Government is staying tight-lipped about progress on getting the $6.8 million owed by Union Asset Holdings Ltd. from the Berkeley school job.

Recently Auditor General Larry Dennis argued that the Progressive Labour Party Government would not go after more than $15 million owed from sacked Berkeley contractors ProActive because it would mean calling on a performance bond of $6.8 million.

That bond was collateralised by the buildings of the Bermuda Industrial Union (BIU), and collectable from Union Asset Holdings Ltd. Mr. Dennis said he believed Government would avoid calling the bond because it risked killing the BIU.

That brought an outraged response from Premier Dr. Ewart Brown who accused Mr. Dennis of "shocking unprofessionalism" for doubting Government was serious about getting its money.

And in early April Attorney General Kim Wilson told The Royal Gazette that Government was serious about getting its money back but she did not respond to a request for an update this week.

However former Premier Alex Scott, who as Works Minister hired Pro-Active who were later sacked in a job which came in three years late and more than $55 million over budget, said he believes that Union Asset Holdings will honour its debt.

Its understood the BIU, which wholly owns Union Asset Holding's Ltd, owns a number of properties in Hamilton it could lever to pay the debt.

Mr. Scott said: "I can't speak for the union or any discussions with Government but I know Government's position has always been that, should it be required, Union Asset Holdings would be expected to step forward and meet its commitment."

He said just after the signing of the ProActive deal, he, his permanent secretary and colleagues such as Dame Lois Browne Evans, who was then Attorney General, had been given assurances that Union Asset Holding assets could satisfy any call on the bond.

Asked if it was odd for a union to be providing security for a private company Mr. Scott argued that Union Asset Holdings wasn't just the union but others were involved.

However a check of the share registry yesterday showed the BIU was the sole shareholder.

Recently BIU member Alvin Williams warned that the old alliance between the PLP and the BIU has come under considerable stress and strain during the PLP's decade in power and the bond row put the relationship in further jeopardy.

In his Mid-Ocean News column of April 17 he wrote that: "If Government persists in its current efforts to collect on that bond, such moves would likely break the longtime relationship between the political and trade union arms of the labour movement a development which would have very serious political and social implications for the PLP and Bermuda.

"Questions are even now being asked about why the Government is going after the BIU when it is seemingly reluctant to go after those employers who owe hundreds of thousands of dollars to employee pension and health benefit plans."

He concluded by saying: "If there is a permanent or semi-permanent rupture of relations between the PLP Government and the BIU in the coming months, then it will stand to reason as to who was at fault for such a potentially catastrophic schism."

But last night Mr. Scott said: "A split? I would be surprised if that took place, it was a business arrangement.

"A business deal is a business deal and one would have thought that the union, as the Government has, would have thought it all through and would have anticipated the possibility the bond would be called and they would have taken steps to meet that eventuality."

BIU president Chris Furbert, who is also President and Director of Union Asset Holdings Ltd., did not return a call to this paper yesterday.