Straight Up with Meghan McCabe: Coleman and the Amazing Technicolour Bond Coat

Meghan McCabe reports the latest on Coleman's Paving Contract Kerfuffle.

 

 

It’s like that magic trick, where a kid pulls a scarf out of a magician’s sleeve and it keeps going and going and going and you’re never quite sure when it will end.

The facts of the cancelled contract between the provincial government and incoming premier Frank Coleman’s former company, Humber Valley Paving, just keep coming. And we may not be at the end yet – with many of us anxiously awaiting the Auditor General’s report to prove whether or not it is, as the opposition says, a conflict of interest.

To recap: Humber Valley Paving (HVP) was awarded a $20 million contract to pave a section of the Trans-Labrador Highway, roughly 80 km. HVP got about sixty percent of it finished, but said they could not complete the rest.

Frank Coleman stepped down from HVP days before his son, Gene, asked the government to release HVP from the contract, and the request was granted.

Minister of Transportation and Works Nick McGrath said the government did not require HVP to pay millions of dollars in bonds, because it was in the best interests of all parties – including Newfoundlanders and Labradorians – not to.

“We don’t want to put a company out of business, because if you take their bonds away they could very easily be put out of business for future work,” McGrath said. He said the work will be retendered.

First, we were told the bond in question was worth $9.5 million. Then, it was revealed the government had two bonds totaling closer to $20 million. And the scarf continues to be pulled.

Minister McGrath’s comments on the bonds actually met some harsh criticism from the Surety Association of Canada, which represents companies that provide sureties and other bonds.

“The Minister’s comments about the surety bond process were completely irresponsible and just plain wrong,” said Steve Ness, President of the Surety Association, in a press release.

“Taxpayers will now be on the hook for any cost escalation that comes with retendering the project, including the costs of retendering; costs that are usually picked up by a performance bond,” said Ness.

But wait – there’s more.

Frank Coleman was personally saved from a big payout when the government chose to release HVP from almost $20 million in bonds.

In an episode of CBC’s On Point, Coleman said he had guaranteed a portion of the bonds as a shareholder of HVP.

Liberal leader Dwight Ball asked McGrath if he knew that information before they decided to release the bonds.

And McGrath said that he did not.

“I watched the media on Saturday night, and that was when it was verified to me, on the media, that he was a guarantor,” he said.

Ball said the information should have been shared.

“It really proves that there was a direct financial impact for Mr. Coleman in this case,” he said.

Meanwhile, Newfoundlanders and Labradorians don’t seem to feel their best interests are being protected, voicing concerns over the issue on radio call-in shows and social media.

As John Crosbie recently stated of political events in our province:

“The activities going on here today very much need to be looked into and explained to the public. And we should be demanding from our politicians, and people who are interested in running in public service today, just what the hell is going on, and what are they going to do about it, and when are we going to get the full explanation?”

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