Smoking Gun (Adam Cartwright Trilogy Book 1) (9 page)

We stood looking at the panorama spread out below us for a few moments in a pensive silence. Something had stirred in my consciousness. Developing an open pit mine with moderate grade ore is a second best option. It means that the search for the mother lode has failed. Even though the mother lode is rarely found explorers should not give up looking. I looked across at Ted thoughtfully. During the past year I had learned much about gold mining and processing. But now I could visualise the story of gold before it is discovered and exploited. Gold mining was unique. It did not just produce a valuable product. It produced money. There was never a problem in being able to sell gold. Marketing the product from a gold mine was simple and sure. The only uncertainty was the price which was set by outside factors.

The memory of Ted Brennan’s lecture to me atop Lookout Hill that day remained with me and was to have an influence on me in the distant future.

***

Looking back I can see that there never was any doubt that I would eventually opt to complete the cutting through the ridge to provide a channel to discharge stormwater away from the processing plant. We are all captives by our sense of duty and sometimes forced to act by circumstances.

I was the man on the spot and had identified what I believed to be a problem. But that was not all, I also believed that I had a solution at my fingertips. My sense of duty was telling me that I should accept responsibility and do what I knew to be needed. Even so I had put off making the final commitment until the last minute just in case I was somehow overtaken by events and did not have to make a decision. A decision that would exceed my delegated powers and would almost certainly rebound on me.

Nevertheless I could not back off. Perhaps the design engineers were correct and I was arrogantly dismissive of views contrary to my own. I did not have to do anything as my backside was definitely covered if the plant was flooded. On the other hand, even if I was off the hook, Gibson Construction would be exposed to substantial damages if the drainage system was later proven to be inadequate and the plant was flooded. They were at risk not just during construction but later as well, during operation of the plant. The turn-key contract required Gibson Construction to design, construct and deliver a processing plant and facilities for a lump sum price. If the plant was shown to be inadequate in any way, including being subject to flooding, Gibson Construction would be liable to pay damages and also rectify the problem.

Unfortunately for Gibson Construction, if there is a costly flood in the future, they could not deny knowledge of a potential problem with the stormwater drainage scheme. My correspondence identifying the risk of flooding would ensure that they would be held to be liable.

I had been employed to use my judgement so that was what I would do. As soon as I had returned to my office I sent an email to Jack Gilmore stating that I would continue work on the stormwater discharge cutting until it was completed. It was a formal request for him to have the work carried out by the mining contractor and have the cost charged to me as had been done to date. Five minutes later he replied with an email confirming my request and his agreement to have the work carried out.

The die was cast. Whatever the outcome it was the only course of action acceptable to me. I would have no regrets, no matter the consequences.

***

During the past week I had not been aware of anyone looking at me sideways or acting suspiciously. It was now almost seven days since I was attacked and I still had no idea who my assailants were or why I had been targeted. Admittedly I had not gone around the whole week thinking only of events the previous Friday. I had enough on my plate to keep me occupied.

Project milestones incorporated in my revised construction schedule were weather-centric, taking the expected seasonal heavy rainfall into account. February was usually the peak rainfall month but heavy rain storms could hit the project anytime from late November through to late April. A common misconception held by lawyers drawing up construction contracts is that one day of bad weather should not delay a construction schedule more than a single day. In fact most standard building contracts provide for wet weather adjustments to the target completion date by just one day for each day of rainfall. However, in the real world, one day of heavy rain could lead to project delays of several weeks. The actual impact on the project would depend on what stage the project was at when the rain storm occurred. If foundations were exposed and roads and drains incomplete then heavy rain could cause storm damage that might take days to repair. Sometimes a day of heavy rain might prevent access by heavy equipment for a week or more.

Consequently I planned to complete all the foundations, drainage and site works before November. Also the import of heavy equipment onto the site was scheduled to avoid the January to March period if at all possible.

Apart from completion of the stormwater diversion cutting, which wouldn’t be completed before January, I was satisfied with progress of all the critical project activities. I had also been satisfied with our efforts to keep the project within budget. As far as I was concerned the project was ahead of schedule and under budget. But as I logged on to check the latest project cost figures I was surprised to learn that although the project was still under budget the savings were nowhere near as substantial as I had expected. Something was wrong. I knew that I had saved more than $300,000 on the concrete aggregate alone. All around the site I had been making gains. It just didn’t add up. Costs to date should have been much further below that budget.

Maybe I had taken my eye off the ball somehow. I walked out of my office along to the project accountant’s cubicle. But I was too late. She had joined the weekend exodus on the Friday afternoon flight to Cairns. I would have to wait until Monday to get her explanation, if she had one.

***

I often spent the weekend on the project site. Especially after a major concrete pour late during the week. That was usually the weekend that the number of workers on site was much reduced. It gave me the chance to wander around and check out the work done during the week unimpeded. It also gave me the opportunity to talk to some of the workers and get their feedback on an informal basis.

Initially I was not particularly concerned about the project’s budget situation as I expected it to be easily resolved when I sat down with the accountant. I monitored project expenditure on a contract by contract basis whereas the accountants recorded costs in accordance with the Chart of Accounts. I did expect that there would be timing differences on occasion but they would sort themselves out eventually.

I had developed a series of financial analysis computer programs in my own time. It was just a hobby, an intellectual exercise, but I used one of the programs to collate project costs and update the forecast of the final total capital expenditure. Initially I had used Excel to develop the logic but later switched to a computer programming language. I could now compile the programs so that they would run on a range of computers.

My satisfaction with the information generated was such that I had been toying with thoughts of having Brian Clements assess whether they had any commercial potential. But for now it enabled me to monitor the project’s financial performance and compare outgoings and commitments with the budget amounts provided. As each contract variation was approved I would input the additional amount and revise the project forecast.

After my evening meal I returned to my office. I wanted to review the site webcam videos for the day as was my frequent practice. One of my first decisions on the project site had been the installation of a ten metre high mast on Lookout Hill. It was a steel tube with a metre square steel plate platform capping. On top of the cap was a solar panel that recharged a group of batteries in a steel box at ground level. Immediately below the capping were four webcams that provided three hundred and sixty degree coverage. All activity on the mine site could be monitored twenty four hours a day. The only limitation was that if no light was detected by a camera it would stop recording and go into hibernation mode.

In some ways I had created a rod for my own back as I was not the only person with access to the webcam feed. The Gibson Construction teams in Townsville and Brisbane could login and observe site activity live. As could the mine owner’s people based in Melbourne. I would often receive a phone call from someone in either Townsville or Brisbane with a query about something taking place on site. If anyone in Melbourne had a query they would call the Project Manager in Brisbane who would then call me.

The installation of the webcams had achieved another objective. It reduced the need for the Project Manager to visit the site, a situation that suited us both. I think that he was happy to be able to avoid the dust and noise of a busy construction site, and I was happy to avoid seeing him.  When I had provided the means for him to witness the activity on site without leaving the air conditioned comfort of head office, I had given him an excuse to stay away and he had accepted it willingly.

However, I had provided for access by offsite personnel to just three of the four cameras. The three accessible cameras each had one hundred and twenty degree coverage. In theory I could have covered the complete site with only three cameras but I had overlapped the field of view for each camera by forty five degrees leaving the fourth camera to cover the remaining ninety degrees, plus fifteen degrees on each side. The fourth camera looked back up the ridge from Lookout Hill and covered the concrete aggregate quarry, aka the stormwater cutting. Jack Gilmore was the only person, apart from me, that had internet access to the feed from the fourth camera.

The setting up of the webcams had been a major breakthrough in monitoring the construction work. I could check on activities directly when I was either offsite or in my office. Since the webcam feeds were stored in the cloud they could be readily retrieved and used to settle disputes. I had already made use of the visual record of events on several occasions to defuse complaints before they could gather momentum.

As events unfolded later the webcams would help resolve a different sort of problem. A problem that I had no preconception of when the webcams were installed.

***

As requested in a note that I left on her desk Leonie Wran, the project accountant, arrived in my office at nine o’clock on Monday morning to discuss the project costs. She was a bustling, energetic woman of uncertain age who took her job seriously. She was not a nine-to-five clock watcher. Learning that there was a possibility that there was a gremlin lurking in the project cost reports did not start her week off well. She was intent on resolving the matter but not concerned that it might rebound on her.

It was not the first time that we had met in order to reconcile my personal project calculations with the official accounting records. Previously I had been able to accept that the differences were within the possible range of timing differences. That is the time between expenditure being committed to and when payments are actually made and entered into the accounting records.

When Leonie Wran arrived in my office she had her laptop computer as I had requested and was bearing an armful of folders. I smiled when I saw that she was also carrying a cup of coffee. She had come prepared. The only warning that I had given her in my note requesting this meeting was that it might take some time. She had obviously taken my comment seriously.

I motioned her towards a seat opposite me at my desk. “Leonie, hi. I hope that you are refreshed and ready to help me unravel a mystery. I am hoping that we can quickly resolve it but I have spent the weekend on this and can’t see a simple explanation.”

Probably thinking back to the previous occasions when I had sought a reconciliation of project budget and actual costs she responded cheerfully. “Let me see what the problem is. I’m sure that we can work it out.”

Her expectations were the same as my hopes. That there was a simple explanation and that we would soon find it.

Her confidence in us quickly doing so was greater than mine. But, that wasn’t really surprising as I knew something that she didn’t.

***

I had spent most of Saturday reviewing my records of contract commitments and comparing those with payments approved and actually paid. Of the total $210 million project budget, Gibson construction was responsible for $156 million. Equipment procurement of about $50 million was controlled by the Project Manager based in Townsville. I was responsible for the remainder, almost $105 million.

The bulk of the $105 million, about $70 million, was tied up in contracts to install and commission the gold plant, crushers, mills and processing plant. The remainder was for power generation, water supply, accommodation and administration facilities, site roads and drainage, foundations and buildings. Plus construction management and commissioning costs that added up to several million dollars.

The major contracts were not a concern to me. So far there had been few payments made, albeit for hefty amounts. Keeping track of those contracts financially was easy as only a couple of relatively minor contract extras had been approved.

The grey area was the $30 million or so of site works that I controlled directly from the site. Wherever possible I had bundled up the work into contract packages and negotiated fixed prices with subcontractors. However, in many cases I had to accept cost plus contracts due to the need to expedite the work and complete the foundations, roading and drainage work before the end of October. This appeared to be where a problem lay. About sixty percent of the budgeted $20 million of cost plus contracts had been completed. I had expected that the cost to date for that work would have been around $11 million. But it was almost $500,000 higher. Still below budget, but from my point of view around $500,000 too high.

In order to monitor and control these cost plus contracts I had engaged an additional two inspectors and a quantity surveyor. I could now be sure to have at least two inspectors and one quantity surveyor onsite at all times. All cost plus contracts were based on estimates of man-hours, materials and services. Each contractor had to submit weekly statements of work done and report actual, or potential, variations from the estimates.

The system was simple and should have eliminated the chance of any surprises. Each of the weekly statements for the cost plus contracts had to be checked and approved by either one of the junior engineers or one of the inspectors. All physical quantities had to be verified by a quantity surveyor. After that the weekly statements were accumulated for each contract and used as the basis for approving payments to a contractor.

I was provided with a summary for each cost plus contract as a new weekly statement was received and input that information into my project monitoring program.

During the past weekend, I had spent much of Saturday checking my program for errors. I found none.

By late Saturday afternoon I had reached the conclusion that there was a disconnect between the total value of contracted work reported in the weekly statements and the cost plus contract payments made.

Somehow payments had been made to cost plus contractors that exceeded our records of the agreed value of the work done. This was not a matter of timing. There was a problem. A potentially serious problem.

***

It was eight p.m. on Saturday when I returned to my quarters at the end of my working day having just completed my evening meal. It was time for the News update so I turned on the television and sank back in my easy chair.

My main interest had been the weather forecast but there was nothing to immediately worry about. Some areas of low pressure had formed in the Coral Sea but were not expected to reach the Queensland coast. Not this time anyway, but the meteorologist proclaimed that the low pressure areas were developing earlier and more intensely this year. In another month or so these low pressure cells could be expected to develop into cyclones and threaten to come ashore. Even if cyclones did not develop, these areas of low atmospheric pressure will almost certainly bring heavy rainfall to the coastal region and extend inland to the Atherton Tableland. I automatically translated that to include Red Rock.

I was sceptical of the meteorologist’s claim that mankind was responsible for global warming but I accepted that if global warming was taking place it would inevitably lead to greater extremes of weather. That being so I was thankful that I had opted to complete the stormwater cutting. My only concern being that I would like to have had it completed already. If the meteorologist was right then the seasonal storms might be earlier, and more intense, than usual.

The next News item was about the Queensland Government’s Opposition Leader claiming that extortion allegations against unions should be investigated by the Queensland Crime and Corruption Commission. 

His diatribe could probably be written off as meaningless political posturing. One did not have to be a cynic to wonder why the Opposition Leader had not done something about it when he was Premier just a few months ago. On the other hand it was a topic that I should not ignore as it could well impact on construction contracts such as the Red Rock Mine.

The Opposition Leader was either a very good actor or he had a sincere belief that something needed to be done. He vehemently claimed that there was a long history of intimidation and unlawful strikes by the Construction Workers Union during a number of capital works projects that had cost taxpayers millions of dollars. He cited the case of the Children’s Hospital in South Brisbane which had cost an unnecessary $8 million extra due to illegal Union stoppages.

Most of his allegations I had heard before. I had already known that the Federal Government’s Royal Commission into Union Governance and Corruption had found conduct which constituted blackmail and extortion by officers of the Construction Workers Union. They had also concluded that the behaviour of Construction Workers Union’s officials in Queensland and other states contravened the boycott, cartel and other provisions of the Competition and Consumer Act.

The Opposition Leader had concluded by stating that at least a dozen unionists in Queensland had already been found guilty in the Federal Court of causing unlawful stoppages on multi-million dollar Government projects.

When the News item concluded I sat back thinking about how complicated real life could get when compared with what one expects when young and inexperienced. Nothing at university had fully prepared me for the range of issues and events that I had already encountered as a construction engineer.

Saturday night’s News was a case in point. The two leading items were the potential for storms and the unlawful behaviour by Unions. Both could be highly relevant to the Red Rock Project and I needed to have a strategy to deal with each of them if, or when, they became an issue at Red Rock.

I was already concerned that I had a problem of fraud by a Gibson employee either alone or in collaboration with an outside contractor.

Those were three issues that we never considered at university. There it had been mostly about engineering mathematics and other physical sciences. Sure we had covered contract law, report writing and some other non-science topics but it was all hypothetical. There when we had a problem to solve we had the question spelled out for us. We just had to decide on the answer.

But in real life we may not even realise that there was a question to be answered. So, we had to first decide just what the question was. Then, we had to decide what the answer was. It had all been so easy at University. Here in the real world at Red Rock I had three potential issues; storms, corrupt Unions and fraud. I could just ignore them, treat them as being unlikely to occur, and focus on construction of the project. But to do so would be to ensure a catastrophe if any of the issues became an actual problem.

Whatever I did next was clearly going to be a judgment call. I did not want to waste time by jumping at shadows but I decided that I could not ignore the risks associated with storms, corrupt Unions and fraud.

Dealing with storms needed engineering solutions. At least I knew where to start with them and I was knowledgeable about what could be done.

But the issues of corrupt Unions and fraud were something else. I did not know where to start. Thinking back to the TV News item I decided to learn more about the Queensland Crime and Corruption Commission. And the best place to start was the internet.

It only took a few moments to locate the website for the Commission. It made interesting reading.

The Crime and Corruption Commission had evolved from the Criminal Justice Commission which had been formed in 1989 after the Fitzgerald Inquiry into police corruption. At the same time the Queensland witness protection service was created. The new Commission’s role was to investigate police and public sector misconduct and to work with the police to investigate organised and major crime.

In 2001 the Queensland Government decided to form a single body to fight crime and public sector misconduct. That led to the creation of the Crime and Corruption Commission which now has oversight of the police and the public sector as well as providing protection for witnesses.

As I read through the list of the Commission’s functions, it seemed that the Commission’s number one priority was investigation of organised crime. Next in its priorities was receiving and investigation of allegations of serious or systemic corrupt conduct, followed by witness protection.

The Commission has wide ranging powers but is subject to three distinct monitoring agencies and is far from a being a law unto itself.

First, the Commission has to report to an all-party Parliamentary Crime and Corruption Committee every two months by way of public and confidential reports and submissions. Second, it is also subordinate to the Supreme Court of Queensland which reviews some of its decisions and must give its approval before the Commission can exercise some of its powers. Third, the Public Interest Monitor ensures the Commission’s compliance with key legislation, including examining their applications for warrants to carry out covert searches and surveillance.

The Public Interest Monitor’s primary role is to represent the public interest where law enforcement agencies seek approval to use search powers and surveillance devices that have the capacity to infringe the rights and civil liberties of citizens. It monitors the Commission’s applications for, and the use of, surveillance device warrants, retrieval warrants and covert search warrants.

It had been an eye-opening experience to learn about the Commission. There was no doubt in my mind. If there was an issue of corrupt unions and fraud here at Red Rock then it would clearly fall within the Commission’s ambit. Noting down their contact details I decided that if, and when, appropriate I would get in touch with the Commission. It was reassuring to at least have a plan.

***

After my regular eight kilometre run early on Sunday morning I felt physically and mentally refreshed. I then realised that I had allowed myself to be sidetracked the previous evening and get too caught up in possible problems instead of first addressing the matter in hand. My post run euphoria had cleared my mind and enabled me to get my thinking back on track.

What I needed to do was to focus on resolving the discrepancy between the accounting system data and my construction management program. And that is just what I would do later that day.

Immediately after breakfast I did a site walk around. Some work was still in hand and I was soon engaged in work-related discussions and getting explanations where I had a question regarding the work being done. One thing that I could count on was that within minutes of my arrival on site, all of the foremen and leading hands knew that I had arrived. They would then make themselves highly visible and try to ensure that I did not talk to members of their team without them being there to participate in any discussion.