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How the cost of new air terminal
increased to over three times original
cost ...and Caruana's changes
contributed to 6 million euros!
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by Dr JOSEPH GARCIA
Deputy Chief Minister
In Opposition we did not support the air terminal project. We did not support the expenditure, we did not support its relocation next to the frontier fence and we did not support the scale of the construction.
The arguments are well known and well rehearsed. In our view the motivation behind this project was not economic, in the sense of planning for the future, but purely and simply in order to give effect to a political agreement with Spain.
It is obvious to us now, with the benefit of having access to all the relevant information in Government, that we were correct in the analysis that we made at the time. The air terminal project has been carried out with poor planning and with little consideration for the public purse. It was not driven by the public need of Gibraltar but by the need to make a statement of pharaonic proportions paid for with somebody else’s money. It is very easy to have visions of this kind when somebody else foots the bill.
PRIORITIES WRONG
It is obvious that the honourable members got their priorities wrong in relation to this project.
Moreover, it was a serious error of judgement to operate two terminals at the same time, one for arrivals and one for departures. This has created all sorts of logistical problems for the staff who work in the buildings and for the commercial entities who operate from there.
There is no doubt that the rush to open for arrivals at the end of November, and the public viewings that preceded the partial opening, were nothing more than transparent electoral stunts. It will be recalled that workers were withdrawn from other Government projects all over Gibraltar in order to ready the terminal in time. There was an obvious resulting cost involved as well as a delay to the other projects.
The figures made available to the new Government soon after coming into office showed that the cleaning of the new terminal for the initial period of arrivals from 25th November to 10th December was over £88,000. Money was clearly no object.
The Government expects that the cost of the new terminal will be in the region of 84 million euros. This project was originally trumpeted as costing £24 million. The costs then went up to 50 million euros at the time of the tender, to 70 million euros at the time of the general election and to about 84 million euros today.
The waste of public funds is unforgiveable. It is clear that the party opposite has a lot to answer for.
CARUANA'S 6 MILLION EUROS
One of the reasons for increased costs is because the now honourable Leader of the Opposition, who once proudly boasted that he was the Clerk of Works of the Casemates project, clearly also considered himself to be the Clerk of Works of the air terminal as well. The Government has received detailed information which shows that at least six million euros of increased costs was due directly to the personal intervention of the then Chief Minister himself.
This included
*enlarging toilets at the cost of nearly 140,000 euros,
*increasing the size of the monitors at the cost of over 100,000 euros
* altering the purpose of the airside facilities building which cost the taxpayer 817,000 euros *changing some walls leading to and from the frontier from solid with glass top panel to full height glass walls. This cost a further 312,000 euros.
*The then Government also agreed to contribute 55,000 euros to the cost of demolishing and reconstructing stairs because they did not line up with the angle of the adjacent escalators.
It was already bad enough that the costs of the air terminal have increased to over three times the original figure that was given. It is totally
unacceptable that the now Leader of the Opposition should have been personally responsible for changes that contributed significantly to such an increase in costs.
BLAND CONTRACT UNCONSTITUTIONAL?
It is also particularly scandalous that the ground handling contract with Bland Ltd was signed on 7th December 2011 which was the day before polling day. It is beyond belief that the signing of this contact could not have waited 24 or 48 hours so that a different Government could have taken a view on it. This is all the more relevant since it is meant to run for a seven year term until November 2018.
The signature of this document the day before the people of Gibraltar went to vote for a new Government has raised a serious constitutional point. Save in the case of public emergency, the Constitution of Gibraltar prohibits any caretaker Government from committing or binding its successor to public funding or liability except in the ordinary course of the day to day affairs of Gibraltar. It is clear to me that the GSD Government, through GATL, has committed its successor Government to public funding and that this could be seen as unconstitutional. The new Government has sought a legal opinion on this point.
Having said all this, the air terminal is there and the new Government now has the responsibility to make it work. The Government were given practical completion at the end of April, about eight weeks ago. The decision has been takento operate the air terminal through a series of Service Level Agreements with a number of contractors who are already in place, until local people can be trained for the jobs that are available. The Government set about reducing the costs at the air terminal soon after we took office.
The House will recall the cancellation of the infamous cleaning contract that I referred to earlier.
The Government has authorised one year contracts with five contractors in respect of a number of functions at the new air terminal building after negotiating price reductions. This will nonetheless still cost over a million pounds a year. There are still other SLAs that remain to be agreed.
WORKING ON DEPARTURES
The new air terminal building is being prepared for departures as well as arrivals since practical completion was given at the end of April. Work now continues to resolve the long list of snagging problems that have been identified once possession of the New Air Terminal was achieved. Additionally work continues to fully integrate and configure the extensive IT systems present in the New Air Terminal.
The next phase will see staff being trained on the new systems and then full operations will be able to commence from the New Air Terminal.It will therefore open for this purpose as soon as it is ready. By way of example, the Government has been told that the CUTE check-in system was expected to be ready by mid-July and that following this the handler’s staff needs to be trained on it.
*Extract from Budget speech
11-07-12
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