Taxpayers shelled out $10 million more than expected for the Island's three vehicle safety and emissions testing centres after Government "relinquished control" to two linked private companies, the Auditor General has revealed.

Heather Jacobs Matthews launched a probe into the building project earlier this year which has exposed a litany of failures by Government to ensure tendering policies were followed or value for money was achieved.

She released a highly critical report yesterday which describes a "quite disturbing" situation involving ministerial interference from the outset, the abandonment of normal financial controls and the ability of a local firm part-owned by construction boss Dennis Correia to subcontract work to another of his companies without putting it out to tender.

Bermuda's independent fiscal watchdog reveals that the Ministry of Transport was given responsibility for the construction of the new TCD building and the testing centres in Hamilton, St. George's and Southampton, when it should have been managed, like all major capital projects, by the Ministry of Works and Engineering (W&E).

The result, she concludes, was a failure by Government to adhere to its own Financial Instructions and a lack of proper oversight and management which meant the original budget of $5.3 million rose to a final cost of $15.2 million.

"The situation is quite disturbing," the Auditor General says in her report. "Government has established Financial Instructions designed to help it manage large projects effectively through W&E.

"However, when these are circumvented, ignored or not used on a consistent basis, then the result is that Government is not managing the public resources with which it has been entrusted with appropriate due care."

Ms Matthews discovered that one of the private companies, Bermuda Emissions Control Ltd. (BECL), was told by Transport Minister Ewart Brown in 2001 that Government would waive its tendering requirements and give it contracts related to the project.

Mr. Correia became a 30 percent shareholder in the business in February 2003. Four months later, Dr. Brown told Cabinet that BECL was previously determined to be the "preferred contractor" for the work.

The company — part-owned by Dr. Brown's cousin Donal Smith — was given a consultancy contract to manage the project and later outsourced construction work worth more than $10 million to Correia Construction Ltd. (CCCL), also a third owned by Dennis Correia, without an open tender process.

Ms Matthews says that created an "inherent conflict of interest", since both firms were 30 percent owned by Mr. Correia.

A spokesman for Dr. Brown — who steps down as Premier and Tourism and Transport Minister next week — said last night: "The Premier, unlike certain members of the media, has not received this report and will not comment on it until he has read it."

Finance Minister Paula Cox said her Ministry viewed the findings seriously and had already sought to strengthen financial protocols within Government (see her full statement below).

To see the complete report click here