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Documents show that fibre-optic deal and process was flawed May 8, 2007 Kelvin Parsons, Opposition House Leader and MHA for the District of Burgeo-Lapoile, asked questions today in the House of Assembly and released documentation related to the fibre-optic project. Parsons cited several pieces of correspondence from the boxes tabled by the premier in March that raise more issues regarding the circumstances of the deal. "Last month, the premier tabled information related to the fibre-optic deal in the House of Assembly," said Mr. Parsons. "We have completed our initial review of that information and we feel the documentation in those boxes confirm that this deal and the process used was flawed from day one. Today, we started unfolding that information and we will continue to bring forth new details over the coming days. "In this province, we have laws that outline a process that must be followed when awarding public money for contracts. That process usually takes the form of the Public Tendering Act or a Request for Proposals, but was not used in the awarding of the fibre-optic deal. In e-mails and briefing notes in the boxes tabled by the premier, it confirms that government was planning a Request for Proposals, but cancelled it upon the objections of officials at Persona Communications. As a matter of fact, the Deputy Minister of Industry discussed this issue with both Paul Hatcher and Dean Macdonald of Persona, who suggested they would not participate in this project if it went to public tender. As a result, government decided it would not proceed with a tender call. "In addition, after the awarding of the contract, government officials were very concerned about the media spin regarding the lack of a public tender. In an e-mail from an official in the Department of Innovation, Trade and Rural Development (ITRD) to Paul Hatcher of Persona, it stated, "As you may know, we're getting lots of media on the lack of an RFP. What has the consortium spent so far in engineering studies or environmental studies? We might be able to put our decision not to tender in perspective of the cost of preparing an RFP and then assessing it." If this project was so well-thought out and squeaky clean, why are officials trying to make excuses for the media on why there was no public tender call?" Parsons noted that other senior public sector workers were also concerned about the lack of a tender call and the lack of details regarding this deal. The Assistant Deputy Minister of Financial Planning and Benefits Administration in the Department of Finance asked a whole host of questions regarding this deal in an e-mail dated June 16th, 2006, and raised concerns about what the province would be getting from this deal. Instead of addressing the concerns of the Finance officials, the Department of ITRD froze her out of the process. Parsons also noted that according to several pieces of correspondence, government decided in late June/early July that the project would be done through the backdoor and put through Memorial (MUN) and the College of the North Atlantic (CONA). On July 17th, the Department of Finance raised new concerns about this approach to the proposal. The officials stated that pushing MUN and CONA into this deal would draw the attention of the Auditor General and would break the Financial Administration Act. "In the end, the project never did go through MUN or CONA because of the legal and financial problems that were identified. Once the fire took place at Aliant's facilities on Allandale road, the whole process ramped up once again to bring the project back to government and the decision was made to draft cabinet papers. According to the documents, public relations people thought the fire was a great way to sell the deal. "Even after the deal was approved by cabinet, there were many important financial details that were not finalized. As a matter of fact, On November 6th, Paul Hatcher of Persona wrote government and stated that critical financial details were still in flux and he proposed maintenance costs of an additional $750,000 annually on top of our $15 million investment. It is difficult to understand why government would approve this project before all financial details had been worked out. "Today's questions only reference some of the details of this deal. There are many more issues that will be brought forward in the coming days. It is interesting that government's paper trail backs up what we have been saying for the past several months, that this deal is certainly anything but squeaky clean."
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