After 26 days of negotiations, Government has settled its differences with Berkeley contractor Pro-Active and announced the new school will be finished by September 30.

Works and Engineering Minister Ashfield DeVent said a settlement had been reached on the company's $20 million claim against Government.

The company felt project specification changes, which numbered over 150, had radically affected the original contract.

Their claim has been reduced to $13 million as Government granted the contractor an extra year to finish the job, making the completion date September 4, 2004.

The original price for Pro-Active's contribution on the project had been $68 million. In total the project will cost $101 million.

The 26 days spent in talks has been added to this date giving a final date of September 30.

Mr. DeVent said work on the site had continued during the talks but the company had felt they had affected progress.

Premier Alex Scott, who was in charge when Pro-Active got the contract, said Government was working with banks to help boost credit for smaller firms on such contracts.

He said: “One of the challenges they have had is access to capital.

“Larger firms have lines of credit that this particular firm didn't have and we as a Government have learned by that experience.”

He said smaller firms should have funds equal to the equity of the contract to carry it out.

Government is in talks with banks to create a fund so any successful bidder for a Government contract would have a fund to draw from said the Premier.

“A credit line has a very large impact on a project like this.”

He admitted design changes, which numbered almost 150, had led to time lost but the Works and Engineering technical officers had resisted them as much as possible.

Such a huge project had thrown them up as work progressed, said the Premier. He hinted that some were because of flaws in the original plans.

“It did delay the project, ProActive may say it delayed it longer than we said it delayed it.”

He praised the work of the Florida engineering consults HR Lubben group for brokering the deal.

The Premier said a performance bond was in place if Pro-Active did not deliver on the contract.

If the company goes over the completion date, it will have to pay $2,000-a-day damages.

More than $5 million of the extra $13 million owed to Pro-Active will be paid in monthly instalments but the 26-day delay from negotiations will come at no extra cost to the public purse.

Mr. DeVent said Pro-Active had agreed to submit their project records to an open audit to substantiate their claim to the remaining $7.8 million.

Two other items of dispute including the company's claim over insurance will go to arbitration.

Mr. DeVent said: “The delays with the second senior secondary school have been a great disappointment to many, as they have been to me.

“However, having said that, I think it is important we set the record straight and tone down some of the rhetoric surrounding the challenges faced in completing this project.”

He said the decision to award Pro-Active the contract had been in keeping with Government's commitment to ensure contracts would be available to large and small contractors.

“Managing large projects often has cost over-runs. The challenges we have faced are not unique. They can and are being resolved.

“We invite the people of Bermuda to reflect on the building of a home, the renovating of a kitchen, the adding of a room to their own house.

“How many of us can say those projects have been completed without additional costs? Certainly this risk is magnified with a project the nature of the second senior secondary school.”

He said Government would allow more overseas workers in to help complete the project if it was necessary.

Asked about his choice of contractor, Mr Scott said: “The contractors won it fair and square, you would have had to be prejudiced against them not to have awarded that contract.”

He said large contracts done under the United Bermuda Party had ended up costing far more than originally planned.

The Tynes Bay incinerator had started at $26 million, said the Premier, but Government had come back seven times to parliament for extra cash leading to a project nearly three times over-budget at $73.7 million.

Westgate prison had started as a $20 million project but that price had been changed five times before hitting $38,854,000, said Mr. Scott.

Shadow Works & Engineering Minister Pat Gordon-Pamplin said the PLP government and Pro-Active have failed the Bermudian people.

She said: “Pro-Active must have known, or ought to have known that they were not capable of completion of this project within the time specified when the contract was bid.

“Government owes them an apology for misleading them into believing that they could do it.

“Government is today boasting their incompetence has only cost the taxpayer an extra $13 million, when it could have been $20 million extra.

“So, the Bermudian public should perhaps think themselves lucky.”

She said the comparison with Tynes Bay was unfair because it had suffered years of delays dealing with environmental challenges until the entire project was changed to a facility more sophisticated than initially planned.

“By contrast, the new senior secondary school had defined plans, a site already acquired for the specific purpose, and needed only to be built. The two sites are incomparable.”