Apr 19, 2010 News
Amaila Falls US$15M Road Project…
– Hand-in-Hand Director
The decision by the Hand in Hand Insurance Company to back Synergy Holdings Inc. boss, Makeshwar Fip Motilall, rests with the significant support that the Government has placed behind the contractor.
This is according to a director of the company who spoke to this newspaper on condition of anonymity.
He said that the company was still protected even if Motilall failed to deliver on the road project.
The director insists that the relevant due diligence was conducted on Motilall especially after the insurance company had lost money in the Allen Stanford fiasco.
The director stressed that following the fiasco with Stanford, Hand-in-Hand was wary about backing Motilall. However, the huge government support that the project was receiving influenced the company to support him in the venture and put up the US$3M for the mobilisation and performance bonds.
The amount of coverage done, according to the director, was after a significant amount of risk assessment and due diligence.
On explaining the issue of the failure in Stanford, the director explained that the company had bonds that had matured and Hand-in-Hand was looking for good investments. At the time, the Stanford Avenue seemed lucrative, he said.
To the naysayers, the director pointed out that while Hand- in- Hand lost money in the Stanford venture, many others also lost in that investment.
The director said that the company is aware that it was people’s money that it is investing in the Amaila Falls Hydro Electric Project.
But he also stated that the company recognised the benefits of the project and the need for cheap power, “and like a good corporate citizen is making its contribution but with reservation given that we are
cognizant that it is investing people’s money.”
It was pointed out that much like the case with the company’s investment in the Berbice Bridge, risk analysis was conducted as well as due diligence and it has proven to be a good investment.
Dr Ashni Singh, in a recent press briefing, said that the government is satisfied that the interest of Guyanese will be protected as it relates to the US$15M award for the construction of the roads and related infrastructure paving the way for the Amaila Falls Hydro Electric Project (AFHEP).
According to the Minister, Government had “the customary safeguards” built into the contractual arrangement.
These, he said, include mobilisation and performance guarantee bonds to the tune of some US$3M posted by Hand –in- Hand Group of Companies to back Makeshwar Fip Motilall, the Head of Synergy Holdings Inc. who was awarded the US$15.4M contract.
According to Dr Singh, the bonds were part of a standard arrangement that secures and protects “our interest”.
He added, too, that the project will be continuously monitored and supervised to ensure that it is implemented successfully.
But for all that, it has been discovered that the US$3 million bond has not been reinsured by London. This means that any loss would have to be borne by Hand- in- Hand.
Meanwhile, Shadow Finance Minister, Winston Murray, said has that it is unfortunate, the manner in which the Government responds to enquiries to the point of imputing malicious motives.
In an invited comment, he said that the nature in which the government responded to the enquiries as it relates the US$15M Contract that was handed to Makeshwar Motilall, clearly illustrates the need for the Freedom of Information legislation.
Speaking on the issue of the contract itself, Murray had observed that the lowest bid for a project is not necessarily the best. He added that there have been several cases in the past where the lowest bids have been overlooked.
He said what is more important is to select a contractor who can show that he can successfully execute the project within the timeline expected, and with a minimal margin for failure.
Murray added that what is even stranger is that there is no overwhelming evidence to suggest that Synergy Holdings Inc. has the experience or capacity to conduct the project at hand.
Head of the National Industrial and Commercial Investment Limited (NICIL), Winston Brassington, had told media operatives that Motilall executed road projects in Florida and Georgia.
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