An outside auditor will be hired to review the bidding process and eventual award of a $1.2 million scrap metal removal contract at the George Town Landfill.
The move comes at the request of the Cayman Islands Public Accounts Committee, which is made up of both government backbenchers and opposition members of the Legislative Assembly.
The contract, given to Matrix International Ltd. in December 2006, has been the subject of controversy in the Cayman Islands almost since its inception.
Most recently, Works and Infrastructure Minister Arden McLean revealed that the company hired for the project still owed government nearly $1 million on the contract. At least three subcontractors hired by Matrix have told the Caymanian Compass they also have not been paid.
The contract was atypical in that Matrix was supposed to pay the government for the scrap metal it removed. Presumably the company would have been able to sell the valuable scrap in the open market for a higher price.
Forty-five per cent of the original mixed metals slated for removal as part of the contract are still at the landfill. On 2 November, 2007 the government suspended all Matrix operations there and has declared the contractor in default.
The contract was scheduled to expire in mid-March.
However, Auditor General Dan Duguay said this review will not focus on the actual operation of the Matrix contract, only its tendering and awarding. Mr. Duguay said his office still has no official word from government that Matrix will not fulfil its obligation and pay back the money it owes.
‘We’re not in the business of trying to solve problems for government,’ Mr. Duguay said. ‘They’re still trying to resolve the rest of the contract issues.’
Mr. Duguay said several important questions have been raised in the Cayman Islands press about the contract tendering and award process.
First, he said the deal was given to a company that is partly owned by foreign interests that actually bid about $50,000 higher for the project than a locally owned firm.
Matrix International Ltd. is 60 per cent Caymanian-owned, and 40 per cent owned by Canadian Bruce Young.
Second, Mr. Duguay said the audit will look into whether government adequately reviewed the expertise and experience of the firms bidding on the scrap metal removal contract.
‘There were some questions about their (Matrix’s) credibility and whether they had been involved in this field before,’ Mr. Duguay said.
In a somewhat unusual move, Mr. Duguay is bringing in an outside auditor from Canada to look into the contract. Daryl Wilson, the former auditor general of New Brunswick, is due to arrive on island later this month and will hopefully finish his review by the end of April.
Coincidentally, New Brunswick is the area where Bruce Young and his brother run their towing business. But Mr. Duguay said the three men have never met.
Mr. Duguay said his office needs to bring in the outside auditor because it is still reviewing annual financial reports from various government departments for past budget years. He said some of those reports were submitted late. (See Compass, 14 February ‘Gov’t audits still lacking’)