Lo­cal con­trac­tor NH last month signed an EC$165 mil­lion (US$61 mil­lion, TT$414 mil­lion) agree­ment with the Gov­ern­ment of St Lu­cia to con­struct Halls of Jus­tice in the is­land’s cap­i­tal, Cas­tries.

The Build Own Lease Trans­fer (BOLT) agree­ment was signed on April 19 at the project’s sod-turn­ing cer­e­mo­ny, which was on the pro­posed con­struc­tion site.

Speak­ing to the Busi­ness Guardian last Thurs­day, NH ex­ec­u­tive chair­man, Emile Elias, said the Gov­ern­ment of St Lu­cia opt­ed for a BOLT to con­struct the Halls of Jus­tice be­cause it is anx­ious not to in­crease the is­land’s debt-to-GDP ra­tio.

“This BOLT, which means that NH is ful­ly fi­nanc­ing the en­tire project, re­quires the gov­ern­ment to pay a quar­ter­ly lease rental that re­flects the cost of the build­ing plus all the trans­ac­tion and bridg­ing-in­ter­est costs for a ful­ly out­fit­ted and equipped build­ings,” said Elias, adding that the base con­struc­tion cost is US$53 mil­lion and the to­tal in­vest­ment cost is US$61 mil­lion.

Fol­low­ing the sign­ing of the BOLT agree­ment on April 19, the NH ex­ec­u­tive chair­man said there are sev­er­al steps to be tak­en be­fore con­struc­tion can start:

• The land on which the build­ings are go­ing to be con­struct­ed has to be leased to the spe­cial pur­pose ve­hi­cle called Themis, which is a whol­ly owned sub­sidiary of NH;

• The lease agree­ment for the land has to be put in­to the se­cu­ri­ty pack­age for the syn­di­cat­ed lenders. NH is cur­rent­ly in dis­cus­sions with Re­pub­lic Bank to speed up that process be­cause St Lu­cian Prime Min­is­ter Philip Pierre has ex­pressed keen in­ter­est in see­ing the com­mence­ment of con­struc­tion with­in the next 60 days, or there­abouts.

Elias said Re­pub­lic Bank is syn­di­cat­ing the en­tire loan of US$61 mil­lion and his com­pa­ny will con­tribute to the syn­di­cat­ed loan.

“Emile Elias and Com­pa­ny is con­tribut­ing to the syn­di­cat­ed loan. When you con­tribute to the syn­di­cat­ed loan, you be­come a lender as well,” said Elias. He said the syn­di­cat­ed loan is pitched at a rate, based on Re­pub­lic’s sound­ing out of the mar­ket to en­sure that there would be an ad­e­quate re­sponse.

“Re­pub­lic Bank is man­ag­ing all of that. I do not know how much they are syn­di­cat­ing and how much they in­tend to keep with­in the bank it­self. That is a mat­ter for the bank,” the vet­er­an con­trac­tor said. Eighty per cent of the loan is be­ing syn­di­cat­ed in East­ern Caribbean (EC) dol­lars and 20 per cent in US dol­lars, said Elias.

“Cur­rent­ly, the fi­nan­cial sys­tem in the East­ern Caribbean is not earn­ing very much in­ter­est in EC dol­lars, so there is a great ap­petite for a bet­ter rate of re­turn, which this syn­di­cat­ed loan will of­fer,” said Elias. “The banks in the East­ern Caribbean have a great deal of ex­cess liq­uid­i­ty and are not get­ting very high rates of in­ter­est. This BOLT loan is go­ing to be an at­trac­tive al­ter­na­tive for them,” he said.

He was wary about re­veal­ing the in­ter­est rate on the syn­di­cat­ed loan, stat­ing that Re­pub­lic Bank still has to ne­go­ti­ate with po­ten­tial bor­row­ers.

The con­struc­tion is ex­pect­ed to take two years on two sites in Cas­tries, which are lo­cat­ed be­tween the cap­i­tal’s Con­sti­tu­tion Park and the Mi­nor Basil­i­ca of the Im­mac­u­late Con­cep­tion (Cathe­dral).

The to­tal foot­print of the con­struc­tion is es­ti­mat­ed to be 3,083 square me­tres (33,193.42 square feet), ac­cord­ing to in­for­ma­tion pro­vid­ed by the Gov­ern­ment of St Lu­cia. The larg­er site, com­pris­ing an es­ti­mat­ed 2,583.51 square me­tres, will be oc­cu­pied by the is­land’s civ­il and fam­i­ly law di­vi­sions, while the small­er 500.25-square-me­tre site will ac­com­mo­date func­tions re­lat­ed to the crim­i­nal court.

Elias said the two new build­ings would con­sol­i­date the de­liv­ery of jus­tice from six lo­ca­tions, for which the St Lu­cian gov­ern­ment is now pay­ing rent.

“The ben­e­fit to the gov­ern­ment is that it would save the rent on the six lo­ca­tions and al­so af­ter 12 years St Lu­cia would own the ju­di­cial com­plex for a nom­i­nal $1 fee. The lease rental is not a re­flec­tion just of in­ter­est, but of amor­tis­ing the cap­i­tal of the loan over 12 years,” said Elias.

About 300 work­ers are ex­pect­ed to be em­ployed on the site, with most of them be­ing St Lu­cian, he said, adding that cer­tain tech­ni­cal el­e­ments of the job would need work­ers from “off­shore” to come in­to the is­land.

“The con­struc­tion of the Halls of Jus­tice is a great ex­port op­por­tu­ni­ty for man­u­fac­tur­ers in Trinidad and To­ba­go. That is be­cause when NH goes off­shore, we use re­sources from T&T, such as PVC pipe, elec­tri­cal sup­plies, air con­di­tion­ing sub­con­trac­tors, el­e­va­tors etcetera,” said Elias.

Most of the equip­ment to be used in the con­struc­tion of the build­ings, such as the tow­er cranes and spe­cialised hoists to move ma­te­ri­als and peo­ple, will have to be brought in­to St Lu­cia. Some St Lu­cian equip­ment might be used for foun­da­tion work and ex­ca­va­tion, he said.

The ar­chi­tects for the project are ACLA Ar­chi­tec­ture, the firm lo­cat­ed at the Fer­nan­des Busi­ness Cen­tre in Laven­tille, whose se­nior di­rec­tor is Gary Tur­ton.

“We se­lect­ed ACLA be­cause they have spe­cialised ex­pe­ri­ence with Halls of Jus­tice. They, in fact, won a com­pe­ti­tion of the East­ern Caribbean Court of Jus­tice, about 15 years ago to de­sign the Halls of Jus­tice for the Gov­ern­ment of St Lu­cia. We had start­ed the process of bid­ding and ne­go­ti­at­ing for the job, but the gov­ern­ment changed and the project died. ACLA had all the records and knew the scope of work and the re­quire­ments of a cour­t­house, so we went straight to them to team up with us. And they have done a great job,” said Elias. ACLA was al­so the ar­chi­tect for the Hall of Jus­tice in Port-of-Spain, in a joint ven­ture with the firm HK­PA (Unit­ed King­dom).

Elias not­ed that the project in St Lu­cia is sim­i­lar to the Min­istry of Health head­quar­ters build­ing. One of the main dif­fer­ences is that the St Lu­cian Halls of Jus­tice will be trans­ferred to the Gov­ern­ment of St Lu­cia af­ter 12 years, com­pared to the 15 years for the Min­istry of Health build­ing lo­cat­ed at Queen’s Park East.

“Be­cause you have com­pressed the pe­ri­od, the lease in­stall­ment would be high­er be­cause the amor­ti­sa­tion is big­ger,” Elias said.

The con­trac­tor ex­plained that with BOLT arrange­ments, there are no-cost over­runs as the agree­ment locks in the cost of con­struc­tion.

“There is no such thing as a cost over­run. It is a lump sum, fixed cost arrange­ment that the con­trac­tor is giv­ing to the spe­cial pur­pose ve­hi­cle and the Gov­ern­ment of St Lu­cia is go­ing to re­ceive its build­ing, ful­ly out­fit­ted, for use af­ter two years. If costs go up, as they may and as hap­pened with the Min­istry of Health build­ing be­cause of the COVID-19 pan­dem­ic, that is en­tire­ly out­side any risk the gov­ern­ment takes. That is the con­trac­tor’s risk,” said Elias.

In a speech at the cer­e­mo­ny, Paul Hi­laire, per­ma­nent sec­re­tary in the Min­istry of Fi­nance and Eco­nom­ic De­vel­op­ment, said, “The due dili­gence ap­plied in se­lect­ing NH as our BOLT part­ner was rig­or­ous.

“Our pri­or­i­ty was to en­gage a part­ner whose val­ues align with our pub­lic ser­vice ethos and who demon­strates a strong track record of de­liv­er­ing high-qual­i­ty in­fra­struc­ture projects on time and with­in bud­get.

“This part­ner­ship is struc­tured to fos­ter trans­paren­cy, risk-shar­ing, and mu­tu­al ac­count­abil­i­ty, en­sur­ing that the Halls of Jus­tice not on­ly meets but ex­ceeds the ex­pec­ta­tions of the peo­ple of St Lu­cia.”

Asked whether there had been any push­back from the Op­po­si­tion in St Lu­cia with re­gard to the award of this BOLT to a T&T com­pa­ny, Elias said, “None so far. But I may say if there is push­back on the po­lit­i­cal side, it would not be that the Gov­ern­ment of St Lu­cia has used a high­ly qual­i­fied firm to do it. There are no con­struc­tion or fi­nanc­ing re­sources with­in St Lu­cia to car­ry out this size of BOLT.”