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Stabroek News

Another Sandals Whitehouse probe? - Shaw wants int'l audit
published: Thursday | May 17, 2007


Shaw

Audley Shaw, Opposition Spokesman on Finance, now wants two more probes into the Sandals Whitehouse issue - a financial audit and an international forensic audit.

This call comes after two investigations - one by a local forensic audit team and the other by the Contractor General's Department, and after an inquiry by the Public Accounts Committee of Parliament, of which Mr. Shaw is a member.

It was during examination of the 'final draft report' of the PAC, on its own long-running inquiry, that Mr. Shaw, warning against a "white-wash" of the contentious issue, called for two further examinations of the project.

More clarity needed

Largely rejecting the earlier probes, he demanded even more action on the matter.

"We need to establish whether proper internal controls were established for the project and whether there was adherence to those controls. That is where the forensic financial audit comes in because testimony was brought to this committee to indicate that where there is a failure to have controls, then there is the clear and present possibility that fraud could have taken place".

Just a whitewash

Without a forensic audit, "this report on Sandals Whitehouse will just be a whitewash, and none of us should be signing that report!" he exclaimed.

There was precedent for having an international probe of the issue, he argued, citing the forensic audit team brought in from Canada by the government to investigate the fallout in the financial services sector during the 1990s.

John Junor, government member, voiced strong objections to Mr. Shaw's reference to the possibility of fraud in relation to the hotel project, and dismissed any suggestion regarding another probe, particularly given the cost implications.

"I gather this report by the forensic audit team cost $20-odd million. If I were to cost the time that this committee has sat in here dealing with this matter it would possibly come to more than $20-odd million, given the people's time that we have tied up in this room."

The PAC's inquiry into the Sandals Whitehouse project started last year. So far it has had 24 meetings, and, having heard from all parties involved in the issue, is now preparing its final report.

At Tuesday's meeting, members struggled to achieve consensus on some of the more contentious findings, however, leaving open the possibility that two reports might ultimately be produced - one representing the Government's position on the matter, and the other reflecting the views of the Opposition.

The Sandals Whitehouse hotel, a public/private sector joint venture project, was effectively completed and opened in 2005, but with a net cost overrun of US$43 million. It started with a budget of $70 million but ending up costing $113 million.

The partners in the project - Gorstew Ltd./Sandals Resorts International Ltd, Urban Develop-ment Corporation and the National Investment Bank of Jamaica - were sharply divided as to the extent of the overrun and the portions attributable to each and the reasons for the overrun.

These disputes resulted in the three probes that have been conducted so far, with the possibility of more to come.

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