Government was yesterday threatened with an injunction which would delay the restart of the new senior secondary school project.

In a letter to Works Minister Ashfield DeVent, Union Assets Holdings, the company holding the completion bond for the project, said that it believed Government unlawfully terminated Pro-Active Management Systems' contract to build the school and that Government had breached UAH's rights as the project's surety.

It said the contract termination had "effectively terminated the employment of all the workers engaged by PAMS at the site" and that Government had failed to provide funds legally due Pro-Active which would have been more than enough to settle the contractor's severance pay obligations.

The letter, which was made available to , was signed by Bermuda Industrial Union president and Government backbencher Derrick Burgess. The BIU owns UAH.

"You also remain in possession of all the equipment and machinery owned by PAMS which equipment and machinery is the subject of a Debenture in favour of Union Assets Holdings."

The letter goes on to say that besides providing the completion bond, UAH became financiers to the project "as the direct result of your practice of arbitrarily shortchanging them (PAMS) on their various monthly applications for progress payments" and that as a result UAH "is now a substantial creditor of PAMS".

UAH is claiming a "common law right to participate in the process whereby an alternative contractor is appointed" to complete the project.

"We are advised that it is highly arguable that UAH has the right to insist on completing the construction works under its own aegis and supervision. Counsel has told us that these rights stem from the fact that, as Surety, UAH has undertaken and assumed ? up to the amount stated in the Performance Bond ? the ultimate responsibility for the costs of completion beyond that which has been agreed between you and the Contractor," the letter continues.

"Yet in breach of our rights as Surety, you appear ? from all the statements made publicly and on the Government's behalf ? to have engaged an alternative Contractor and/or to have embarked on a course for the completion of the project which in no way takes into account our views and input. UAH has simply not been invited to participate. Instead you have repeatedly stonewalled us and insisted upon the exercise of a power which, frankly, you do not possess. These are grave matters for us."

It adds that an "independent" assessment team had been engaged without UAH's participation and "behind our backs".

And the letter reminds the Minister that UAH is a wholly owned subsidiary of the Bermuda Industrial Union which represents all of the Pro-Active's former site workers.

"The BIU has made every effort, short of litigation, to secure from you a commitment to honour these workers' rights in respect of severance and/or redundancy to its workers. In this regard, you have rebuffed and refused every such request of the BIU. You have also, without justification or explanation, refused to pay Pro-Active the sums due them under Valuation 38, a sum considerably in excess of that which Pro-Active needed to pay severance and/or redundancy to its workers."

It concluded that UAH believed that Pro-Active's termination was unlawful and that their success at arbitration will mean that their completion bond obligations will be "rendered null and void".

But it demands that Government provide written assurance by end of business today not to engage an alternative contractor or restart construction on the site, or face an injunction.

When contacted, a Pro-Active spokesperson would only say that the company was aware of the letter.

Mr. Burgess declined to comment, as did Mr. DeVent who said that since the matters may be heading to arbitration it was not appropriate to comment.

Government terminated Pro-Active's contract last month ? a controversial decision which strained relations between the ruling party and the BIU.

This week, Government announced that Canadian consultants Halsall Associates had started assessing the site to determine what work had been done and what work ? including any remedial work ? remained to be done.

It expects Halsall to complete its work in a week and plans to put the remaining construction work out to tender shortly thereafter.

?Almost three quarters of respondents to a online poll agree with Government's decision to cancel Pro-Active Management Systems Ltd.'s contract at the Berkeley site.

The poll, on www.theroyalgazette.com, asked: "Was Government right to cancel Pro-Active's Berkeley project contract?

Of the 836 people who responded:

74.2 percent said "yes";

14.6 percent said "no"; and

11.2 percent said they did not know.