Mounting debts and poor financial management at the new $70 million secondary school development are to become the focus of an internal review, Works and Engineering Minister Alex Scott said yesterday.

The Minister said after several days of meetings and discussions between his department, general contractor of the site Pro-Active Management Systems Ltd and angry sub-contractors, he believed all debts would be paid off within the next few days.

The Royal Gazette reported yesterday how many sub-contractors and suppliers had refused to continue with the massive school project after Pro-Active had repeatedly refused to pay them what they were owed.

And two weeks' ago, Pro-Active workers on the site were given their pay cheques late, only then to find them bounce when they tried to bank them.

It is believed Pro-Active owes hundreds of thousands of dollars to its sub-contractors, with some claiming they were owed more than $200,000, and refusing to return to the job until their bills were paid.

Mr. Scott refused to say yesterday whether Government would be paying off the bad debts, but he said he believed a resolution had been found and hoped everyone would return to the site next week. And he hinted that a new management company would be brought in within the next few days to take over the construction site, rumoured to be Somers Construction, although Pro-Active will remain on the project in a subsidiary role.

"All credit concerns will be addressed," said the Minister yesterday.

"We are going to ensure that everyone who is entitled to be paid will be paid. But that's not to say Government will do it.

"A resolution has been reached. Out of the resolution will come the explanation that we seek. There certainly will be, I am sure, some accounting taking place so that what ever goes forward does so with the full appreciation of what's happened in the past.

"But I would not want to use words like `inquiry'."

Mr. Scott said through the discussions this week, a new timetable was also to be drawn up for the site, which is lagging way behind its completion deadline of September this year.

However, he refused to say when the new deadline to have the project completed would be.

"These meetings have led to a position where the credit concerns and debts to sub-contractors will be addressed," added the Minister.

"It's now just for us to confirm those details and then make public the new position."

But asked whether Government was now taking over the financial running of the site, Mr. Scott said "that would not be correct".

Mr. Scott refused to say whether a new management company would be going onto the site this month, but said Pro-Active would still be working on the site in some capacity.

He said: "I won't talk about whether Pro-Active is in charge of the site. I would like those who are going to play a role in the future to be present."

The development, on Berkeley Road in Pembroke, has been plagued with controversy and problems since Pro-Active was awarded the huge job in May of 2001.

Government first faced fierce criticism for awarding the project to Pro-Active as people said the company had little experience or reputation for such a big development.

However, Pro-Active also put in a bid for the job at $68 million, when BermudaTech bid $65 million.

It led to people claiming that Pro-Active had only been given the tender because its key people were supporters of the ruling Progressive Labour Party, but the Works Minister said throughout that Pro-Active had won the job because its bid was the most responsive.

BermudaTech workers marched on Parliament in protest of the tendering decision, but then last year BermudaTech went into liquidation while carrying out refurbishment work for Government on Spice Valley Middle School.

Auditor General Larry Dennis carried out an audit of the Berkeley site last year, which revealed that the development was massively behind schedule.

However, he also questioned the viability of the $6.8 million performance bond put up by Union Asset Holdings Ltd, which is owned by the Bermuda Industrial Union, as a means of insurance and guarantee for Pro-Active working on the project.

If Pro-Active is discharged of its position running the site next week, and additional costs have accumulated, then Government may need to call in the performance bond to meet the shortfall.

While the Minister has said the bond can be called in if needed, others have raised doubts over its authenticity.

But despite everything, Mr. Scott yesterday said he had no regrets about the project at all.

He said: "I have no regrets. Remember now, we have not completed that building. I'm still keen to have that building completed at the earliest possible time.

"We took a decision - the contractor won fair and square. There is an irony involved in that even if we had gone to the company that was second in line (BermudaTech), we would still have been in difficulty because that company also went into liquidation.

"It's a very difficult industry."

However, Mr. Scott said he did not mean that Pro-Active had gone into liquidation, merely that it had also ran into trouble.

And he added: "For the future, all those involved in the project will be very happy they are on board. I hope that everybody will be back on board in the next few days."