Govt faces $60m suit
GOVERNMENT FACES a $60 million lawsuit over its award of the Bridgetown Pierhead Marina Project to SMI Infrastructure Solutions Inc.
Elliott Mottley, QC, has been retained by British company Lagan Construction and has written Prime Minister Freundel Stuart, Barbados Tourism Investment Incorporated (BTII) legal counsel Adrian King and Minister of Finance Chris Sinckler on the company’s behalf. Lagan had entered a $482 million bid. The cost of the arrangement with SMI is $505 million.
Lagan contended that in a letter dated November 13, 2009, from then BTII chairman Dr Jerry Thorne, the agency, which has responsibility for the project, “created a contractual relationship” to negotiate with the British company. Mottley indicated that Government subsequently revoked the BTII’s award of “preferred bidder” status to Lagan on November 27, 2009.
“. . . Lagan shall seek damages from BTII comprising all of the costs and expenses it has incurred to date in this matter connected with its bid, which on current computations amount to US$250 000. Lagan shall also seek to claim from the Government of Barbados its lost benefit of the US$241 million BOLT contract for the project with BTII, in the sum of US$30 million,” Mottley wrote.
Responding to Mottley, King suggested, inter alia, that Lagan should bring its action against Thorne; that Thorne acted ultra vires and his actions were not binding on the BTII or Government; that Lagan had been advised not to rely on Thorne’s representations; that the design submitted by Lagan was not buildable; and that Provision 33.1 of the instruction to bidders stated the BTII reserved the right to select, annul or reject all bidders at any time prior to the award of a contract without incurring liability.
The SUNDAY SUN obtained a copy of a letter dated November 26, 2009, written by Thorne to Government, warning that Cabinet’s attempt to award the contract to a company, Signature Management Incorporated (SMI), was illegal since it was an international business company and prohibited from participating or trading in goods and services in Barbados.
Thorne advised Government that an award of the Marina project to Signature could result in Lagan taking legal action against BTII. He noted Signature was “not capable of undertaking the project without significant risk to the BTII and the Government of Barbados”.
He also queried a redesign of the project by Signature costing more than $40 million when a design already existed.
Thorne subsequently resigned, as did fellow BTII board members deputy chairman Mark Prescott, Paul Bernstein and Decourcey Headley.
When contacted, chief executive officer of the BTII, Stuart Layne, declined to comment, saying only that the situation was in the hands of BTII’s lawyers.The SUNDAY SUN accessed copies of SMI Infrastructure Solutions’ registration from St Lucia’s Corporate Affairs Department, and principals of the company include Glyne Bannister of Royal Westmoreland, St James, and former head of the Private Sector Association, Ben Arrindell. Mitch Codrington is legal counsel.
Last September, Opposition Leader Owen Arthur raised concern that Signature could not legally be awarded the contract in Barbados, and questioned the involvement in the project of SMI Infrastructure Solutions Inc. in St Lucia.