From John Clennett, former States Treasurer.
I CANNOT be the only person to be completely gobsmacked after reading the account of proceedings in the States when the Assembly was debating the financial aspects of the Waterfront proposal.
Here we have the States debating the biggest financial venture ever undertaken by the Island, at least in recent times, and one which could cripple the Island’s finances if it were to go awry.
The proposition was introduced by the Chief Minister in glowing terms. He claimed that thorough checks had been done on the company and that Price Waterhouse had also done checks on the company and their report was a glowing one, ‘low gearing and dynamic’.
During the course of the debate one member asked if it was true that the company was involved in legal problems in the USA and elsewhere, a suggestion which the Chief Minister categorically denied. On the basis of this assurance the matter eventually went to a vote and was overwhelmingly approved. Shortly afterwards the Chief Minister had to make a statement that he had been ‘misinformed’ and that the developer was in fact involved in a lawsuit or lawsuits.
So what happens now? Does this mean that the States decision was taken on the basis of incorrect information? In the light of all the inquiries they say they have made how is it that the Chief Minister and Senator Perchard (member of WEB) did not know the full circumstances of the developer?
Did the chief executive of WEB (imported because of his knowledge in the field) not know what was happening in regard to the developer? If he knew why was the Chief Minister not informed? If he did not know why not?
It appears also that Price Waterhouse’s report was quoted selectively as it also seems to mention ‘the need for caution as the bulk of the group’s asset base is not liquid’ and this was written before the credit squeeze.
The debacle on Victoria Avenue has been described as a major failing but it pales into insignificance beside this one and its possible long-term repercussions on the Island.
In his apology to the States the Chief Minister attempted to alleviate the damage by claiming that there is really no need to worry because the States will have performance guarantees. The sum of £95 million was mentioned.
It is generally well recognised that while performance guarantees are useful they are by no means a total protection against a contractor failing to complete. Indeed, the total cost of a contractor failing to complete a major scheme can be astronomic taking into account the problem of finding another contractor willing to complete the work, the bargaining over prices, the delay, legal costs and continuing disruption. If a developer went bust during the construction of the tunnel one cannot imagine the consequent mayhem.
Have there been any suggestions of resignations? Surely a simple apology on the basis of ‘nobody told me’ is not adequate?
Couelle Cottage,
Le Coin,
St Ouen.
