Nov 26, 2015 News
A Memorandum of Understanding (MOU) which will see works restarting on the construction of the Specialty Hospital was signed yesterday between Minister of Finance, Winston Jordan, and Fedders Lloyd Country
Representative, Ajay Jha.
According to the Ministry of Finance, Fedders Lloyd will review the works already started; conclude a design of the Hospital that is acceptable to the coalition government and commit to fully equip the facility on completion of its construction.
The company also undertook to commence work on the facility immediately following the signing of the MOU.
Jordan said, “The signing of the MOU represents a tangible expression of Fedders Lloyd interest and commitment to move the project forward.”
He added, “The MOU is also testament to Government’s commitment to advancing health care delivery in Guyana.” He also restated the Government of India’s approval of an additional Line of Credit for the upgrade and modernisation of Suddie and Bartica hospitals and the West Demerara Regional Hospital.
Mr. Ajay Jha thanked the government for the opportunity to work on the project. He further remarked, “The Specialty Hospital will be a model not only for Guyana but also for the rest of the Caribbean.”
Work on the Specialty Hospital was initially halted after allegations of impropriety and fraud were leveled against the contractor Surendra Engineering Corporation Limited (SECL) which won the bid for its construction in 2012.
It was agreed that the company would provide services related to designing, building, equipping, testing, delivering, installing and commissioning of facilities for the facility in Turkeyen, East Coast Demerara. The cost of the contract was over US$18M.
In December of that year, Surendra Engineering received 20 percent of the contract price as an advance payment – approximately US$3.6M. In November 2013 an additional payment of US$649,440 was made.
The contract was terminated when Surendra reportedly attempted to submit a performance bond from a company in Trinidad and Tobago called ‘World Bankers Re Company Ltd’. Following queries, the Central Bank of Trinidad and Tobago stepped in to reveal that ‘Worldwide Bankers’ was not a registered company under the insurance act of Trinidad and Tobago.
Following the termination of the contract, Government moved to the Commercial Division of the High Court and sued Surendra. Government was claiming damages in excess of $100M, as well as special damages amounting to over US$4M.
Surendra had by then, flown the coop and had vacated its local office in Berbice when court officials visited to serve the writ, so when the matter was called twice, on January 21 and again on January 23, and no one appeared on behalf of the company, the court awarded judgment in favour of the Government of Guyana.
Following a court judgment awarded January 23, 2015, Government is still to collect over US$4M from embattled the Indian firm. It created a situation which left the future of the Line of Credit (LOC) threatened.
Following the APNU+AFC government’s accession to office, it reviewed the project and concluded that since there was no existing contract that could be enforced, it was impractical to continue to keep the LOC in its existing form, especially since it was attracting commitment fees.
Government therefore requested EXIM Bank of India to cancel the LOC for the Specialty Hospital and to reallocate the balance of funds to a project to modernize three Primary Healthcare Facilities.
However, the Government of India (GOI) in its response, while indicating its no objection and support for the modernization of Primary Healthcare Facilities suggested that the Granger administration consider salvaging the Specialty Hospital, as it will complement primary healthcare facilities in Guyana. The Specialty Hospital is intended to cater for high risk surgeries and other health care demands.
The administration having examined the merits of the proposal began searching for a willing partner to complete the Specialty Hospital using the remainder of the LOC.
In the interest of time, Government approached Fedders Lloyd to explore the possibility of the company completing the project. At the time of tendering in 2012, Fedders Lloyd, had also submitted a bid.
Fedders Lloyd’s bid was not only lower, but the company also had actual experience in constructing specialty hospitals across the world. Surendra, a spare parts fabricator for sugar mills across India, was found to have none.
Citing corruption in the matter, Fedders Lloyd subsequently registered its objections to the manner the contract was awarded under the PPP administration.
In spite of prior complications, Fedders Lloyd still expressed continued interest in the project and is prepared to complete and fully equip the facility.
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