More than a year after it was awarded damages, Government is still pursuing the $13 million owed by failed Berkeley contractors Pro-Active, Auditor General Larry Dennis has revealed.

Pro-Active was sacked from the secondary school project which came in three years late and $55 million over budget.

The company sued Government but lost the case, with Government being awarded $13.2 million in damages which has now risen to $15,620,000 with interest and costs.

Mr. Dennis said he had always doubted Government would go after the money because it would mean calling on a performance bond of $6.8 million, collateralised by the buildings of the Bermuda Industrial Union (BIU), and collectable from Union Asset Holdings Ltd.

In his special report Mr. Dennis wrote: "I have always harboured doubts about whether the security for the performance bond was real and whether the purchase of the bond was not just some scheme to extract $700,000 from the public purse."

He said he believed Government would never try to get the $6.8 million bond from Union Asset Holdings Ltd. because it risked killing the BIU.

He wrote: "I expressed these views at a meeting with the Minister of Finance on January 23, 2009 noting that they appeared to be supported by the fact that a year had passed since the arbitrator's award with no apparent efforts to collect."

But Government produced a solicitor's letter dated January 12, 2009, telling Union Asset Holdings to pay the sum within 14 days.

The letter, from Conyers Dill & Pearman, added: "Failing payment, steps will be taken to compel payment of this sum without further notice."

In his report Mr. Dennis said: "Still not entirely convinced, I asked the Minister if this was really a serious attempt to collect the amount due from Union Asset Holdings under the performance bond.

"The Minister assured me this was a serious attempt."