Information about two housing developments involving the Saint Lucia National Housing Corporation (NHC) and local company Fresh Start Construction Company Limited are slowly emerging following the cancellations of contracts the former had with the latter.
Questions were raised about the accuracy of some of the assertions of Housing Minister Richard Frederick when asked to justify the cancellations of the contracts.
The Minister revealed that there were no planning approvals for the two housing developments located at Talvern, Babonneau and Choc with the NHC being the landowner and Fresh Start the developer.
A report by HTS NewsForce revealed that the Talvern development had been approved by the Development Control Authority and that Ministry of Planning officials confirmed both developments were approved and not started illegally.
Frederick was quoted on HTS as saying that “Both of the developments were started illegally and once you start an illegal development you do it at your own risk.”
He was then asked: How is it illegal? He replied “Because there was no DCA approval for either of them.”
Fresh Start has since put out its own statement claiming that the agreements which have since been terminated were to develop lands vested in the NHC’s name at Choc Estate, Castries, and at Talvern, in the quarter of Babonneau.
“The termination notice was received by Fresh Start from the NHC on December 10th, 2021. It was an unexpected and sudden turn of events after two years of development work and constant communication between Fresh Start, the NHC, and all relevant agencies,” stated the company.
Saying that it sought direct clarity from the relevant agencies and that it attempted to reach an amicable resolution, recent announcements (with limited, selective details) had circulated with far-reaching ramifications, therefore it found it necessary to address some points of concern with the hope of clarifying certain points that will cease the spread of inaccurate information.
The company said it entered into two standard Public-Private Partnership (PPP) Development Agreements with the NHC and that in the construction industry, it is standard for Development Agreements to include Terms, Conditions, and other clauses. All parties involved had complete awareness of the conditions detailed within the agreements.
“Through the NHC, The Development Control Authority approved the Choc Development Application on August 14th, 2019. This was communicated in writing. The Agreement for the Choc project was officially signed on December 30th, 2019, and later amended on May 18th, 2020.
“Through the NHC, The Development Control Authority approved the Talvern Application on February 5th, 2020. This was communicated in writing. The Agreement for the Talvern project was officially signed on September 7th, 2020. Under this project, 38 of the 131 lots have been lodged and accepted by the Land Registry Survey and Mapping Section of the Ministry of Physical Planning,” the company stated.
According to Fresh Start the signed Agreement, and as further explained via formal letter to the relevant parties, the conditions of this arrangement were that the NHC provides bare lands which Fresh Start would develop into serviceable lots with all amenities.
Fresh Start agreed to finance the entire infrastructural works and developmental costs which were estimated at EC $40 million. The repayment terms established that lot sales would be split between Fresh Start and NHC on an 80/20 basis until Fresh Start recovered the full extent of its investment (estimated $40 million).
“To clarify, once the initial investment was recovered, all sales thereafter (at the NHC’s set prices) would inure to the corporation. This agreement allowed the NHC to benefit by profit while Fresh Start’s initial investment (estimated $40 million) was recovered,” noted Fresh Start.
The company said that the true cost of this sudden termination is its impact on the people of Saint Lucia. And that Fresh Start’s unique construction model focuses on outsourcing, up-skilling, and employing and involving not only people, but various service providers and communities.
The company further claimed that the termination of the Choc and Talvern Development Projects resulted in the loss of income to 220 direct workers, 20 sub-contractors each with an average crew of 12, sixty truckers, equipment operators, mechanics, cement operators and that food vendors associated with these projects lost a monthly average of $50,000.00 a month
The company said that once it received the termination notices it complied fully.
“We have demobilized; all equipment has been removed, the sites and keys were handed over to the NHC,” noted Fresh Start, adding that it finds itself in a position where it is forced to recover its investment before the sale of lands and that on December 22nd, 2021, detailed claims for both projects were submitted to the NHC. These claims include costs associated with work done as well as Termination Damages.
“Notwithstanding this unfortunate turn of events, Fresh Start has offered the assurance that it remains committed to continuing work with the Government of Saint Lucia and its agencies that are engaged in the development of the island,” stated the company, adding that it remains open to constructive discourse regarding the matters listed.