Herzog Caribbean Construction is threatening to file a law suit to collect millions owed the company for pavement they provided to the Turks and Caicos Islands (TCI) government during the period 2006 through 2008.
This appears to be the hot asphalt surfacing Herzog installed on North and Middle Caicos during this period.
When British direct rule came to the islands in August 2009 it was learned that Herzog had previously submitted invoices totaling $13 million. Later reports indicated the amount due was $16 million. While it is unclear which figure is correct, Herzog is now asking for $13 million.
When a stop gap loan was put in place last year some contractors received partial payments, which may account for the reduction from $16 to $13 million. In fact, it has been reported that a 2009 payment plan was in place but has not been maintained.
Late in the Progressive National Party (PNP) government, after Premier Michael Misick resigned, it was discovered that millions more in unpaid invoices were hidden in office drawers. This was revealed by then financel minister and deputy premier, Royal Robinson.
Robinson himself had drawn attention when it was learned that he was receiving a $10,000 honorarium from a proposed vendor to the new national Health program. The honorarium payment(s) to the minister were revealed on the financial disclosure statements Robinson filed.
At that time, the Commission of Inquiry had been completed and lack of financial disclosures by the previous government of which Robinson was part were an issue. In fact the, Interim administration continued to employ Robison as liaison officer for the hospital construction until early 2010. Robinson had previously been assigned responsibility for the Provo dump site which remains an unresolved issue.
While the Herzog-installed pavement is the best seen to date on the islands, it has also been the source of complaints by many.
In the area of North Caicos approaching the Causeway between North and Middle Caicos, the previously unpaved roadbed was filled and raised in the area that had previously often been submerged. However, the new elevation appeared to be insufficient, as the new pavement floated away, disappearing from much of a two-mile section when the wet storm Hanna visited in August 2008. While the damaged sections are in some places a quarter-mile inland from the shore, the roadbed is only slightly above sea level at average tide levels.
The pavement was not provided with any berms or shoulders, making drop offs at every business and residential driveway. In some cases, this has caused the pavement to break away as vehicles enter and exit the road.
It is unknown if a specification was issued by the Ministry of Works to control the quality of the road. Jeffrey Hall was the minister of works during that period.
Late last week, it was learned that the interim government is negotiating with the contractor to hold off their legal claims while payment arrangements are being negotiated. While initially Herzog was represented by the law firm of Misick and Stanbrook, the interim government is being addressed by attorneys from Dunn and Davison on behalf of Herzog.
The pavement installed by Herzog and the stadiums were the only significant public works projects completed under the six-year administration of the Progressive National Party.
During the years PNP ruled the TCI, over $700 million of normal reoccurring revenue, $243 million of Crown land sales, $201 million in stamp duty collected and $28 million in grants and cash left over from the previous government run by the Peoples Democratic Movement (PDM) were spent. However, an additional $135 million of debt was run up by the PNP.
