Minister: scrap deal a mixed blessing

The $1.25 million scrap metal removal contract with Matrix International has now been signed, and last Thursday the company began removing the first shipload of material from the George Town landfill.

Works Minister Arden McLean is relieved the work is finally underway, but sees the tendering process as a mixed blessing for the Cayman Islands Government.

‘The controversy surrounding the perfectly legitimate contract signed with Matrix International has led to a kind of Catch-22,’ he said.

That’s because the Canadian owners of the company have now formed a Caymanian partnership, allowing it to offer competition in buying scrap metal here in the Cayman Islands in the future.

The Minister dismissed any notion that the awarding of the contract did not follow the letter of the law.

Under the conditions of the landfill scrap metal contract, Matrix International’s activities are restricted to removing the landfill scrap. To expedite the process, the company asked that certain concessions were made to waive work permits and a business license, said Matrix General Manager Vincent Young.

‘Yes, we did ask for those concessions, as well as exemptions on port fees and customs fees, as we will eventually need to import more equipment and we were trying to cut our costs,’ he said.

‘However, we did not get any concessions, and work only began once all the paperwork was completed and the work permits for our employees went through,’ he said.

Minister McLean has argued the company followed all legal procedures.

‘Matrix International submitted all the required documents and had a combination of the highest price offered – $1,250,000 – as well as demonstrated the best knowledge of the processes necessary to complete the project,’ said Mr. McLean.

The next highest bid was $50,000 lower.

Minister McLean commented that not-unexpected delays caused by due diligence considerations and final contract details prior to signing moved the date of the completion of the contract back by three months, to March 2008.

Mr. McLean blames the timing of the formation of the new scrap company on the media criticism Matrix endured during the tendering process.

The Minister said negotiations and delays spurred speculation of a scandal, and he blamed the controversy on the decision by Matrix to establish a Caymanian company.

‘This was supposed to be a simple, straightforward contract to get rid of the scrap metal in the George Town dump,’ he said.

‘It’s unfortunate that because of this unfounded controversy, a project this government has invested so much effort in to raise money for this country has resulted in the possibility of losing a lot of future scrap metal revenues to a legitimate competitor,’ he said.

The government may now potentially lose money if scrap it intended on selling itself can now be collected and sold by Matrix.

‘Unfortunately, that’s what we got for our country as a result of our efforts to be diligent in our negotiations.’

However, Mr. Young says the controversy did not affect the decision to form the Cayman company.

‘We always had the intention of forming a company with Cayman partnership,’ said Mr. Young.

He and his brother Bruce, who is Matrix company president, worked in the family scrap metal business before founding their own scrap company in Canada over 15 years ago.

The Young brothers were looking for a new opportunity and came to Cayman after researching potential markets in the Caribbean region.

‘We flew down here three times before the deal closed to determine whether Cayman was what we were looking for and it fit our needs. We are here for the long term and we outlined our intentions in our bid documents,’ he said.

Vincent Young says it was primarily a logistical consideration to set up a Caymanian company with a local partner, William J. Bodden, who he says understands the local market and labour force.

‘For one, his involvement has allowed us to successfully hire eight Caymanians, and we have an additional four local people working under subcontract through Island Recyclers operating the heavy equipment,’ he said.

Mr. Young said the company is looking forward to basing its operations in Cayman and has done everything by the book.

‘We had to go through the same process as everyone else, and appreciate this opportunity that has been given to us,’ he said.

‘We anticipate a long and happy relationship with the Cayman Islands.’

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