Calder Hart admitted under cross examination Tuesday that the Urban Development Corporation of which he is executive chairman awarded a $368 million contract to a local company that which failed to meet all the requirements. He was giving testimony at the Commission of Enquiry into the construction sector and UDeCOTT.The company in question - CH Development, a subsidiary of the Malaysian firm, Sunway International - was awarded the lucrative contract to build the Legal Affairs Towers on the Government Campus in Port-of-Spain.
Hart told the commission said it was done because of the local company's connection with the international firm. “At the time, I was not involved in the pre-qualification except to look at the assessment that was brought to the board,” he said. Hart said the board received a recommendation regarding CH/Sunway. At the time he was both chairman of UDeCOTT and chairman of the tenders committee.
In order to qualify for a contract a company had to show that had a five-year track record and the financial ability to handle the contract. CH didn't but Hart insisted that it got the contract because it had the support of Sunway. The company later changed its name to Sunway Caribbean.
He admitted, “It may not have been the neatest exercise but the fact is it resulted in a building going up and the fact is that Sunway emerged as the top performing contractor on the Government Campus.”
The UDeCOTT boss said the board “at all times felt it was dealing with Sunway” and he dismissed suggestions that UDeCOTT rejected Government procurement rules. He said former ministers in the Ministry of Finance Conrad Enill or Christine Sahadeo had told him those rules were just "guidelines".
But Hart also pointed that UDeCOTT directors must follow specific instructions from the Cabinet regarding State projects or resign. He insisted that UDeCOTT "cannot operate without a directive from Cabinet", adding that "there is latitude within the prescription of how we do things."
Hart's statement contradicted UDeCOTT's Senior Counsel Andrew Goddard who told the commission last week that UDeCOTT "is under no legal obligation or constitutional obligation to accept instructions from ministers." That position was also clearly stated by UDeCOTT's CEO, Neelanda Rampaul.
Fitzpatrick sought clarification. "The issue is do you consider that you are bound to carry out the directives of tour sole client and sole shareholder?" Fitzpatrick asked. "Yes," Hart replied.
When Fitzpatrick pointed out the obvious contradiction, pointing out that cabinet could not only gave instructions but also direct UDeCOTT on how to carry out the instruction, Hart said that's where the issue gets "a little blurry".
He said, "If for example you are taking direction that is beyond the scope or not within the business convention of a company like UDeCOTT, then I think that is something that would require further discussion, further debate."
On the matter of the award of the contract to CH Development, Fitzpatrick reminded Hart that in the case of another million-dollar project Hafeez Karamath Ltd was treated separately from its parent company Hafeez Karamath Construction Ltd (HKCL) when it submitted its bid for the Customs and Excise building in Port of Spain in 2003.
Fitzpatrick noted that the legal opinion was that there is a clear distinction between a company and its subsidiaries and suggested that Hart was fully aware of that advice Sunway and its subsidiary, CH development submitted an application for pre-qualification with UDeCOTT.
But Hart was adamant that UDeCOTT did not see it that way. "We didn't see them as separate legal entities," he said.
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