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Berkeley Institute arbitration subject to gag order

Opposition MPs have renewed calls for an arbitration hearing between Government and the contractor initially hired to build the new Berkeley Institute to be held in public.

Shadow Finance Minister Patricia Gordon-Pamplin said yesterday that the decision to hold the proceedings in private was ?a slap in the face to the taxpayer?.

Jon Brunson, Shadow Works and Engineering Minister, added: ?We are talking about public funds.?understands that Pro-Active Management, the company originally awarded a $68 million contract for the secondary school, is expecting a settlement of no less than $13 million.

The firm was hired by Government in 2001 to build the school by September 2003. It was given a year?s extension and another $13 million in February 2004 but was sacked later that year with the building more than 80 percent complete.

Pro-Active decided to sue the Government for wrongful termination with the latter counter suing. The arbitration proceedings ? aimed at resolving the conflict out of court ? are understood to be about to start, with a gagging clause preventing either party from speaking publicly about them.

Mr. Brunson said: ?Berkeley has been fraught with controversy. This issue of arbitration is being held behind closed doors and I believe that this issue needs to be aired in a public arena.?

He said the cost of the school had escalated from $68 million to $121 million and that any settlement agreed on in the arbitration would push that figure higher.

The MP said he expected the settlement from Government to Pro-Active to be between $9 million and $30 million.

?There are a lot of unanswered questions out there,? he added.

?Why did they remove Pro-Active? What was the basis? If they had legitimate grounds to dismiss them, why is there a need for arbitration?

?I just think the Government needs to come clean on this whole issue rather than trying to keep it under wraps.?

Ms Gordon-Pamplin said: ?The taxpayer is going to have to pay for this.

?But how can you ask someone to pay a bill without giving them any details? They haven?t told us anything and I think that just speaks to the secrecy with which the Government operates.?

A number of politicians are reported to have been subpoenaed to give evidence at the arbitration hearing including Premier Alex Scott, who was Works and Engineering Minister when Pro-Active was hired; former Premier Dame Jennifer Smith; current Works and Engineering Minister David Burch; Ashfield DeVent, the Works and Engineering Minister at the time Pro-Active was fired; former Works and Engineering Minister and current Education Minister Terry Lister and PLP backbencher Ren?e Webb, a Cabinet member when the Pro-Active contract was granted.

Mr. DeVent, who lost his job last October after a difficult 22 months in Cabinet, told that he could not comment on whether he had received a legal summons to give evidence.

?The agreement regarding the arbitration is supposed to be confidential,? he said. ?Most arbitrations are confidential.?

Ed Ball, general secretary of Bermuda Public Services Union, confirmed that he had received a summons but did not know why. ?We haven?t been involved in anything to do with this,? he said.

A Government spokeswoman said: ?Both parties have agreed that there will be no discussions whatsoever on the arbitration.?

Pro-Active referred a request for comment to its legal adviser Julian Hall. He did not respond to telephone and email messages.

The law firms representing the parties, Smith & Co for Pro-Active and Conyers, Dill and Pearman for the Government, also failed to return calls.

Students will start the school term at the new Berkeley Institute on September 11, three years after the building was due to open.