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‘$50m. molasses deal’


Opposition senator and candidate for St. James Central, Kerrie Symmonds, has produced “new evidence” which purports to show that the Government contract awarded to Preconco Limited to build three new molasses concrete tanks at the Bridgetown Port, was actually a $50 million commitment.

Kerrie Symmonds (File photo)

During a news conference this afternoon at his Roebuck Street law offices, Symmonds distributed copies of a document titled Proposal for the Provision and Lease of Pre-cast Concrete Tanks for the Storage of Molasses at the Barbados Port.

The five-page document, bearing the name Preconco Limited and signed by Mark Maloney, Managing Director, was dated June 18, 2012 and addressed to Minister of Agriculture, Dr. David Estwick.

Symmonds was responding to Estwick, who, during a news conference last week, had rejected an earlier suggestion by the Opposition senator, that Government was guilty of squandering public funds through its decision to build three new concrete molasses storage tanks at the port, for $12.2 million, when it could have rebuilt one and repaired the others for $2.9 million.

Estwick had also insisted that it made more economic sense for Government to accept the Preconco proposal – instead of the less expensive Williams Industries one – because, even though Preconco’s capital cost was $12.2 million, the concrete tanks would last upwards of 90 years with zero to negligible maintenance costs.

On the other hand, the minister had argued that the proposal by Williams Industries to build one steel tank for $4 million, plus an annual maintenance cost of $34,000, with a life span of 20 to 30 years, did not add up.

However, Symmonds told reporters today, it was a matter of deep regret that the minister, in citing the cost of the three new concrete tanks as being only $12.2 million, failed and neglected to inform Barbadians that on June 18, 2012, Preconco Limited issued their financial proposal to the Government.

“That proposal specifically states that Preconco Limited will manufacture and install the required tanks at a cost of $12.2 million. Thereafter, however, Preconco Limited will enter into a lease agreement with the Government in which the said tanks would be leased from Preconco,” the BLP candidate pointed out.

Outlining the terms of that lease, he observed it would run for 20 years, could not be cancelled and the annual lease payment would be $2.1 million, plus VAT, adjustable only according to any variation in the local commercial bank prime interest rate, against which the lease would be benchmarked.

“In failing and neglecting to disclosed the fact of a 20-year financial commitment at an average of $2.1 million per year, Minister David Estwick misled and misinformed this country about the … nature of what is actually more than $50 million commitment to build three molasses tanks, when one tank could have been replaced and the other two existing tanks repaired and made fully serviceable for another 10 years at the cost of only $2.95 million.”

Symmonds also rejected the minister’s justification for accepting Preconco’s proposal based on the fact that the concrete tanks would last for between 70 to 90 years. His view was that nobody, anywhere in the world, stored molasses in concrete tanks, because the acidity of the liquid would eat away at the concrete.

The Opposition parliamentarian’s main grouse, was that the Government was spending too much money at the wrong time, that is, when the country could ill afford such spending. (EJ)††

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