Jun 10, 2010 News
…Fip Motilall still to import any heavy duty equipment
Following repeated attempts to get any member of the Hand in Hand Insurance Company’s hierarchy to speak officially on the Bonds that it issued backing Synergy Holdings Inc., Keith Evelyn, Director/Chief Executive Officer has broken the silence.
He explained the reluctance of the company to speak publicly on the issue. He said that this is because the business between any financial institution and its customers has to be held in the strictest of confidence.
“Only statutory declarations and information required by other lawful authorities ought to be disclosed.”
He said that the company will now comment in general, “and with our client’s permission.”
Evelyn explained that Surety or Bond business is a type of business which Hand-in-Hand is licensed to do and that it prides itself in being a leading provider of this “vital service to contractors and ultimately contributing meaningfully to nation building.”
He explained, “With these types of bonds, the insurance company would generally insist on its exposure being protected by some form of collateral.” According to Evelyn protection may be represented by cash, property or project equipment, counter guarantees and suchlike.
“Insurers also reinsure these risks…Usually; the final position is a combination of these. By putting together all the premiums it receives from a large number of contractors into an insurance fund, the insurance company can meet the claims of the few.”
Evelyn contends that with respect to the Amaila Falls Road Project, “the bonds issued to Synergy take effect and expire at different times.
He did not give any dates as it relates to effect and expiration of the bonds but the company’s CEO was quick to point out that with this level of exposure the company would want to be protected by some form of collateral.
The bonds were entered on March 31 last, ahead of the start up date for the Amaila Falls road project.
Evelyn did state that Hand-in-Hand has not withheld any bond it has issued with respect to Synergy and/or the Amaila Falls road project.
This newspaper had reported that Hand in Hand Insurance Company is in no danger of losing the US$3M it is prepared to post as bond for Makeshwar Fip Motilall.
Earlier this year, Head of NICIL, Winston Brassington, had remarked that in the wake of the government granting a US$15.4 million contract for the construction of the road leading to the Amaila Falls hydroelectric project, Hand in Hand had posted the bond on behalf of the contractor.
The bond will cushion the government in the event of a failure on the part of the contractor to deliver on the project and within the specified time frame of eight months. The bond is about 20 per cent of the project cost.
One of the Directors for Hand in Hand, has told this newspaper however that the bond will not be effected until there is some collateral provided by the contractor.
Asked to be more specific, the Director said that Motilall has pledged the heavy duty equipment he is scheduled to be importing to construct the road project.
According to the contract, Motilall was to have begun procuring the equipment from April 15, last, the first start-up date of the project. Since then Motilall has imported four all terrain vehicles and one grader.
According to a government statement, following execution of a Lump-Sum Design and Build Agreement between the government and Synergy Holdings Inc. in March this year, Government (represented by the Ministry of Public Works) received and currently holds two validly issued bonds from Hand in Hand Mutual Fire Insurance Co. Ltd., dated March 31, 2010, namely: Advance Mobilisation Bond for 10 per cent of the contract sum and a performance bond for 10 per cent of the contract sum.
“The GoG wishes to unequivocally state that neither of these Bonds is conditional on the Contractor importing project equipment or of providing any other form of collateral to the Guarantor, Hand in Hand…Such arrangements are strictly the business between Synergy and Hand in Hand Fire Insurance Company,” the government stated. The project, which is to get underway by July 15, entails constructing more than 100 miles of road where there are existing trails, a further 80 miles of new road through virgin forest, and construct bridges and pontoons.
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