Mar 15, 2013 News
The local contractor building section seven of the Amaila Falls Road will soon have his contract terminated, because of the need to accelerate the segment’s completion to facilitate the construction of the hydropower facility.
This disclosure was made by Head of the Presidential Secretariat, Dr. Roger Luncheon, during a post-Cabinet press briefing at the Office of the President yesterday.
Luncheon related that Government has asked China Railway First Company Limited, the contractor identified to construct the Amaila Falls Hydro Electric Plant, to consider constructing the problematic roadway, which involves the clearing of virgin forest.
Sithe Global, the developers of the Amaila Falls Hydro Electric Project, had expressed confidence in the ability of China Railway to build the plant. In July 2010, Government signed off on a loan deal to build the project and formalise the cooperation between the Guyana Power and Light Inc., Sithe Global, China Development Bank and China Railway.
The decision to engage China Railway was based on the Administration’s concerns about the capacity of domestic contractors to deliver the goods on time, according to the timeline established in the agreement with the firm that has been awarded the contract to build the hydropower plant, said Luncheon.
Until, an agreement is sealed between Government and China Railway the local contractor, Hassan Pasha, will continue to carry out construction works on the road. In 2012, Pasha was awarded the $834M contract to construct Section Seven, from the Kuribrong Bridge to Amaila Falls. The contractor who was executing works in Section Six, G. Bovell Construction Services, had his contract terminated months ago. That section is also behind schedule.
It was reported that the contractor was “challenged” in terms of machinery to carry out works and the project was stalled. According to Transport and Hydraulics Minister Robeson Benn, Government had to terminate Bovell’s contract after the equipment was repossessed.
The termination of contracts on this road project is nothing new. The original contractor, Makeshwar ‘Fip’ Motilall, repeatedly failed to complete what was required of him, and after several extensions, Government was forced to pull the plug on his contract in January 2012.
In 2010, Motilall was awarded the US$15.4M contract with an intended duration of eight months, which many deemed unrealistic. As time would tell, it was indeed an impractical time frame, with the road still incomplete to date. Motilall was expected to construct 110km of road through the forest as well as 85km where trails already exist.
The major reason for Government terminating the contract was Motilall’s failure to secure a performance bond, something that Minister Benn had described as a “fatal flaw”.
Benn had said that the performance bond was posted by Hand in Hand Insurance Company to the value of 10 per cent of the contract. There were in fact, two performance bonds, but one was the security bond. Together they were worth US$3 million.
Government has sued Hand-in-Hand Insurance Company in the wake of its failure to effect payment on a Performance Bond to the tune of in excess of US$1.5 million.
AUBREY NORTON FRIGHTEN RENEGOTIATION AND RING-FENCING
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