LAST week, I stated that, in my opinion, the leaked Technical Audit of the St. Jude Hospital Reconstruction Project was a worthless document as it does not provide us with an assessment of value for money spent on construction, neither does it advise on suitability for purpose of the structures erected.
The report comments on some supposed deficiencies in architectural design, in electrical and plumbing installations, and on fire safety issues. None of the deficiencies described seem, however, to be fatal to the project, the architectural concerns seeming to centre on the result of a design which respected the former buildings’ footprints.
In fact, the “Conclusion” of the architectural review contained in that Audit states that there is “great value present in the works completed to date”, that “the project is salvageable”, and that it “could be converted into a facility that can properly serve the needs of St. Lucia”.
Yet, the overall finding of this Audit is that “the construction be further suspended, a master plan developed and align (sic) the existing facility if possible with that plan …” for which EC$100 million, or a sum nearly equal to that already spent, will now be required.
To put the Audit report into context, the review of the building site, architecture of individual buildings and assessment of the mechanical, electrical and plumbing systems, together with a commentary, occupy 17 pages of a report comprising 186 pages. Much of the remainder of the Audit is devoted to an examination of the performance of the design and supervision consultant, and to the procurement of works, (contractors, sub-contractors, and goods). The report makes serious allegations in these areas.
While in hindsight the procurement of the St. Jude Hospital reconstruction works has not been perfect, the solution now proposed is ludicrous as, anticipating significant delay in implementation of the Audit’s proposed phased approach to “completion and reconfiguration” of the hospital, the Report recommends that a design/build approach be adopted. Now the very issues of Government oversight and procurement rules which the Audit supposedly highlights are to be subsumed by a contractual approach, design/build, which relieves the Government of any authority over those issues.
A design/build approach would be acceptable in a competitive environment where tenders were invited, but a tendering process would defeat the very justification that the Audit provides for this approach – the minimization of delay. With St. Lucia not having any design/build contractors with specific hospital expertise, where is this contractor to come from?
But the final recommendation of this Audit is startling as it is prefaced by a reference to the FIDIC contracts, indicating that, unlike its 1999 successor, the 1987 FIDIC document does not allow termination of the contractor by the Employer without cause. The recommendation is then: “Therefore subject to advice from the Attorney General, all existing works and supply contracts should be terminated or negotiated out of (sic)”.
The conclusion that might be drawn from this recommendation is that were those contracts made under FIDIC 1999, then the “termination without cause” clause would have been applied. But a following phrase in that very FIDIC 1999 clause states that, having terminated without cause, the Employer cannot then proceed to complete the works on his own, neither can he engage another contractor to undertake those works. This, however, is precisely the approach recommended by that Audit report – termination, then completion of the works by others.
That Audit Report first misdirects the Government on termination, but then passes responsibility for executing its recommendation to the Attorney General. From the quotation above, the Report also offers the alternative of negotiating termination with the contractors but, in either case, termination will first require payment of all contractors’ incurred costs, and then negotiation of their loss of profit claims, an expensive process.
But the construction works have been suspended for the last 10 months, and contractors’ costs are mounting. With the consultant already terminated, there is no possibility of an early re-commencment of this project although we have now spent EC$920,000 to justify this state of affairs. Except that there is also no justification, as the Audit Report has not been made public. Yet that Report confirms that the project can be “salvaged”.
In my view, the only sensible statement made recently regarding St. Jude Hospital has come from the Chairman of its new Board. He has made the point that the patients of the south of the island are suffering because of the unavailability of the new facility, and that it was time to begin the process of transferring them from the current makeshift facility at the George Odlum Stadium to the new hospital.
A hospital is about people, not contracts.
Next week, we look at how we got to this.