Nov 28, 2015 News
By Kiana Wilburg
In spite of the criticisms over Government’s selection of a particular contractor for the completion of the Specialty Hospital, Finance Minister Winston Jordan says that he simply won’t respond.
Jordan said that on Wednesday, a Memorandum of Understanding (MOU) which will see works restarting on the construction of the Specialty Hospital was signed between him and Fedders Lloyd Country Representative, Ajay Jha.
According to the Ministry, 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 has also undertaken to commence work on the facility immediately.
But the decision by Government to bypass the tender process has not gone down well with several members of the public inclusive of Transparency Institute Guyana and members of the political opposition. They share the view that government’s actions fly in the face of transparency and accountability.
Pressed yesterday to say why Government did not go to tender and for a reaction to the mounting concerns, Jordan said, “We have nothing to react to. We put out a statement which clearly states what we did and that’s all we will say at the moment. Government is moving forward. We signed an MOU and not a contract. They are two different things and people need to understand that.”
But Chairman of the Public Accounts Committee (PAC), Irfaan Ali, insists that government’s selection of Fedders Lloyd flies in the face of transparency and accountability and proves that “the APNU+AFC is a deceptive and hypocritical administration.”
The former Minister stated, “This was the same people who said when we were in government that the Specialty Hospital is not necessary. They roasted us left, right and centre for going forward with this project. They even said that the money could be better spent on other projects.
“Lo and behold, this government is making an about turn and doing the same things they once chastised us for. How hypocritical and deceptive can one be? Do they intend to sink lower than this?”
He added, “There should have been public tendering for this project. It is in breach of international best practices. I want to remind the nation, too, that this is the very company (Fedders Lloyd) that was legally represented by the now Minister of Public Security, Khemraj Ramjattan when it protested the procurement process for the project back in 2012. Now that APNU+AFC is in power, their true colours are being revealed.”
Former Attorney General, Anil Nandlall, using social media, recalled that this was a project conceived by the former PPP/Civic Administration.
“But when the PPP/Civic Administration allocated money to do preparatory work (in the initial stages), the APNU+AFC sliced it out of the National Budget for three consecutive years. They advanced innumerable reasons, both in and out of Parliament, why this project should not proceed.
“Only three months ago, they announced the “official scrapping” of the project. The reason given then was that as a nation, we are not ready for this type of health care and they pledged to divert the financing into the improvement of primary health care,” expressed Nandlall.
He said that the APNU+AFC administration will now have to justify to the public, their actions regarding the project.
“Regardless of how they proceed, their position now clearly confirms that their postures on matters of national importance are not based on principle and upon merit but on what is politically exigent at the time,” expressed the former minister.
He noted, too, that during the procurement process in 2012 when the project was first tendered for, Fedders Lloyd was disqualified at an early stage, in accordance with the law and rules which governed that particular procurement process.
“At the time, the Leader of the AFC (Khemraj Ramjattan) led a public campaign advocating a case for Fedders Lloyd in the National Assembly and elsewhere. At the time, it was publicly revealed that he was hired to do so. I do not recall any denial from him then.
“Fedders Lloyd was never the second bidder in that process as some are trying to make out. It was disqualified at a very early stage on technical grounds. In addition, they have been publicly associated with and connected to the Alliance For Change,” said Nandlall.
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 at Turkeyen, East Coast Demerara. The cost of the contract was over US$18M.
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 the embattled Indian firm. It created a situation which left the future of the Line of Credit (LOC) threatened.
The APNU+AFC government, on accession to office, 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 re-allocate 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 Health Care Facilities, suggested that the Granger administration consider salvaging the Specialty Hospital, as it will complement Primary Health Care facilities in Guyana. The Specialty Hospital is intended to cater for high end 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 said that it 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.
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