Dec 07, 2015 News
In the coming weeks, the State Assets Recovery Unit (SARU) is expected to zero in on all aspects of sole sourcing which occurred between the previous regime and New Guyana Pharmaceutical Corporation (New GPC), which is owned by Dr. Ranjisingh ‘Bobby’ Ramroop. He is said to be the best friend of former President and now Opposition Leader, Bharrat Jagdeo.
SARU’s Head, Dr. Clive Thomas emphasized that he is interested in examining all aspects of possible corruption involving the state’s assets in any sector. It is upon that premise that Dr. Thomas said his office will “Zero in on the sole sourcing of drug contracts” under the previous regime as he believes it involves “Some of the most disturbing cases of misappropriation of the state’s finances.”
The Economist said, “Sole sourcing has the potential for corruption to take place and I am of the firm belief that this type of procurement was highly abused by the former administration. But at the same time I want to make it clear that I am not saying that all sole sourcing is unlawful. Once used in the correct circumstance where there is an emergency and it can be proven that only one particular company can provide what is needed, then of course, one can be allowed to proceed.”
Dr. Thomas said that in the case of NEW GPC, “There was no need to have this company be given the lion’s share of the drug contracts because it was not a case where it was supplying drugs that no one else could have provided for us. There was no emergency to justify using this one company alone in many instances and so the PPP simply helped this one man to build an empire in the Health Sector.”
The SARU head said that Guyana, in the process, lost billions of dollars in sole sourcing drug contracts as opposed to allowing other qualified bidders to “Get a fair shot and more importantly, allowing the country to get more competitive price through tendering.”
He reminded that the Auditor General, Deodat Sharma also conducted a special report on sole sourcing. Dr. Thomas said that even though his office has not seen the document, he is eager to see its findings which he would also use as a guide or a supplement for his own groundwork.
Dr. Thomas continued, “I also want to emphasize the point that there was significant loss of state capital under sole sourcing and the estimate by the former Auditor General, Anand Goolsarran was over US$140M which was lost through the procurement process. So indeed this is something we are going to look into in-depth and have already started to some degree. We cannot allow certain injustices against this nation to just slip by us.”
Chartered Accountant, Anand Goolsarran, contended in various instances that the weak systems of the National Procurement and Tender Administration Board (NPTAB) need to be addressed by the new administration once and for all as they are costing the country approximately $28B annually.
Goolsarran said that it is critical for the Ministry of Finance to review the operations of NPTAB, given the fact that the agency has been cited by the Auditor General for numerous cases of financial discrepancies.
He emphasized that about 70 percent of the national budget relates to public procurement.
The former Auditor General then pointed to credible allegations of corrupt behaviour in public procurement. These included sole sourcing of drug contracts to Ramroop, contract splitting, inflated engineer’s estimates, evaluation bias on behalf of favoured contractors, the use of inexperienced contractors, the absence of competitive bidding in some cases and overpayment to contractors.
Goolsarran said that at least, some $28 billion or US$140M is lost annually by looking at those areas. His estimation was garnered from an overview of the Auditor General’s reports on the country’s accounts over the past few years.
A Partnership for National Unity and the Alliance for Change (APNU+AFC) have also spoken against the award of billion dollar drug contracts in favour of the New GPC owner, while bringing particular focus to the manner in which the previous administration changed the laws to ensure that Ramroop’s company would be used for the sole sourcing of drugs.
When it served in the Opposition, the current administration had lashed out at the PPP/C for granting billions of dollars worth in contracts to NEW GPC during the lead up to the May 11 National and Regional Elections.
On May 8, last, New GPC uplifted the entire billion-dollar cheque for a drug contract awarded to it by the PPP/C administration.
That was the last working day before General and Regional elections. The payment arrangement was also contrary to all the country’s procurement procedures.
AFC Leader, Khemraj Ramjattan, had described the situation surrounding the health contracts and New GPC is nothing but “kick-down-the door banditry.”
Foreign Affairs Minister, Carl Greenidge, had said that he finds the actions of the previous Government in the lead up to the May 11 polls, to be evidence of how “evil, corrupt, greedy and ruthless” it can be.
He had stated that days before May 11, the past administration sought to chastise the media, particularly Kaieteur News and Stabroek News when the entities exposed its “nasty and most corrupt acts.”
This newspaper had reported that the former administration had given out contracts for the procurement of drugs worth some US$12.8 million ($2,677,864,510) to New GPC.
Three Cabinet Minutes had been leaked and reproduced in the electronic media. The document showed that Cabinet approved its most expensive contract for $6,730,526 dated April 23, 2015. It was signed by former Cabinet Secretary, Dr. Roger Luncheon.
Greenidge had said that the PPP/C has given so much to Dr. Ramroop by breaking the laws that it has made him “a king in his country.”
“Another critical point we need to pay attention to, and that is the fact that Ramroop was given the opportunity to supply almost 85 percent of the country’s drugs for nearly 20 years. Considering the empire he has been able to build through the sole sourcing of drugs, we see clearly, too, for how long value for money in the health sector has been evaded.”
It is estimated that over the past seven years, more than US$200 million was spent on drug purchases, with the lion’s share going to New GPC.
Greenidge had said that the control Jagdeo gave Ramroop over the Health Sector is not only unhealthy for the competitive market, but it also mars attempts at transparency and accountability.
The politician had reiterated that through the sole sourcing of drugs, “Jagdeo and his government did not only ruthlessly rob the nation, but invited his best friend to help to further corrupt the system and to rob the poor people at the same time.”
The pre-qualification criteria which were used to allow New GPC to be chosen, had also been described by the government as being “unreasonable” and tailor-made to have that company secure the status.
The previous list of companies that were pre-qualified to supply drugs expired since December, last. Prior to inviting submissions for another round of pre-qualification, the PPP/C revised the criteria. This led to the accusations that it was positioning New GPC to be the only company meeting the requirements to win out.
Under the revised criteria, bidders had to demonstrate a gross annual turnover of US$5 million and net assets of US$2.5 million.
Another criterion was that maximum score was to be awarded to applicants who would have paid $50M in Corporate taxes, annually. Additionally, the company that has 50 or more employees, and warehousing capacity of 30,000 square feet in the city, will also gain an edge.
New GPC has been a feature in the Auditor General’s report over the years with several instances focused on multi-million-dollar deficiencies in the procurement and supply of drugs under the previous administration.
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