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Stonington tender

Last year, when this newspaper revealed that the lease for the Stonington Beach Hotel had been substantially renegotiated to the benefit of the successful bidder, it was accused of politicking and trying to tilt the 2003 General Election.

Now that the Auditor General has released his special report on the tender process for the hotel, now the Coco Beach Hotel, this newspaper has been vindicated. Not only were the facts reported by the story proven by the Auditor General, but the issue raised by the stories has also been justified.

On that basis, this newspaper deserves an apology from Tourism Minister Renee Webb, who attacked it for simply doing its job, not that it expects to get one since the current Government has never apologised for anything.

The issue raised by the Stonington tender is fairly simple. Imagine if you were selling a house, and even offered to help to finance the sale. You chose what appeared to be the best bid. Then the successful bidder started to lay down new conditions, including a longer period of time to pay for it, new shutters, a fresh paint job - and a lower price. At some point, you would say: “This is ridiculous. This is not the offer I accepted and I can get a better deal from the bidders I turned down before.”

At that point you would put the house back on the market, or go back to the unsuccessful bidders.

That would be a rational response. And this is what did not happen in the case of Stonington. Coco Beach owner John Jefferis and others put forward a number of proposals to lease and manage the hotel. Mr. Jefferis was selected and then renegotiated the deal and secured more favourable terms than he had proposed originally.

Auditor General Larry Dennis said in his report: “The differences outlined are so numerous, and their impact so financially material, that the lease is a substantially different product from that (originally) envisaged.”

Mr. Dennis added: “For these reasons, I do not believe that the lease letting meets the test of fair, open and without restrictive practice envisioned by Financial Instructions. If bidders on Government contracts are not satisfied that their bids are treated in a fair and open manner, they may not in future waste time and money submitting bids. This may lead to reduced competition and higher Government costs.”

Mr. Dennis is right. Two separate issues are raised by the Stonington lease. The first is that there is no way now of knowing if Government got the best value for money because it is impossible to know what the other bidders would have offered if they had been given the same leeway in renegotiating the terms.

More importantly, the renegotiation makes a mockery of the Government tendering process, at least when it is used. As Mr. Dennis says, why would anyone bother to go to the time and trouble of bidding for Government contracts when the winning bid can be rewritten afterwards?

The Stonington bid is not an isolated case. The West End Development Corporation did not even bother to seek bids for $6 million worth of repairs to the cruise ship wharf at Dockyard.

The Cabinet overruled the technical officers in the Works and Engineering Ministry in giving the Berkeley project to Pro-Active Construction and that construction is now at least a year late and $13 million over budget.

Finance Minister Paula Cox denied on Friday that there was any political interference in the bidding process. In Shakespeare's words, she protests too much. No one has suggested that there was political interference. The issue is that the tender process, which should be open and fair, is closed and unfair and has failed to get value for money for the public.

It seems obvious that the tender should have been put back out to bid when Mr. Jefferis began changing the terms. But it was not and will not be because this Government is arrogant enough to believe that it can do what it wants when it wants and is answerable to no one.

And who can blame them? Last year the Government was re-elected in spite of running a non-campaign, the Housing Corporation scandal, the Berkeley project and, of course, a grand deception over its own leadership which was then overthrown within days of the General Election.

Given that, it does not even bear thinking that it would admit an error over Stonington. Perhaps a country really does get the government it deserves after all.