GM Challenger denies owing JDF money in ambulance saga

GM Challenger CEO Nigel Pagon says his company has refunded the $6-million deposit it received from the Jamaica Defence Force (JDF) to supply a special ambulance despite an Integrity Commission report that said that the state agency was not reimbursed.

The report, which was tabled in Parliament on March 8, said the car company failed to perform the contract, resulting in the JDF’s loss of millions of taxpayers’ dollars.

But in a statement to The Gleaner on Wednesday, GM Challenger said that the matter was settled with the JDF.

“All monies paid to GM Challenger in accordance with the contract between itself and JDF were returned, receipt of which has been acknowledged by the JDF and the Attorney General’s Chambers. The amount returned was of $6,097,778,” Pagon said in the statement.

He said the report failed to mention that a claim was filed in the Supreme Court and that GM Challenger had defended that claim and issued a counter claim against the JDF for monetary compensation for a breach of contract.

He added that neither the company nor its officers or agents benefited from the sum deposited by the JDF.

Pagon said the company is yet to recover from the “significant” loss it suffered because of the JDF’s handling of the contract.

As for the contract between the company and the Ministry of National Security for the provision of five 40-seater buses, which the Integrity Commission said also cost taxpayers more than $12 million, Pagon said that that deposit was paid over to a third-party manufacturer as part of their contractual requirement.

He said that the buses were manufactured and ready for shipment and delivery, but external shock outside of its control resulted in a “significant” increase in freight charges, which it could not absorb.

He said the increase was as a result of the global financial meltdown between 2007 and 2008.

Pagon said it was impossible for GM Challenger to perform the contract without the direct input of the Government to cover the increased freight charge but that its request for the Government to do so was declined.

He said the $12,986,209.60 was not returned by the third-party manufacturer because it had held up its end of the deal.

“Neither GM Challenger nor the manufacturer is at fault for the non-performance of the contract in question,” he said.

The Integrity Commission report tagged then Chief of Defence Staff Major General Antony Anderson and former permanent secretary in the Ministry of National Security Gilbert Scott as “grossly incompetent” for their handling of two contracts that it said cost Jamaican taxpayers a total of $20 million.

The report covered an investigation into allegations of the non-performance of a contract awarded to car dealership GM Challenger by the JDF in 2014.

It said the two government officials were “cavalier” in the manner in which the procurement activities were conducted.

“They allowed the same entity, GM Challenger, to be twice paid deposits totalling approximately $20 million for vehicles ordered but not supplied and that no refunds of those deposits have been received to date,” Director of Investigations Kevon Stephenson said in the report.

The report also said that both Anderson, who is now the commissioner of police, and Scott breached Section A7.6.3. of the Public Sector Procurement Procedures when they authorised partial payments to GM Challenger without obtaining an advance payment security from the company.

The contract between the JDF and GM Challenger was inked in May 2014, and the company and the security ministry entered into an agreement in 2007.