Maxcem Bermuda Ltd.'s lease for the Dockyard Cement Facility will be extended until the middle of next year despite the contract not being put out to tender by landlord West End Development Company (Wedco), The Royal Gazette can reveal.

The company, which is headed by Dennis Correia and has been running the facility on a six-monthly renewal basis for the past two years since taking over from Jim Butterfield and his company Bermuda Cement Company (BCC), looks set to continue operating the plant until at least the end of June 2010, according to answers from Works & Engineering Minister Derrick Burgess in response to parliamentary questions from Opposition MP Patricia Gordon Pamplin in the House of Assembly on Friday.

A representative of rival bidder Island Cement has also told this newspaper that Mr. Burgess had promised to put out the deal to tender in the summer of this year, but that this failed to happen.

Meanwhile the parliamentary answers revealed that Wedco now has no plans to require the existing buildings and silos on the site to be demolished or rebuilt at a different location — which was part of the requirement for BCC to fulfil if it wanted to keep the contract. When asked whether the lease, which is due to expire at the end of 2009, would be re-tendered within the next year, Mr. Burgess said current leaseholder Maxcem would have its lease extended to June 30, 2010.

UBP leader Kim Swan, who was also present at the debate, said this matter may never have come to light if the questions had not been raised in Parliament.

"They have offered an extension, but while making a decision in a half a year's time it almost seems that if these questions had not been answered they could have just moved on with ad infinitum extensions," he said.

"The most revealing answer of all is the one that pertains to the silos which will remain where they are. I find it bizarre that Jim Butterfield and his company were basically turfed out, and that is putting it kindly, and to see that the company that took it over have not done what he was asked to do — that is just wrong.

"I am concerned that we have had these types of instances in other areas in Bermuda and it does not follow good business practice — it is ethically wrong and it certainly does not paint Bermuda in a good light from a business perspective."

Mr. Swan reckons that this is just the tip of the iceberg and he had many examples of where individuals and businesses had been wrongfully treated by Government, in terms of putting contracts out for tender, handling deals and overspending on major projects.

"That is not how I want my taxpayers' money spent," he said. "The tendering process needs to be above board and Government must be transparent and accountable for its actions."

Island Cement put in an application to run the facility at Dockyard after an offer to join forces with Maxcem to lease and operate the plant was rejected, but heard nothing from Government since submitting the proposal in June last year.

Previously Island Cement's offer to buy all of Maxcem's Bermudian-owned shares was initially turned down and Maxcem's major overseas shareholder partner at the time, Cemex, had also rejected Maxcem's counter-offer to allow Island Cement to buy a minority stake.

Island Cement is backed by major shareholder the Bermuda Industrial Union which has a 20-percent share in the company. The company had ticked all the boxes for Government's requirements for a 100-percent Bermudian-owned and operated company, as well as fulfilling its mandate for black empowerment.

Myron Piper, who was the president of Island Cement at the time, said he went to Miami with Wedco chairman Walter Lister to look at potential suppliers Titan Cement and he met with the shipping company in Port Everglades.

However he revealed that Island Cement had disbanded after Mr. Burgess reneged on assurances that the contract would be re-tendered, as the company had already set up supply deals with Titan Cement, but lost its credibility as a result of not being able to bid for the contract.

"Correia is getting a free ride once again, while everybody else is being discredited in the process," he said.

"This Government is a black government that stands for black empowerment and yet there are no real benefits to the average black person here. I find it is extraordinary what has happened here considering that Derrick Burgess was once the union leader."

Mr. Piper added that he has contacted Mr. Burgess and Mr. Lister to express his interest in putting forward a proposal and had parties interested in supplying cement to Bermuda and was waiting to hear back from them.

"I am still hopeful that there is an open bidding process and that there is an opportunity to compete fairly for the contract," he said.

Jim Butterfield, former majority shareholder, along with six other shareholders of BCC, which had been operating the facility at Dockyard for 40 years, agreed to sell their stakes in the company to construction boss Mr. Correia, giant cement manufacturer Cemex, Christopher Shanks and Paul Simons after five years of protracted discussions.

As of January last year, Mr. Correia was the majority stakeholder in the new company Maxcem with 48,000 shares, followed by Cemex with 46,353 shares, while Mr. Shanks owned 10,800 shares, Mr. Simons 2,745 shares, Michael and Anette Bierman 5,622 shares and 3,815 shares respectively, SAL Ltd. 2,019 shares and Fiduciary Partners 646 shares, according to Register of Shareholders records.

Mr. Butterfield decided to sell up because he thought it was too expensive to meet Wedco's demands to demolish the silos and rebuild the plant at a new site.

Government did not respond with a comment by press time.