Public Works Department Director Max Jones, in responding to several questions by the Caymanian Compass, explained the terms of agreement between Hadsphaltic and the Cayman Islands Government regarding a proposed hangar and why $400,000 or 10 per cent of the total cost of the project, which was spent on a mobilisation fee is now having to be reclaimed.
The hangar, which was meant for the Mosquito Research and Control Unit, is about 40 per cent done, as construction halted after Hadsphaltic went in to liquidation in July.
“A standard contract was used for the hangar project. Government generally uses the GC Works series of contracts,” said Mr. Jones, who added, “These are based on the United Kingdom Government’s contracts, which were modified for use in the Cayman Islands some years ago.”
He said the contract used with Hadsphaltic was a “GC Works 2 standard form of contract,” more specifically.
Mr. Jones conceded that no performance bond was used in the arrangement and pointed out that, “A number of jurisdictions don’t use performance bonds on this size of project, utilizing them for projects in excess of five or ten million dollars, largely because of the high cost of bonds.”
However, PWD and the ministry responsible have since reviewed and reinforced their policy on performance bonds. “The ten per cent mobilization payment was part of Hadsphaltic’s tender and was taken into account in the tender evaluation process. Ten per cent is not an unusual mobilization payment in the construction industry for this size of contract,” said Mr. Jones.
The director said the last payment to Hadsphaltic was dated on 24 June, 2010. The company abandoned the site a day later. However, Mr. Jones said the payment was for work that was carried out in June and not the result of an over certified payment to meet budget constraints, that would have come into effect in the next financial cycle.
He also noted that, “It is standard practice where mobilization payments are paid that these payments are recovered over a period of time,” and pointed out that $159,930.93 of the mobilization payments was recouped from the initial payment to Hadpsphaltic, prior to the company leaving the site.
In relation to his expectations about recouping the rest of the $400,000 and whether employees of Hadsphaltic would be among the first to be paid, Mr. Jones said he did not know “if or how the liquidators will prioritise payments to creditors.”
The hanger facility remains unfinished. Public Works Department Project Manager Niasha Ross explained that, “Tenders for the completion of construction have been closed at the Central Tender’s Committee; however, there has been no award of contract to date.”
The 12,403 square-foot hangar is meant to be an all-purpose facility, which would house aircraft, a workshop, paint shop, offices and bonded storage, which is important for aircraft parts, according to MRCU Director Bill Petrie.
“The plan is for there to be a stand-alone pesticide storage and mixing plant, a loading area for the plane, as well as a collection pan to stop any contamination from toxic chemicals used in our operations. It will be hurricane rated and protect our aircraft and generators,” said Mr. Petrie.
The hangar facility was meant to replace the old MRCU hangar, which was condemned after sustaining heavy damage during Hurricane Ivan in September, 2004. Since that time, the MRCU’s operations have been working out of a small trailer and a temporary hanger.