NEWS

FRA Speaks Out On MWH Saga

The Fiji Roads Authority has a clear and consistent policy of not discussing commercial or contractual matters with anyone other than the affected parties. To date the FRA has declined
26 Sep 2016 10:19
FRA Speaks Out On MWH Saga
From Left:Dinesh Patel and John Hutchinson

The Fiji Roads Authority has a clear and consistent policy of not discussing commercial or contractual matters with anyone other than the affected parties.

To date the FRA has declined to comment in detail on the matters between MWH, now part of Stantec, and the FRA in accordance with that policy and out of respect to MWH and due process.

However, certain matters are now in the public domain, therefore the FRA is compelled to clarify its position.

FRA is concerned that recent statements in the press made by MWH have created misconceptions about the nature of the dispute and the events leading to the termination of the contract between FRA and MWH.

FRA believes MWH’s actions appear to be designed to cause disquiet amongst other contractors of FRA and employees of MWH and to damage Fiji’s reputation as a place for foreign companies to do business. Therefore the FRA is compelled to clarify its position.

The FRA and I personally, as chief executive, have a responsibility to the people and Government of Fiji to ensure that any and all goods and services procured by the Authority provide value for money; are delivered as safely, efficiently and effectively as possible; and that all transactions are carried out in accordance with the law.

That is a responsibility I do not take lightly! I have an obligation to challenge any and all service providers if I have cause to believe that these objectives are not being met. I do not resile from this position and will continue to hold all service providers to the same standard, regardless of their profile or where they come from.

Feedback:  jyotip@fijisun.com.fj

 

 

The FRA therefore wishes to clarify the following:

 

1.The FRA has been involved in a protracted contractual dispute with MWH. The dispute is not about non-payment despite assertions to the contrary by MWH. FRA has already paid MWH approximately F$6m for 2016 already. This is an acknowledgement by FRA that work has been done by MWH for which it deserves payment.

  1. MWH is claiming payment of almost F$20 million for its services so far in 2016. FRA required MWH to provide proper substantiation for this very large claim before payment could be made.
  2. The dispute has arisen because MWH has refused to provide that substantiation. FRA remains committed to paying to MWH all substantiated claims for payment and had advised MWH accordingly.
  3. It is normal procedure under contracts in all jurisdictions around the world for substantiation to be sought especially where such very large sums are claimed.
  4. FRA rejects statements in NZ by Mark Bruzzone of MWH that MWH has been negotiating with FRA to resolve the dispute. MWH’s only stance has been refusal to provide the required substantiation and to demand that payment of its entire claim be made merely on its say so. This is not negotiation.
  5. The above situation did not entitle MWH to terminate the contract.
  6. FRA will hold MWH accountable under the contract and will pursue to its fullest extent the legal rights available to FRA under the contract and the law. FRA is also considering whether there may have been misleading or deceptive conduct in contravention of the Commerce Commission Decree. If this process identifies overcharging by MWH, FRA intends to enforce its legal rights to seek a refund.
  7. There has been considerable speculation linking the deportation of two MWH employees to the contractual dispute with the FRA and that somehow the FRA was responsible for their deportation. This is factually incorrect. The attempt by Mark Bruzzone of MWH to link the two does not bear scrutiny. The FRA has no authority or power to affect or influence the deportation of any person. FRA is not empowered to decide who stays and who leaves the country. That is a decision for the Government. FRA however had legitimate concerns about the conduct of those two employees in that one had issued threats to an employee of FRA about consequences to FRA if MWH’s demand for payment had not been met whilst the other had unlawfully written to third parties disclosing details of the dispute that were commercially in confidence. Not only was such conduct in contravention of the contract but it appeared designed to put unlawful pressure on FRA from other parties to resolve the dispute in the manner demanded by MWH. The FRA informed the Government of these actions. Independent of FRA’s issues with such conduct it appears that the Government felt the need to take steps to cancel

 

their work visas in the national interest. Had this not occurred FRA would most certainly have exercised its rights under the contract to insist upon the removal of those employees from any involvement with the contract on the grounds that they were not fit and proper persons. There was no need whatsoever for any other MWH employee to leave Fiji or any just cause for the company to walk away from the country by abrogating its contract.

  1. The FRA’s contract for Professional Services with MWH was due to expire on 31 December 2016. The contract was not being renewed. MWH has been aware of this for a considerable period of time. The FRA is in the process of determining which functions, previously delivered by MWH, can be best performed ‘in-house’ and which can be best delivered by external providers. That process is continuing. MWH employees were fully aware of this process and have been actively involved in supporting the transition. Part of that transition was the progressive downsizing of MWH as functions were transferred, a process which had already commenced and would have accelerated between now and December.
  2. FRA believes that the explanation given by Mark Bruzzone merely serves as a convenient excuse to downsize MWH’s presence in Fiji earlier than 31 December 2016, when the contract was due to expire in any event. MWH’s continued involvement with FRA would have required MWH to address the many concerns FRA has expressed to MWH about the services MWH has been allegedly providing. Unless this was addressed these employees ought to have expected their employment to come to an end at 31 December 2016.
  3. FRA had recently identified significant over-servicing by MWH and had directed MWH to utilize a much smaller, more targeted and cost-efficient team to provide the services required for the remainder of 2016. FRA had questioned in particular MWH’s unaccountable use of foreign staff. FRA suspects that its directive would have made it unsustainable for MWH to maintain a large team. FRA believes that MWH should be more forthcoming in its explanation to its employees. The FRA was aware that MWH was planning to reduce employee numbers by up to 40+ employees each month between now and December. Therefore to suggest that the approximate 120 local and 20 expatriate MWH staff have been suddenly left without a future is somewhat disingenuous.
  4. FRA has many reasons to consider that MWH failed to deliver the promises of change it made to the Government when it was recruited in 2012 to effect the transition from the Department of National Roads to FRA. The significant payments demanded by MWH are not reflected in the work they have done. FRA, therefore, believes that it is better placed to provide the services that MWH was entrusted with providing. FRA has embarked upon a recruitment drive and will consider applications by suitably qualified MWH employees for those positions.
  5. The FRA is committed to open, competitive, merit and competency based recruitment for all positions. All positions will be advertised this coming week and the FRA welcomes applications from all MWH employees. They will compete against all other applicants for the positions advertised and selection will be

based on competency and merit.

  1. FRA does not have bitter disputes with its other contractors. FRA wishes to reassure its other contractors and service providers in the face of misleading statements made by MWH, that FRA has always conducted itself in accordance with the terms of the contract. The contract would have remained in force for the rest of the year had MWH done the same.
  2. FRA’s charter with the Fijian people is to deliver good transport infrastructure. FRA will continue to engage with willing participants from the private sector to deliver this commitment to the Fijian people on a value-for-money basis. FRA is committed to honoring its obligations under its contracts with the private sector.
  3. Notwithstanding the unilateral actions of MWH the FRA will continue to deliver its program of works. This action was not totally unforeseen.

The FRA has implemented its contingency plans to cater for this event. Yes, there will be some disruptions and delays to individual projects and programmes, and yes there will probably be some shortcomings and oversights in the coming weeks and months, but the management and staff of the FRA, together with our other service providers and contractors will continue to deliver a programme that moves Fiji forward. The FRA welcomes the support of our other service providers and contractors, as well as the people of Fiji, during the forthcoming challenges.

  1. The FRA is committed to sound governance; ethical behavior; achieving value for money; safe, efficient and effective service delivery; with all activities carried out in accordance with the law. Where the FRA believes it is not receiving any of these objectives from its service providers it will hold them to account. The Fijian people expect nothing less.
  2. What MWH has done is unlawful. MWH is in breach of their contractual obligations. It is also very disappointing that they have acted in a way that is detrimental to FIJI and the interests of the Fijian people. As a nation, through the FRA, FIJI has paid this company a great deal of money to supervise the improvement of our roads and we have all been very badly let down. The contract provides the mechanism for allowing FRA to make MWH accountable for its behavior.

That mechanism has been commenced by FRA. Fijians and those charged with the running of MWH in NZ and globally should know that there will be no let-up in FRA’s pursuit for a just outcome from MWH and for all Fijians.



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