Jan 16, 2012 News
By Gary Eleazar
Makeswhar ‘Fip’ Motilall the President of Synergy Holdings, whose contract for the construction of the Amaila Falls Hydro Electric Plant Access road was recently terminated, had signed away any ‘right to seek legal redress.’
Motilall on Thursday last told media operatives that he was exploring the legal options available to him, but yesterday in an invited comment he conceded that in the contract he had signed away the right to seek legal redress.
Motilall in the ‘Agreement for Completion’ contract that he signed on December, 21, had essentially given up on any legal redress against the Government of Guyana should he fail to meet the criteria.
In an invited comment, yesterday, Motilall told this publication that it was a bad idea at the time to sign to such an agreement but said that he “had good reasons to do it.”
He refused to divulge what his reasons were but said that he is currently in consultation with his attorneys to explore the options that are available to him.
In the contract that Motilall signed, it stated: “Failure of Synergy Holdings Inc. to present to the Government of Guyana a valid Performance Bond from an acceptable institution to the value of 10% of the Contract Price on or before January 10, 2012, will result in immediate termination of the contract, with SHI giving up the right to any legal redress.”
Reference to Motilall giving up his right to legal redress appears more than once in the contract.
In the clauses that deal with the revised April 30 deadline, the contract stipulates that, “This deadline will only be extended for reasons of excessive rainfall, as determined by the Client (Govt.)…Should the Contractor SHI fail to meet the deadline of April 30, 2012 or the extended deadline as determined by the Client, then the contract will be terminated with SHI giving up the right to any legal redress.”
Motilall sought to make some damning statements against the Government, telling media operatives that at times, “the client (Govt.) doesn’t always do what the contract says.”
He said that on the part of the rain delay it was fair to give an extension as in the case with a design flaw that caused another delay.
However, he argued that he needed more time as a result of a 63 per cent increase in the materials needed.
“We should be reasonable about the rains,” said Motilall also as he sought to justify why to this day, the road has not been completed.
In the contract dated December 21, 2011, despite Motilall’s assertions to the media, it had catered for the change in designs and rain.
The contract that he signed onto said that, “The Contractor will be compensated for any increased amount paid for fuel used on the additional road widening works.”
It had also catered for the increased ‘Cut and Fill’ as according to the contractual agreement, “The Contractor will be compensated for the additional cut and fill works in order to construct all favourable road grades.”
In addition to the other contractors that Motilall had been introduced to by the Government of Guyana, to assist with the completion of the project, he was supposed to have turned over a section of the upgrade works to Toolsie Persaud Quarries, which had previously maintained the section that was slated for upgrade.
The Government on Thursday last announced that it cancelled the US$15.4 million Amaila Falls Hydro Project contract it signed with Synergy Holdings Inc, headed by Motilall.
The announcement came from Minister Robeson Benn at his Kingston office.
After three deadline extensions, Synergy Holdings had completed a mere 40 per cent of the works as of December 2011.
One of the many reasons given for the project cancellation which was handed to Motilall in March 2010, under the Bharrat Jagdeo Government, was the repeated urgings by Government and interventions from the Project Engineer and the Consulting Firm to have the project completed.
However, the major reason was Motilall’s failure to secure a performance bond, something that Minister Benn described as a fatal flaw.
Government has since moved to lay claim to the original performance Bond, which was issued by Hand-in-Hand to the tune of US$1.5M.
Motilall was unable to secure a second bond to facilitate the extension that was afforded him to finish the road by April 30.
Benn, reading from a prepared text, said that the termination of the Contract will result in the Client taking the following actions: Application of liquidated damages at the rate of US$10,000 per day, from January 1, 2012 to the date of termination, January 12, 2012; seizure of Contractor’s Retention sum; Seizure and taking ownership of all pieces of equipment and all other property used by the Contractor on the Amaila Falls Access Road Project and seizure of the existing performance bond.
Benn added that the Ministry of Public Works will be taking steps for the continuation and completion of the remaining works.
The decision is in accordance with Article 9 of the original contract and is also consistent with the terms of the Agreement for Completion executed on December 21, 2011 between the Ministry of Public Works and Synergy Holdings Inc.
The second agreement which was signed by Permanent Secretary in the Public Works Ministry, Balraj Balram for the government, and Makeshwar Fip Motilall for Synergy Holdings Inc. contained a clause headlined ‘Failure to provide a valid Performance Bond’.
Motilall agreed to “Provide a valid Performance Bond to the Government for the period of the execution of the remaining works and for the Defects Liability,
“Failure of Synergy Holdings Inc to present to the Government of Guyana a valid Performance Bond from an acceptable institution to the value of 10 per cent of the Contract Price on or before January 10, 2012 will result in the immediate termination of the contract.”
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