High school projects hit big snag

The construction on the Clifton Hunter High School in Frank Sound and the new John Gray High School in George Town had started in 2008.

After the effects of the global financial crisis started to become clear in the late fall of 2008, then Leader of Government Business Kurt Tibbetts announced the two school projects would continue, although two other schools projects would be put on hold.

During the run-up to the 2009 General Elections, the school projects became a campaign issue, with the opponents to the incumbent People’s Progressive Movement charging that the Cayman Islands couldn’t afford the schools, which had a combined price tag of nearly $120 million – exclusive of furniture and fixtures. The PPM countered by saying the country badly needed the new schools and that the construction activity was providing important spin-off economic activity in the Islands.

In the General Elections in May, the United Democratic Party took over the control of the government. New Leader of Government Business McKeeva Bush claimed in June that the schools projects already had cost overruns of $17 million, a claim that was confirmed by Financial Secretary Kenneth Jefferson. Former Education Minister Alden McLaughlin, now an opposition member, refuted the claim. He admitted there were disputes with the general contractor, Tom Jones International, but said that until the disputes were resolved, the amount of cost overruns couldn’t be quantified.

Mr. Bush also announced that both schools would not be completed in time for opening for the September 2010 school year, saying that John Gray wouldn’t be finished until January 2011.

In August, the government announced it would have to make an $8.77 million supplementary allocation for the 2008/09 budget for work that had been completed on the schools ahead of schedule.

Later that month, Mr. Anglin announced that the two new high schools, when completed, would not have enough space to accommodate all the students that would go there.

In September, severe problems between the government and the general contractor surfaced. More than 100 construction workers employed by Tom Jones International and its subcontractors were given one-week layoffs notices on the John Gray site.

Hunter Jones, the owner/director of Tom Jones International, said notice of the pending shutdown was given because of non-payment of amounts due on 11 September.

The Ministry of Education stated Tom Jones wasn’t due any payment until 10 October and that they would consider a walk-off as a breach of contract. The ministry also wrote to Tom Jones International about other concerns, including that the general contractor ‘may be wrongfully accounting for the value of payments received against the completed work.’

The letter went on to say the Ministry of Education was aware that Tom Jones International had received payments for equipment and material purchases invoiced on specific certificates of payment; had received advanced payments of $6 million; and that it had also received withdrawal payments through a bridge loan facility, all without ‘an accurate and proper accounting’.

The following week, Tom Jones International returned to the John Gray work site, as did the major subcontractor, Caribbean Mechanical (High Schools 2008) Limited, after a payment of $5.3 million was made to a local back to cover a bridge loan.

However, issues between the government and the general contractor remained.

On 13 November, construction came to a halt on both the John Gray and Clifton Hunter projects when Tom Jones International walked off both job sites, this time with little warning. The dual shut down put more than 200 people out of work.

Mr. Anglin said in a statement that Tom Jones International had advised the ministry just the day before that it intended to stop work on the schools ‘based on their belief that the Cayman Islands Government has insufficient funding to complete the projects’. The education minister denied that government did not have the funding and said Tom Jones had received all certified payments it was due.

The following week, Tom Jones issued a statement through a spokesperson confirming that the core of the current dispute was Tom Jones International’s perception that the government could not afford to pay for the work on the schools.

The statement went on to harshly criticise the previous PPM government for its handling of the projects.

‘The schools were part-a large part-of the previous administration’s spending spree that was ill-conceived, poorly executed, over-indulgent, and insufficiently funded,’ the statement said.

Tom Jones said there had been 85 significant changes to their original plans for the two schools, increasing the costs by approximately $17million.

The following week, Mr. McLaughlin fired back, saying the Tom Jones statement was filled with ‘many inaccuracies and deliberate untruths’.

The former education minister accused Tom Jones of trying to ‘extract more money from government.’ He said most of the change orders had been initiated by the general contractor and that ‘in the vast majority of instances… Tom Jones was vastly over-inflating the cost of these items.’

With relation to the change orders submitted, Mr. McLaughlin said the Education Ministry technical team concluded that ‘in the vast majority of instances… Tom Jones was vastly over-inflating the cost of these items’.

On 24 November, Caribbean Mechanical filed suit in Grand Court against Tom Jones claiming $2.24 million for certified work done on the two high schools through the end of September.

On 25 November, the government sent Tom Jones International a one-week notice of its intention to terminate the contracts to build the two schools. The notice cited two particulars of breaches under the contracts, including a wrongful work stoppage and failing to make payment due to at least one subcontractor on the projects.

One week later, it cancelled the contracts.

On 30 November, Tom Jones filed a lawsuit against the government seeking immediate payment of the two sums it claimed it was due, totalling $2,947,818.54, plus interest and costs.

Through mid-December, both high school construction sites remained shut down.