By Gary Eleazar
Now that the Government has terminated the contract with Synergy Holdings headed by contractor Makeshwar
‘Fip’ Motilall, for failing to perform and failing to secure another Performance Bond, Hand-in-Hand Insurance Company as well as Wm Fogarty Ltd now stands to lose hundreds of millions of dollars.
The government has laid claim to the original Performance Bond issued to Synergy Holdings Inc to the tune of US$1.5M and according to Public Works Minister Robeson Benn the government is expecting the Insurance Company which has already incurred some losses in the Stanford fiasco to make good on the payments.
Hand-in-Hand had also issued a mobilization bond to Synergy Holdings but this has since expired.
Hand-in-Hand in its financial report for the company in 2010 had listed under Contingent Liability, the Amaila Falls Hydropower Road project.
In that report it was stated that the Government of Guyana had granted to contractor, Synergy Holdings Inc the authority to construct the road to Amaila Falls and the Transmission Line Clearing Project.
It said that on March 31, 2010, Hand-in-Hand on behalf of Synergy Holdings Inc issued advance Mobilisation and Performance Bonds totaling US$1,540,000 each.
“At the onset, these bonds were collaterized by a guarantee from Wm Fogarty’s Ltd to the extent of US$500,000 for the initial four-month period.”
The Financial Report for Hand-in-Hand also said that the, “Advance Mobilisation Bond which expired on November 18, 2010, has since been released by the Government of Guyana.”
It further states, “The Hand-in-Hand Mutual Fire Insurance Company Ltd remains responsible for the current performance bond, which is to be secured by counter guarantees in the form of: Escrow Account to the extent of US$500, 000; Debenture on the machinery/equipment for the difference.”
The formal announcement that Hand-in-Hand was issuing the bond came during intense scrutiny of Synergy Holdings and Motilall’s ability to complete the road just one month after inking the contract.
It was at that time that Executive Director of the National Industrial and Commercial Investments Limited (NICIL) Winston Brassington, who along with his Deputy, Marcia Nadir-Sharma and Finance Minister Dr Ashni Singh, hosted a press briefing to clear the brouhaha that followed the announcement by Bharrat Jagdeo that Synergy Holdings Inc, headed by Makeshwar Motilall, had secured the contract.
Brassington at that time told media operatives that there need not be any worries given that there are safeguard measures in place to ensure that it receives what it is being tendered for, hence the mobilization and performance bonds.
It took more than two years of intense media scrutiny and exposures coupled with the then imminent failure on the part of Motilall before the Government moved against him and terminated the contract.
When asked about due diligence at that time, the administration in the person of Brassington had told media operatives that this was left up to the institution that backed him with the bonds, namely Hand in Hand.
Originally there were several bidders, including a consortium comprising, B&J Civil Works, Ivor Allen & Dynamic Engineering Co. Ltd with a bid of US$16.65M; BK International Inc with a bid of US$21.1M and Roopan Ramotar with a bid of US$26M.
Synergy Holdings Inc’s bid of US$15.4M was the successful one and it was pointed out that before an evaluation of the proposals was undertaken, the persons submitting proposals were first examined to determine whether they satisfied the pre-qualification criteria/process which was set out in the advertisement and the tender documentation.
The prequalification process was an assessment of the applicable experience of the potential contractor; availability of equipment, access to materials, adequacy of personnel of the potential contractor to perform the job and capacity of the potential contractor to undertake the scope of the works within the allotted timeframe among others.
When asked if the administration would be willing to provide the proposal by Motilall for an independent scrutiny apart from the evaluation team, the government responded in the negative, adding that it was for the Auditor General to conduct such an exercise.
Brassington explained further that it would set bad precedence in that this would have to be facilitated for all of the bidders.
The Amaila Falls Hydroelectric Project is just part of a larger effort to revolutionise Guyana’s power generation infrastructure. The storage dam site would be located near the top of Amaila Falls and would impound the waters of both the Kuribrong and Amalia Rivers.
An overland trail exists from Kaieteur to Amaila. Access is also provided overland by an all-weather road through Tumatumari on the Potaro River and on to Mahdia and Kangaruma.
River access along the Potaro-Kuribrong Rivers to the foot of Amaila Falls involves several portages around rapids and waterfalls.
The road from Tumatumari was recently extended to Mahdia/Kangaruma that brings you closer to the site but approximately 30 miles of additional roads will need to be built to the top of Amaila Falls.
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