The Caymanian owner of scrap metal company Matrix International said his investment of US$500,000 in the firm was used to pay the government to buy metal debris at the landfill.
The Public Accounts Committee called William J. Bodden to give evidence before it last week, to answer questions about the $1.25 million contract it signed with the government and failed to complete.
Mr. Bodden explained to the committee that he became a 60 per cent owner in the company in return for a US$500,000 investment, after he was approached by Canadian Bruce Young who said the company could make as much as $20 million.
He said that from the outset, the shipping arrangements experienced ‘serious logistical difficulties’.
‘In fact, the first shipment took five months to complete,’ he said. The company removed a total of five shipments of metal from Cayman, the last in October 2007.
This last shipment was seized by the shipping company because Matrix could not pay the shipping costs, which were higher than anticipated due to delays caused by a storm and by the ship being unable to get permission to dock at George Town for several days, Mr. Young told the Caymanian Compass last week.
Mr. Bodden said Mr. Young was the managing director of the company and brother Vincent Young was general manager of the landfill operations. Mr. Bodden placed his nephew, Andrew McLaughlin, in the company as director to keep an eye on his interests.
Mr. Bodden said Mr. Young told him that he was leaving the Island for a 10-day vacation. ‘He did not return to the Cayman Islands and effectively abandoned the company,’ he said.
He said he had tried to resuscitate operations, but the government rejected his proposals and the contract was cancelled.
The government, which received only $310,000 of the $1.25 million it was owed, was paid out of Mr. Bodden’s investment, he told the committee.
Committee chairman Ezzard Miller earlier played to the committee a telephone message from Mr. Young, in which the Canadian said there was no point in questioning Mr. Bodden because he knew nothing of the day-to-day running of the company.
The committee heard that Matrix had removed 6,000 of the estimated 16,000 tons of metal waste that had accumulated at the landfill over the years, much of it after Hurricane Ivan.
Sub-contractors hired by Matrix to transport the debris from the dump to the port claim they are still owed $300,000.
Ministry of Financial Services, Tourism and Development Chief Officer Carson Ebanks, who was permanent secretary of the Ministry of Communication, Works and Infrastructure when the Matrix contract was signed, also appeared before the committee on Wednesday.
He said there was now more metal waste at the dump than there had been at the time the contract was signed.
He told the committee that since the Matrix deal fell through, the government had called for two more tenders, but had not attracted any bids.
‘We export batteries, we pay for that. We export used oil and we pay for that. This was the first instance someone paid us to take the scrap,’ he said of the Matrix deal.
Mr. Carson went on to explain that the contract was cancelled after Matrix ran into legal and financial difficulties with the shipping company.
‘The shipment was seized in the US because they had some contractual breakdown with the shippers. A storm hit, they were a little over half way, and they turned the ship around and went back to the States.
‘They came back again and charged for both shipments. They came to loggerheads. The people they had the contract with seized the shipment and said ‘we’re not going to release this until you pay us’. They took them to court and ended up paying more for the shipping costs than they anticipated. As a result, they were not able to pay us.’
Mr. Bodden told the committee he had lost another $50,000 trying to get the load released in the US.
United Democratic Party representative and committee member Ellio Solomon asked why the government had not bought a scale and weighed the waste so it could get a better idea of how much metal waste was in the landfill and therefore how much the government could have been paid for it. He was told that the waste could only be weighed by a scale, costing $75,000, once it had been baled by a baler, which cost $400,000.
Officials from the Department of Environmental Health, which is responsible for solid waste, said they used a US Army Engineering Corps formula to estimate how much loose metal waste was in the dump.
Deputy director of the department Sean McGinn said that at the time the Matrix contract was signed in March 2007, scrap metal sold for about $190 per ton, and was now selling for $50 per ton – depending on its quality.
Director of Environmental Health, Roydell Carter said interest in the scrap metal continues. ‘Up until last week, we have had enquiries from the public and overseas companies that they are still interested in acquiring this scrap metal.’
The Department of Environment Health is preparing a new tender. ‘This time, we’re going to try to see if we can sell what we already have baled,’ Mr. Carter told the committee.
Auditor General Dan Duguay, whose report on the Matrix contract is being scrutinised by the Public Accounts Committee, said: ‘When we looked at this contract, it was made clear to us that the primary goal of the Department of Environmental Health was to get rid of the metal. The fact that they could get money for it was a bonus in their minds.’
The committee will resume on 27 August when it plans to call former Minister of Works Arden McLean and to hear from Bruce Young via telephone.
This last shipment was seized by the shipping company because Matrix could not pay the shipping costs, which were higher than anticipated due to delays caused by a storm and by the ship being unable to get permission to dock at George Town for several days, Mr. Young told the Caymanian Compass.