Senators discussed an audit report into the building of Westgate prison.

PLP Senators crossed swords with Government Senators over the way the $34 million construction project was handled -- particularly an extra $2 million that was paid out to ensure it was completed.

Sen. Terry Lister (PLP) cited the Report of the Auditor which he said stated that an additional $2 million was paid to contractors Sea-Land Construction over and above the $29.5 million paid for the work.

But Government Senators hit back, saying the extra payment was needed to ensure workers were paid and the work was completed. And they added it was never given to the building firm.

In addition, Sen. Lister was critical of the tender process, claiming the viability of the contractor to cope with the project's size could not be evaluated.

He slammed the reduction of the retaining amount of the fee from ten to five percent.

A performance bond for the contract was not available and the fee was reduced by $500,000, said Mr. Lister, asking why another method of assurance was not used in place of the bond.

"We are examining documentary evidence of the UBP's ability to manage, manipulate, and its shortcomings,'' said Sen. Lister.

"They haven't allowed the people of Bermuda to see what is going on. They hid their record from public view.'' He said there was no evidence that the money was paid for extra work.

"It was an ex-gratia payment, what else can you call it if there was no other work done.

"The Minister of Finance should have gone to Parliament to get permission for this. Nothing was said, it was kept quiet and accountability was called into question.'' But Government Senate Leader E. T. (Bob) Richards said at the time of the construction the building industry was in recession and with 180 jobs at stake at Westgate a decision had to be made when the builders ran into difficulties.

He said: "It was clear that getting a new contractor was less attractive than finding a way to ensure the contract was completed.

"It was in Bermuda's best interests to do this,'' he said. "The money was never handed to Sea-Land. It was given to an accounting firm to ensure...that the money went to completing the project and not to the contractor.'' The retainer was lowered to ensure that the project went ahead in the first place, he said.

Sen. Angelita Fox (UBP) said the Government had made a decision at the time to go ahead with a capital project that would benefit the recession-struck economy.

Re-bidding for the work would have delayed the building too long, when men needed to be working, she said.

But Sen. Jeannette Cannonier (Ind) said there was certainly mis-management but said she applauded the Government for "doing what they had to do''.

She added there was a lack of documentation to describe what the extra payment was for. "If this was a private company then heads would have rolled.'' Sen. Larry Scott (UBP) said the Government had a tough decision to make and would have been vilified if jobs had been lost.

He said the decision was correct but admitted the methodology could have been better.

"It is unfair to say it was mismanagement,'' he said. "It was management through a crisis.'' Independent Sen. Walwyn Hughes , who was the Government Financial Secretary at the time, said it was an extremely difficult period for the people trying to get the job done.

He suggested that perhaps Government should have been more transparent. But he added a lot of lessons had been learned for future contracts of that size.

Sen. Allan Marshall (UBP) said that if help was not provided to Sea-Land, the contractor would have gone bankrupt.

And replacement of Sea-Land with another contractor would have cost Bermuda more than $2 million.

"It was not an easy decision,'' he said. "They had to make sure the project was completed.'' He added the $2 million went to an independent auditor, not to the construction company, to ensure the project was completed.

And he pointed out that the project was still completed within the overall allotted funds.

"The contractor did not make a penny out of this,'' he said.

Community Affairs Minister Yvette Swan told her colleagues that if Sea-Land was allowed to "go under'', work on the Westgate Correctional Facility would have stopped and the subcontractors would have been out of work, wreaking havoc on the workers' families.

And she said that by the time Government had re-advertised and got new contractors, it would have cost more than the allotted $45 million.

Sen. Swan said the then-Works and Engineering Minister and the Cabinet considered all of the options open to them and in the end chose the most practical approach at the time.

But Sen. Neletha Butterfield (PLP) insisted that it was important to get proper approval for the spending of funds.

"The report is saying that you have to have the proper things in place.'' And she said that when auditors produced reports, Senators should be open minded in their discussions of their contents.

"You have to have some checks and balances in place,'' Sen. Butterfield said.

She said the PLP had no qualms about saving the project, but there should have been proper documentation and it should have been brought to the legislature.

Senate President Alf Oughton said the "meaningful'' debate into the matter propelled many aspects into the open.

And he agreed with Sen. Hughes' comments that Government should have been more transparent when the dilemma arose.

"But I don't think the Government had any other choice but to do what they did.''