by Bennette Roach
One of Montserrat’s leading contractor called it “shocking”, that the Government of Montserrat (GoM) has taken the decision to repeal the Statutory Rules and Orders (SRO) No. 11 of 2012 The Public Finance and Management Procurement Rules 2012, which was amended by SRO No. 17 of 2012.
His Excellency Governor Adrian Davis who left the island for his annual vacation last Saturday revealed this when asked earlier in the week. He confirmed, “Cabinet did indeed take a decision to repeal the 2012 procurement regulations,” but declined to give the rationale for the decision made by Cabinet led by Premier Meade, and for which he is chairman.
TMR eventually obtained information after two other cabinet members declined sending us further with the suggestion to ask someone in the Ministry of Finance. One officer however ventured to say that it is because of the number of procurement matters that have landed the government in court. Meanwhile the information while not specific said the Rules were deficient and need a rethink.
Procurement Regulations repealed
The senior cabinet member told TMR that they tried making amendments but found several deficiencies. “We tried making amendments,” he noted as he continued, “but I think there were a number of things that were deficient – the procurement legislation was deficient and when you have a law as rigid as that there are allot of institutional things and procedures and documents supporting that kind of legislation like that, so they just need to rethink it.”
He concluded following discussion, “I would say that there needs to be amendment to the legislation and it needed further work and probably that’s what will happen.
He revealed when it was suggested that sources had informed that GoM was about to spend $70,000.00 to re-write the legislation, the funding for the work would come from European Union technical support to Montserrat. DFID had offered support in training when they critiqued GoM’s capacity in carrying out the Procurement Regulations and guidelines. “This work could be assisted by STTC and will be supported by DFID if a request is made,” the UK funding agency had written in the Aide Memoire cited next.
It is correct that since the Procurement Rules came into being there have been several challenges and TMR have been highlighting that these are because of the difficulty and the deep propensity of the government to simply, not follow rules. The Governor at one time referred to it as possibly “carelessness” following up on DFID who had written, “GoM agreed that an ‘across the board’ review of procurement regulations and guidelines, accompanied by staff training, is a priority,” in their February budget aide memoire.
The Aide Memoire had noted: A number of procurement and contract management issues arose in year which significantly affected the delivery of both capital projects and government services. There appears to be problems with (i) the adequacy of the procurement regulations; (ii) the lack of procurement and contract management guidelines; and, (iii) limited technical expertise in GoM resulting in misinterpretation of the existing regulations as evidenced by delays to Lookout School and the A1 road upgrade.
The general feeling is this last point has been raised several times in critiquing and questioning DFID’s eventual decision to suspend the said road project with that knowledge.
No one wishes to be named, but they raise varying points, that rather than repealing or changing the rules, GoM should seek to adhere to the Rules they agreed to and put into law. Another asks, “Why are they doing this when funding agents require that they adhere to good procurement rules?” And another, “Without proper tendering process, only the selected will win tenders and get work!”
At the time of writing, there are, in addition to the several earlier complaints and threats of legal action, the said Lookout school matters, settled in favour of a contractor, appealed, but now permission is being sought by GoM for reversal at the Privy Council; and, the geothermal preparatory works at the jetty in Plymouth. Added to this is the Montserrat Development Corporation (MDC) project regarding the structures erected in-house suspiciously and pretentiously.
In January this year, GoM issued a release announcing preparatory works for the drilling and the arrival of equipment at the jetty in Plymouth.
It referred to an explanation presented by the Premier in a Statement he delivered to the Legislative Assembly in January, when he challenged ZJB radio reports saying, “incorrect information being put in the public arena without checking its veracity… a recent news broadcast reported that the contractors are raising a tortured cry particularly at the way in which actions have been taken with two major projects.”
He referred to the dredging around the jetty in the abandoned capital Plymouth to accommodate the docking of the geothermal rig for which the tendering process is now being challenged. He said: “…dredging of the jetty area in Plymouth to accommodate the vessel bringing in the equipment was approved by Cabinet in the national interest. This after, the two contractors bids, one bid at $3 million and the other at $0.5 million were rejected.”
He continued to explain: “Discussions were held with the group that had submitted the lower bid. The vessel bringing the rig and materials for the geothermal project was expected to arrive on the 18th of January and it was determined that it was not timely to go back to public tender. Cabinet intervened in the national interest and suggested an approach which was eventually taken. In the absence of this decision, if the vessel had arrived as scheduled, the demurrage cost for the ship along with associated costs would have been in excess of $90,000 per day. It was suggested that retendering would have pushed the works back by over a month which would cost government potentially over $1million.”
He pointed out, “We are not seeking to break any rules here but we are simply using good judgement,” but then admitted, “I will admit that errors were made in tendering process and these are being examined to ensure corrective action is taken for any future tenders. Madam Speaker, when mistakes are made we will seek to correct those errors.”
We have reported that the Premier, joined by the Governor has often complained about people in Montserrat being to litigious, while advising if anyone is not satisfied they may take the matter to the courts. Sources have informed that the matter above is among several that redress is being sought and the question asked, “how can the GoM not admit liability after the Premier’s acknowledgement of mistakes?”
Geothermal and procurement issues
One other problem that may well haunt GoM and DFID, in a different way is the procurement of the geothermal rig for exploring the resource. It is believed that mistakes were also made in the procurement process and that the delay in obtaining or reporting with certainty the results of the drilling to date may be embarrassing.
We have been seeking updated official information on the status of the exploration of the geothermal resource in Cork Hill since the completion of drilling of Well #2.
We recall a GoM release which stated after drilling ended at Well #1: ““The results were very encouraging and it was unanimously agreed to stop drilling and to line the production area of the well. A 7″ steel, perforated, liner pipe was installed from 1,111m down to the bottom of the well (2,298m),” following temperature and pressure surveys that were undertaken in the well by a geophysicist Thorstein Egilson using specialist measuring tools. GoM Geothermal Adviser Mike Allen, Senior Geologist Paul Brophy, Senior Geophysicist Graham Ryan and Geothermal Drilling Project Manager George Scheid had all studied the surveys and a subsequent report.
There is a fear among observers and concerned parties that while it is accepted, that the resource exists in the area drilled, drilling has been insufficient to readily access it, and this is the direct result of improper procurement.
Reliable sources have indicated that GoM, and DFID are currently in discussions as how to proceed in view of some of the concerns already expressed on the geothermal exploration. It is believed that efforts are under way to find a means of expanding on the drilling that had been done so far.
In a Summary of Results from first Geothermal Drilling Well, seeds of doubt were already seen where the report stated: “Preliminary studies also suggested a good likelihood that permeable zones would be reached in the 1500-2000 meter range. However, precise location of these permeable zones is not possible at the current time (in fact, predictions of permeable zones is currently the focus of intense scientific research).
“MON-1 (Well#1) was originally designed to be drilled to a maximum depth of 2000 meters. However, while temperatures were high there was no indication of permeable zones that would allow hot water to flow into the well. Therefore the well was deepened to a depth of 2298 meters a permeable zone was found at 2142 m…”
Since then all the activities at that well and now at Well #2, were designed to carry out: “Temperature and pressure measurements (to be) made over several weeks as the well warms up. When the well is fully warmed it will be ‘flow tested’ for several days to determine how much power it can produce…” That release is dated May 21, 2013, eleven weeks ago. MGPC members are reporting anxiety and are calling for more information and transparency in the progress. “
Some report is well overdue on the findings.
The Iceland Drilling Company (IDC) had been executing the drilling operation, which is being fully funded by the Department for International Development (DFID) as part of its support of capital investment projects aimed at making Montserrat, according to them, more financial independent.
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