No personal benefits from paving contract: Coleman

Liberals, NDP question dropped Humber Valley Paving work

Published on May 6, 2014
A fleet of vehicles parked outside the Humber Valley Paving office on White Lane Road in the Watson’s Pond Industrial Park area Thursday.
— Photo by Geraldine Brophy/The Western Star

Incoming premier Frank Coleman says he did not benefit personally from a decision by the Department of Transportation and Works to release his former company, Humber Valley Paving, from contracted work without penalty.

The company was hired in May 2012 — while Coleman was still at the helm — to complete roughly 80 kilometres of road construction for the new Trans-Labrador Highway. It was paid $11.8 million, for what the provincial government says represents completing roughly 60 per cent of the total work.

The province could have pushed for compensation for the failure to complete all of the work as stipulated — through two $9.5-million bonds set down before the construction work began.

It chose not to and, instead, the company was released from its obligations.

The unfinished paving is now being re-tendered for completion later this year, packaged with roadwork in Happy Valley-Goose Bay.

Coleman told The Telegram he wasn’t involved in the paving business after Feb. 14 on a day-to-day basis, and sold his shares in February. He said he also wasn’t involved in the discussions around the cancelled government contract.

“My shares were sold. This is a decision that the new management team made, along with the Government of Newfoundland,” he said.

“It was the right conclusion both for the company and the province,” he added.

He did not dispute the release of Humber Valley Paving without penalty was unprecedented, though that point has yet to be confirmed.

Coleman did ask if it would be better, on the other hand, for government to never negotiate with companies and automatically force contract issues into the courts.

“It really bothers me to see people taking shots at the new owners of Humber Valley Paving for conducting their business in what I would call an absolutely reputable manner,” he said.

He noted he has been instructed by the company’s new owners, as well as personally advised, to not discuss details of the company’s standing, or his dealings with the company, in public.

With that said, “I can absolutely tell you there is absolutely nothing untoward here,” he said.

The Humber Valley Paving contract was at the centre of Question Period in the House of Assembly Monday afternoon, with a barrage of questions from Liberal MHAs Andrew Parsons and Tom Osborne, and NDP MHA George Murphy.

Minister of Transportation and Works Nick McGrath ignored individual questions and instead used his response time to, step by step, walk through decisions made around the contract work and the reasoning for those decisions — as much as has been conveyed to individual reporters over the past week.

“Again, Mr. Speaker, as I said unequivocally, never — never — have I had, as the Minister of Transportation and Works, a conversation with Mr. Frank Coleman concerning this issue.

“We dealt with the contractor themselves on any conversations we had.”

When it comes to the cancelled contract, he later told reporters, his dealings were with Gene Coleman, who was a director of Humber Valley Paving at the time. He described him as a longtime company spokesperson.

“When it comes to the shareholders of the company, it’s immaterial to us as a government,” he said.

“In no way, shape or form would I be influenced because of the personality or the relationships that I was dealing with when dealing with any contractor,” he later reiterated.

Parsons said he is not convinced of the focus for McGrath.

“I think we have to lay out the facts as we know them right now. The incoming premier, Mr. Frank Coleman, resigned from the (company’s) board I believe March 10. There was an offer, or a conversation on March 13, or a decision made that the bond would be released. This (release) was done March 31,” he said.

Coleman’s resignation from the company was effective March 10, as per registered documents.

“We know that the minister said that the premier was in on this and there was obviously indirect negotiations involving Frank Coleman, his son Gene Coleman, the minister and the current premier. So I’m going to put that out there and say there’s a huge, huge conflict of interest in play here,” Parsons said.

Staff with the Department of Transportation and Works are gathering a collection of documentation related to the contract for public release, in the interest of transparency on the subject.

That release may come as early as today, according to a spokesman.

As for Gene Coleman, the man who convinced the provincial government to forego seeking penalties against Humber Valley Paving, he left the company’s board of directors effective April 23.

The company’s listed directors are Michael Coleman and Robert Coleman. Ownership of remains unclear, as does the current leadership team. A spokesman for the company has refused to discuss the private business.