THE Chief Minister has defended the decision to sign Jersey’s £710 million hospital contract before outstanding due-diligence work was completed, saying the “exceptional” situation was handled “transparently and appropriately”.
Grilled over the matter in the States Assembly yesterday, Senator Lyndon Farnham told the States that he remained satisfied with the government’s existing financial governance and assurance arrangements and did not intend to make changes following the controversy.
His comments came shortly before Health Minister Tom Binet issued a detailed five-page account of the turbulent final days before the contract with Bouygues UK was signed on 5 June – two days before the general election.
Senator Binet revealed that he only learned on 28 May that Government chief executive Andrew McLaughlin had written to Health’s chief officer a week earlier advising that the contract should not be signed until further due diligence had been carried out.
“The letter had neither been sent to me nor otherwise brought to my attention,” Senator Binet said, adding that he discovered its existence immediately before the contractor’s team arrived for final negotiations.
He described being presented with a “significant and unexpected dilemma”, amid concerns that further uncertainty could lead to Bouygues withdrawing from the project. Around 100 contractor employees had already finished working under a short-term agreement in anticipation of the main contract being signed.
Responding to a question from Deputy Karen Wilson in the Assembly yesterday, Senator Farnham said the government already had “robust legal, financial governance and assurance processes” for major projects.
“The recent hospital contract was an exceptional case,” he said.
He said Senator Binet had acted transparently through the ministerial-instruction process after discovering the outstanding due-diligence requirement shortly before the planned signing.
Following legal advice and discussions between ministers, a way forward was agreed which enabled the contract to be signed while the outstanding work continued.
“The Council of Ministers supported that approach because it protected the public interest, maintained the required assurance processes, and avoided further delay to a project of critical importance to our Island,” Senator Farnham said.
He added that the original ministerial instruction ultimately became unnecessary.
He said that, after first learning of the outstanding work, senior officials explained how a ministerial instruction could enable the project to proceed and that, according to his recollection, “no concerns were raised regarding the proposed approach”.
However, according to his account, Treasury Minister Elaine Millar subsequently told him that the full assurance work should be completed before signing.
On 3 June, after Senator Binet had issued his instruction, Mr McLaughlin advised that it would be preferable to complete the assurance work first. Later that afternoon, Senator Farnham himself encouraged the Health Minister to delay signing until the due-diligence process was finished.
The following day, after further advice, a compromise was devised allowing the contract to be signed while preserving a period for the remaining checks to be completed.
Senator Binet said the Council of Ministers supported the arrangement and also backed proceeding with the contract if Bouygues rejected the proposed mechanism.
The contractor accepted the revised terms and the agreement was signed at around 1pm on 5 June.
