Government was last night attempting to save the troubled $70 million new secondary school project from “imploding” after a number of subcontractors refused to supply materials and work on the site after failing to get paid.

Problems with the development, which has been plagued by delays and difficulties after being awarded to general contractor Pro-Active Management Systems Ltd. 18 months ago, have finally come to a head.

Yesterday, workers on the site said they were unable to do anything but clean up because they had no materials to work with, including cement, after some suppliers began withholding their goods weeks ago.

And Works and Engineering Minister Alex Scott was yesterday said to be locked in discussions with his technical officers and the general contractors to discuss options to get debts paid and everyone back on the site as soon as possible.

Although no subcontractor would be named yesterday, many said they had been waiting for payment for months - and none understood why or how the cash flow problems had arisen.

One contractor said: “I think we are in a similar position to other suppliers in that we have not been paid for a long period of time.

“We are not getting a satisfactory explanation from Pro-Active. We have decided to withdraw our services until such time we can get substantial payment. I believe Pro-Active is saying they are not getting paid by Government but we are taking that with a pinch of salt.

“Most of the subcontractors, including some overseas suppliers, have withheld supplies.”

It has been claimed for months now that Government has been paying some suppliers and subcontractors directly after the companies said they did not trust Pro-Active.

But yesterday, it was alleged that more will now follow suit. Many said they would not return to the site until their accounts were cleared.

Some contractors said they believed that Government may now take over the whole financial aspect of the site, including paying Pro-Active workers directly. The Royal Gazette understands that Pro-Active owes hundreds of thousands of dollars to subcontractors, with some being owed well in excess of $200,000.

One contractor said: “We have not been paid up to date. They owe us a substantial amount of money. We are not happy, but we don't want to see the project fail.

“We have stayed on the site until now, but this can't go on for ever. If we are not paid, we would have to consider withdrawing.

“I think the best thing that could happen now is that Government takes over. I'm sure we will be asking that Government pay us direct from now on.”

One insider said yesterday that they believed Government had paid the Pro-Active workers direct last week after the general contractor failed to pay them on time a week earlier, causing an unofficial picket.

The source said: “From what I'm being told, the whole project is about to implode. Something big is going down - the whole thing is a mess. I think there will be announcements on Friday.

“Whether Pro-Active steps down and whether Government decides to call in the performance bond (insurance and guarantee) to cover extra costs, remains to be seen, but it cannot continue as it is.”

And the source said one company was planning to file a writ against Pro-Active for money owing, but was asked to hold off by Government for the time being.

One Pro-Active worker on the site said staff had been told that Pro-Active leaders had been in discussion with Government yesterday - and it was believed to be over whether or not they will continue with the project.

And it had also been rumoured that Pro-Active may even file for bankruptcy next week.

But the worker said management from the general contracting firm were planning to hold a big meeting with their construction staff today (Friday).

He said: “We are apparently going to have a big pow wow. No one knows what's happening. We have no materials to work with - not even cement - so we have just been cleaning up today.

“People want to know what's going on down here. We are worried about our Government pension, private pensions, taxes and health insurance. No one seems to be telling us whether they have all been paid.”

Yesterday, Works Minister Alex Scott, when asked about rising debts and payments to subcontractors, along with the withdrawal of staff and materials from the site, said all of the issues were being addressed.

He said: “Yes, I have been in meetings most of the day - some of it touching on Berkeley. Currently, steps are being made to address all of these aspects of the site and it would be premature for me to say anything because we want the subcontractors to know first. We don't want them to know what's going to happen by reading it in the paper.”

But Mr. Scott said a number of options were being looked at, and only one of them involved Government stepping in with cash to pay off the bad debts.

He refused to say how much money was owed to the sub-contractors. On the issue of health insurance, Government pension and taxes of the Pro-Active workers, he said they were being attended to.

The Minister said the Bermuda Industrial Union had investigated those issues and had been satisfied. Mr. Scott then quickly brought the conversation to an end and said he had to return to his meeting.

The directors of SKB roofing, yesterday said they were still awaiting $64,000 from Pro-Active and would not be providing any further services until the money had been paid.

One of the directors, who did not wish to be named, said he had spoken to Works and Engineering permanent secretary Derrick Binns and had been asked to wait until today (Friday) when everything would be sorted out. He said: “We are giving them until Friday. We have closed our account with Pro-Active until the money is paid.

“They are behind in their payments and have been making promises for the last six weeks. I stepped in when I realised they owed us $86,000. They did give us a cheque for $22,000, and then we gave them until February 7 to pay the rest.

“When they did not produce, we went to Mr. Binns at the Ministry and he asked us to wait until the 14th. But we have heard nothing since, and we thought we might have had a call.”

* Mr. Scott said he wished to point out that, contrary to a story in yesterday's edition of The Royal Gazette on Berkeley, it had never been his intention to move some students onto the new school site at one stage, and then the rest at a later date.

He said he had hoped to move all students and teachers onto the site at once, maybe before all of the campus was finished.

But he said that would only happen if planning officials deemed it safe and issued an occupancy certificate.