PM: UNC ducking questions on OAS highway contract

THE UNITED NATIONAL CONGRESS has questions to answer on the multi-million dollar contract with the Brazilian firm, Construtora OAS SA for the Solomon Hochoy Highway extension project, says the Prime Minister.

In a statement posted to his Facebook page on Wednesday, Dr Rowley said the $850 million arbitration award to OAS was stopped and taxpayers' money recovered.

"Today, Wednesday, December 14, 2022, the High Court ruled in favour of the taxpayers of Trinidad and Tobago, in a matter being contested between state-owned NIDCO and OAS, the contractor hired to build the Highway from Golconda to Pt Fortin.

"...The decision of the arbitrator was appealed. Today the taxpayers (Nidco) won that appeal and a payment of $921 million that was to be paid to the contractor, has been stopped. Today taxpayers’ money has been recovered."

On Wednesday, Justice Frank Seepersad set aside the arbitration award and sent the issues raised by Nidco back to the arbitration panel for their reconsideration.

The partial award to OAS was made on April 16 and the tribunal ruled that Nidco must pay OAS a total of US$126 million ($857 million) and this could have increased by an additional $100 million in legal, professional and other fees.

In his statement, Rowley said to protect taxpayers there was a clause in the original contract that required, in the event of bankruptcy on the part of the contractor, the insurance bonds securing the contract, would go to the client, in this case, Nidco.

"During the execution of the works, the contractor went bankrupt (judicial management) in Brazil amidst widespread allegations of corruption," Rowley said.

He added, "TT taxpayers must take note that on the last working day before the general elections of 2015, (September 4th, 2015) the then Government secretly and mysteriously removed the relevant clause which protected the taxpayers’ interest in this billion-dollar project.

"The result of this removal of the bankruptcy clause in the contract was that the contractor was allowed to leave with almost $1 billion of taxpayers’ money.

"Had there not been a change of government, this secret gift to a foreign contractor would have gone unnoticed by the people of TT," he said.

The Prime Minister said after entering office in September 2015, the PNM administration discovered "this travesty" and took immediate, firm legal action in the courts abroad to recover taxpayers' money.

He also provided a history of the matter through the courts: "Nidco won the matter and nine hundred and twenty-one million ($921 m) dollars were returned to the state company on condition that it be used on the project. This victory allowed the stalled highway to Point Fortin project to be restarted and is now close to completion."

OAS, he said, subsequently, "resorted to arbitration and after that process, the adjudicator ruled in favour of the contractor."

"It is interesting to note that when this happened, the UNC parliamentarians, some of whom are the same people who have questions to answer with respect to the removal of the clause to give the contractor taxpayers’ money, were loud in their demand that we pay back the money to the lucky contractor.

"They sang and danced with glee as they berated the Government’s effort to obtain and defend almost one billion dollars that they gave away.

"The former Leader of Government Business in the Parliament, the member for Oropouche East, called for Rowley and Young to be held personally liable for the successful arbitration which favoured the contractor."

Now, the Prime Minister wants the Opposition to say what was the reason for removing the clause "that created this gift" to a contractor and who authorised this removal of the clause.

"Why have the UNC minister of works and the UNC prime minister never responded to these questions which I have been putting to them continuously since 2015?

In matters of this nature, silence is not an appropriate option for a population to accept," Rowley maintained.

In its decision on April 16, arbitrators John Fellas, Adam Constable, KC, and Andrew White, KC, upheld OAS’s arbitration claim against Nidco and ordered US$126.3 million in compensation.

In the 223-page ruling, the arbitration panel ruled that Nidco was wrong to have terminated the contract on the basis of the two main grounds it claimed.

In the arbitration proceedings, Nidco claimed Construtora OAS effectively abandoned the project in late 2015 after it slowed down work, dismissed most of its staff and became insolvent by letting debt accumulate to suppliers and contractors.

The company denied any wrongdoing, as it claimed that the issues raised by Nidco were due to the fact that Nidco failed to make a major interim payment under the contract.

It claimed that at the time of the termination, it had injected a further US$ 31 million into the project and had renewed its performance and retention bonds.

In upholding OAS’ case, the arbitration tribunal ordered that it should be paid US$127,072,326 in damages, minus the US$706,426.70 offset granted to Nidco. The damages represented the company’s claims for performance and retention securities, a series of unpaid interim payment certificates (IPCs), materials in stock, temporary works and contracting equipment.