to resolve the issues surrounding outstanding payments, no solution has been forthcoming.

“At the heart of the issue is government’s ability — or lack thereof — to pay for the work,” TJI said in the statement.  “While the government has continually stated that it has budgeted funds to complete the projects, a line item in a budget, in practical financial terms, means nothing.”

TJI said that the government’s recent record of budget projections had been wildly inaccurate, and therefore the contractor was exercising its rights under the contract to ask government to provide a trust or a payment bond to demonstrate it has the financial wherewithal to complete the schools. “Government has steadfastly refused to provide such assurances,” the contractor stated.

Although the education minister said last week that the two sides were heading towards an agreement regarding future payment advances, before the stoppage, TJI said there was never an agreement in principle to the latest proposed funding arrangement.

“Verbal discussions touched on an agreement for the advance payments, which would have been acceptable to TJI, but the government then drafted an agreement that sought to change the terms of the original contract. These changes would have forced TJI to relinquish many of its contractual rights in order to obtain the payment from the government that was already due.”

Contrary to Education Minister Rolston Anglin’s comments last week that the contractor was attempting to hold the country to ransom, TJI said it was the cheque it was due that was being “held hostage” and the “ransom” was a "surrender of rights already agreed to by government in the original contract it signed.”

In the statement, the contractor said that to date the Ministry of Education had made more than 85 significant changes to the original plans, and claimed  they increased the costs by CI$17 million.

“The ministry never budgeted any funds for these changes or any other contingencies including the furniture and fixtures,” the statement said. “TJI bid on one project and is being asked to build quite another, one that is far more costly.”

The contractor also lamented the lack of a project manager throughout the development of the schools. The previous administration’s manager left before the “first shovelful of dirt was scooped from the earth", TJI stated. “The consequence of this has been catastrophic both to the government treasury and the projects.”

The firm went on to say that TJI spent dozens of hours negotiating, explaining, and trying to educate the Education Ministry (notably former Minister Alden McLaughlin, Chief Officer Angela Martins, and advisor Vaughn Carter) on the timeline and cost consequences of their decisions.

“More than 12 months since construction first began on the two sites, government finally appointed another project manager, David Benoit, to oversee the construction,” TJI added, saying it looked forward to working with him and completing these projects under the explicit terms of its contract with government.

Despite persistent rumours that TJI has been seeking to leave the job and that government in turn is seeking for the contractor to be changed, the firm said it very much wanted to finish the project. “TJI has the ability, expertise, and experience to finish these projects at a price that is tens of millions of dollars lower than the other on-island contractors,” the statement said. “The Tom Jones Group of Companies has been in business for more than 100 years and has completed every job it has ever worked on. Except in the current circumstances in the Cayman Islands, it has never ‘walked off’ a worksite.”

Print Friendly, PDF & Email

Category: Headline News

About the Author ()

Comments (21)

Trackback URL | Comments RSS Feed

  1. Anonymous says:

    If I was a government minister that was charged with deciding who to award these two school projects to, I would have chosen a solid LOCAL company with a track record.  Someone like Arch&Godfrey, Hadsphaltic, Jimmy Powell or McAlpine because these people have a vested interest in Cayman and have been around here donkey years.  They cannot pick up and run, nor would they want to.  Enough said!

    … furthermore, I wouldn’t have put all my eggs in one basket … two different contractors; one for each school just in the ‘EVENT’ one walked off the job.  It’s called spreading the risk. 

    But, I’m not a government minister, so what do I know!

    • Anonymous says:

      They couldn’t afford  a solid local company to do the job as they were no doubt quoting twice the price. Much like you wouldn’t buy from local traders because their mark up is pathetic. Instead you buy your bigger purchases overseas.

      If local businesses were flexible and willing to reduce their thousand percent markups they would see more business. People just cannot afford to keep paying their silly prices. It’s nice to throw some money at local businesses and the local economy but unlike the old days when we had money to spare, everybody has to cut their bills.

      If one of the local companies was willing to trim it’s margins and cut costs like every other business in the world outside Cayman is doing, then no doubt they could be getting some of the building action. Of course they need to be of a size that they can handle such a big project, which I don’t really think they are.

      I agree with the diversification of using different contractors for each project though, that is plain and simple common sense. That is why TJ has them over a barrel.

  2. Government is in a mess says:

    The reasons for the close down show either how perilous the Government’s finances are or how arrogant the current regime is.  The Government could not provide a performance bond which appears to be a significant indication that it is not consider to be good for its future debts.  It sends a very disturbing message to the rest of the world.

    • The fine print says:

      I keep reading and re-reading this press release. And I have been trying to comprehend what is wrong with it.  The comment by 12:52 made me realize. The client/customer in this case government NEVER has to provide a performance bond! It is the contractor that does so normally 50% of the project cost. Also, the mention of advance payments is curious. Paid upfront for material costs?  That might be satisfactory if those were the arrangements.  But paid upfront for work which hasn’t been completed? I’m afraid not.  The most worrisome aspect however, is the relationship that is developing between client and contractor. I understand that TJI is a big  multinational construction firm, but that does not give them the right to make public their views on the finances of the Cayman Islands Government. Their client. It is wholly unprofessional. TJI signed this agreement knowing that the projects would straddle a national election and if the purpose of crying the blues later over cost-overruns is to do some politicing on their own they have overstepped.

      We’re not concerned if the cafeteria is in their opinion "five star", nor if studio was "designed for the Beatles". That is childish. Our concern is what the problem is.

      To clear it up it would be best for government to come clean on this and advise the public in detail the financial arrangements on these two projects. As well as the alluded to additional work amounting to $17 million dollars.  And it would be best for TJI to give specific reasons for their failure to proceed.  Without political comment, without innuendo and without their rhetoric on how the country is managing it’s finances.

  3. Anonymous says:

    Boggles the mind that TJI would accept a contract if it suspected the CI Govt would not be able to pay. Surely, a 100 year old company would have done the proper due diligence.

    The TJI statement is alluding to a ‘bait-and-switch’ situation by the Govt; "TJI bid on one project and is being asked to build quite another, one that is far more costly.” This would indicate project creep.

    Needless to say, the current work stoppage indicates a serious instance of mismanagement somewhere. It sounds like we need an impartial report and arbitration to settle the dispute.

    Dan, we need your help!

    • Anonymous says:

      TJI signed the contracts well before the global financial meltdown.  Who could have predicted that?

  4. Anonymous says:

    What it shows is even with the auditor General and CTC if you have a Government that does not understand that there is a reality with what a country can or cannot afford in comparison to what the elected members want then they will drive the country into financial ruin. This is no different than what has happened to all of our neighbors in the other Caribbean Islands.

    None of their leaders set out intentionally to destroy their islands, I am sure they all love their countries. But we see the wants were the driving factor and since the Minister was not spending his money he went on a spending spree.

    The PPM figured they could buy an election build fancy (Beetle’s studio’s) schools and roads at unbelievable and unknown cost and the people would be blinded and then get elected and cover it up by blaming the economy. In the meantime the UK was waiting in the wings to come and tell us that we are not capable of running our country.

    But we are smarter than they thought, and saw through the PPM’s trickery. Too bad it took us so long and the country is suffering.

    Comapre to the UDP they are getting things done like the new hospital and port at no cost to the country.

    Alden and the PPM should hide their faces with shame and disgrace, too bad they look like they still have some die hard followers who insist on supporting the PPM’s proposed progression of Cayman into recession and then back into the control of the UK.

    • Anonymous says:

      "Comapre to the UDP they are getting things done like the new hospital and port at no cost to the country."

      If you believe these things are "free" to the country, you are very gullible.

      Nothing in life is free.  No person, or business is going to spend the $150 million dollars on a port for the Cayman Islands, for "free"



    • Anonymous says:

      Fortunately there still enough independent and intelligent thinkers who know that everything does not have to be either the UDP way, or the PPM way.

      We need good governance, but for four long years we have been burdened with a Governor who did nothing more than pay lip service to those words.

      Shutting down the two school sites achieves an objective, namely freeing up cash flow, that the Premier failed at by attempting a pension holiday for Civil Servants and a number of other hair-brained ideas.

      I can guarantee that "negotiations" with TJI or any other contractor will be long and protracted as the money saved by not paying TJI every week/month is desperately needed elsewhere, especially if millions of dollars have to go back to the Chief Justice’s budget for legal aid.

      After the sites are overgrown with weeds, and perhaps marred by a few acts of vandalism, Sheldon Brown’s business manager can do a glossy photo spread to the monuments of the PPM’s excess, which they are,  and the UDP can point to that anytime their current actions are brought into question.

      I really don’t care if people want to be die hard UDP or PPM supporters, but don’t try to tell the rest of us that it is raining when you pee on our backs, and when I see and smell a big pile of horse poop, I’m not some little kid who will get excited and think there must be a pony buried under it.

  5. Anonymous says:

    The PPM is to "BLAME" no matter how you twist it or turn it. The ball was in their court and the batted it "UP THE CREEK" !!!!

    And so, we are all now "PAYING FOR THEIR SCREW UP’s" 


  6. Anonymous says:

    If Tom Jones International Ltd (TJI) said government has never had the resources to build the schools – if that was true then why did TJI ever contract to build the schools?

    Also – who really owns TJI?




  7. Anonymous says:

    dart will…as usual…. still waiting for my dart citizenship here…

  8. A wha gwan says:

     one word: Dart

  9. The fine print says:

    If the contractor is being asked to do work outside it’s contractural obligations then I have sympathy for the contractor that they have valid reason for stopping work until it is sorted out how additional costs will be paid.  That would appear to be ineptness on the government’s part.  If on the other hand if this was a design-build contract, quite common with government work, with missing ingredients, also quite common in the hope of adding to the profit margin later, I have no sympathy for the contractor.

    Someone in this transaction is the predator and someone is the prey.

    It will take the Auditor General’s Office to find out which.

  10. what a mess says:

    Should have hired a reputable local company…like McAlpine, Hadsphaltic or Arch and Godfrey…and at the same time keep much more of the money in the local economy.

    Of course there are no real laws here with real teeth to ensure that politicians will be held to real accountability and real transparancy…just the way courrupt and/or incompetent politicians like it.

    They are like gamblers…if the deal turns out good, then claim the glory…if it goes belly up then blame, blame, deny, deny. Either way we (politicians) still get paid…oh, well…better luck next time…



    • Young.KY.female says:

      Those companies might be reputable and are local but would cost millions more to hire to complete this job – which doesn’t seem to make sense in regards to this article considering they can’t pay the "low-cost" contractor.  Maybe you’re suggesting if it were a local company, the government would be more likely to release the cash? I doubt it. They’d probably use that as an excuse to prolong payment since they can’t really run from the project without undeniable consequences for their future contracts locally.

      • anonymous says:

        You’re using a lot of "likely" and "probably" scenarios there eh?

        It is true that the local companies mentioned earlier came in with higher bids. However, Govt. could have negotiated more with local companies too. Plus, much more of the money would stay in the local economy…making a positive impact now rather than a negative impact as is currently being experienced.

        To truly see the economic benefit, Govt. needed to have looked at the "big picture" and the dominoe effect of any lage project…not just the $ amount on a piece of paper for a bid.

        In closing, the local companies bids covered some of the same "cost over runs" which TJI are now billing some $17 million more for. So, in the end even your justifying the up-front dollar amount paid to a foreign company is not likely to hold water.

  11. Anonymous says:

    Time to call in the Auditor General. It looks to me like TJI is working in collusion with the current administration to make the PPM look bad. I can hardly see the reason for that since the PPM has been doing a great job of that all by themselves.

    TJI have a contract to build schools, and if they are not being paid then they have a right to take action. However, what I see here is what we in Cayman call a horse dead and cow fat story. For those not our lingo it means a whole lot of talk about things unrelated to the issue at hand.

    TJI, please stick to the topic of construction, contracts, and payment under whatever terms and conditions. Dredging up stories about officials that are long gone is a red herring that nobody in their right mind is going to buy.

    We are starting to look like a banana republic, and the smell in the air is akin to the one in Iraq that attracted so many companies there to assist with the reconstruction.

    Am I paranoid, or is someone setting the stage to hold up a contract and say "See, this is what the Central Tenders Committee will do to you. We don’t need no stinking CTC!"?

    • Anonymous says:

      It is amazing how people can spin a story to try to accomplish their agenda – "We don’t need no stinking CTC" sounds exactly like a Dictator! Please dry up and blow away along with all your type, for Caymans good!