Government mum on OAS arbitration ruling

GOVERNMENT remained mum on Tuesday on the outcome of arbitration proceedings against Brazilian construction firm Constructora OAS SA.

On Monday, during his contribution to the motion to adopt the report of the Standing Finance Committee in the Lower House, Opposition MP Dr Roodal Moonilal spoke of the April 16 partial final award of the three arbitrators and the Government having to pay the arbitration award of US$126.3 million.

On Tuesday, Attorney General Reginald Armour, SC, and Minister in the Office of the Prime Minister Stuart Young did not respond to Newsday’s questions on the arbitration matter.

Moonilal asserted the recent ruling in favour of OAS over the wrongful termination of a contract on the Point Fortin to San Fernando Highway would see the Government having to pay TT$1billion in damages.

He accused the government, which was a party in the matter, of deliberately hiding this development from the public.

A document purporting to be the disposition page of the ruling said the tribunal had ordered the National Infracture Development Company Ltd (Nidco) to pay OAS a total of US$126265,899.30 “based on the damages and offset determined by the tribunal.”

In a table, under heads of damages/offset/ and amount, the bulk of the award of US$93.2 million was for performance and retention securities. Over US$22.9 million was for sums unpaid for a number of interim payment certificates; US$5.2 for materials in stock; temporary works and contractor equipment totalling a little over US$5.2 million.

The total award to OAS, of US$127 million, was minus US$706,426.70 awarded to Nidco under the heading "Offset for damages."

The purported award document also said the tribunal reserved its decision on OAS’s claim for damages on the ground that Nidco was overpaid when it seized the bonds in connection with the advanced payment deductions and the award of interest on the sums awarded, on sums sought on the advance payment and cost, pending further submissions.

The document also noted the tribunal denied all other claims, counterclaims and claims for offsets and defences.

The purported document bore the signatures of the three arbitral tribunal members.

The government had hoped to recover the $1 billion from OAS.

Nidco has also declined comment on the issue.

During his presentation of the 2017 budget, Finance Minister Colm Imbert told the Parliament Government had made significant progress in “untangling the mess left for us on the Point Fortin highway project.

“OAS’s contract has been terminated and so far, the National Infrastructure Development Company, Nidco, under new management and direction, has already recovered $670 million in 2016 in letters of credit and bonds from a number of banks that had provided guarantees for OAS.

“A further $250 million is being actively pursued by Nidco’s lawyers in the courts in London,” he said then. OAS was awarded the highway contract under the People’s Partnership government for $5.3 billion.

Imbert said with the funds in hand, Nidco was in a position to resume construction work on the project.

In August 2021, Nidco said the highway was almost three-quarters done.

In January, the Mosquito Creek segment collapsed.

Meanwhile, Young did not respond to queries for a progress report on the commission of enquiry into the acquisition of land for the highway extension project. On Friday, during the sitting of the Standing Finance Committee, he referred to the capping of fees for the commission, chaired by retired justice Sebastien Ventour, who will be assisted by attorney Gregory Delzin.

The commissioners were sworn in in July 2019, and in April, Newsday was told they were preparing to begin hearings, although a date was not finalised.

The terms of reference of the commission include finding out whether the the ministerial oversight committee for the project fulfilled its mandate, and steps taken to acquire properties for the project.