US$5.7M settlement with BK… Govt. settled because of fear of losing appeal – Bulkan

Aug 10, 2016 News

---

Sparks flew in the National Assembly on Monday, as former Attorney General Anil Nandlall took his successor Basil Williams to task for the recent settlement that government made with the joint venture group – BK International and Puran Brothers Disposal. This was in relation to the group’s management of the Haags Bosch Landfill site.
The out-of-court settlement was made by government with BK International. BK’s contract to manage the dumpsite was terminated last year, resulting in the contractor’s move to the court. A total of $1.1B will be paid in three parts.
Government on Monday sought supplementary money from the National Assembly for the second tranche of payment for BK which will cost some $501M.
Nandlall, who was the Attorney General at the time the contract was cancelled, questioned Government’s decision to “just give up” and in the process agree to a billion-dollar payout.
He pointed out that after filing an appeal, the government then agreed to “compensate” BK with some $1.1B (US$5.7M) from the state’s coffers, without even waiting for the verdict of the appeal. In view of this, he also queried whether Williams was the defender of the state or the defender of Brian Tiwarie, owner of BK International.
“The Attorney General had filed an appeal against the judgment of (former Chief Justice) Ian Chang, in which Chang quashed the termination notice of the contract. Why did they proceed to settle the matter without a hearing and determination of their own appeal?”
An unrelenting Nandlall also queried whether the coalition was satisfied with the work which BK International did on the dump site. With the problems occasioned by the contractor’s handling of the landfill, he enquired whether it might very well not have merited a lawsuit rather than a payout.
However, Williams defended himself against the onslaught, pointing to “the mess” left by the PPP. He stated that because of the coalition’s experience with the Rudisa Beverage Company, a decision was taken to settle with BK.
Rudisa had taken Guyana to court over an environmental tax the country had been charging for importing beverages. The Caribbean Court of Justice (CCJ) had awarded damages totaling US$6.2M to Rudisa.
Minister of Communities, Ronald Bulkan also rose to defend the decision to settle. Describing it as a fresh approach to allow for better waste management initiatives, Bulkan stated that ending the contract and having a responsible operator for the site were the main considerations in settling.
“It was felt that had we gone the latter (to hear the appeal), the sum to be paid would have been greater. Secondly, it was to free the site of the encumbrance that was there, which is the contract that was in place.”
“But was the Government satisfied with the work done by BK, so that you were prepared to pay $1.7B in compensation?” Nandlall enquired.
In response, Bulkan noted that the decision to settle also follows a series of other instances, whereby the government inherited situations where it had to pay. He referenced Demerara Distillers Limited (DDL) and Rudisa.
Haags Bosch was opened in early 2011, replacing the dumpsite at Le Repentir Cemetery in the city, which had to be closed because of health and capacity reasons. Under the arrangements, BK was supposed to be paid for every ton of waste processed.
The matter came to a head when the former administration, on February 27, 2015, terminated BK’s contract for the construction and operations of the landfill. The government said that the company missed deadlines and committed other breaches.
On March 13, 2015, BK, through its lawyer, Davindra Kissoon, filed a lawsuit asking Chief Justice (Ag) Ian Chang, to overturn the decision of the Ministry of Local Government and Regional Development to terminate the contract.
Tiwarie, in court documents, claimed that he was owed hundreds of millions of dollars for the construction and for the daily management of the Eccles site.
Tiwarie said that in 2012, the supervision of the landfill operations was placed under the Ministry of Public Works, with engineer Walter Willis appointed Project Manager.
However, BK and Willis clashed, and Willis was removed from the project shortly after.
Tiwarie in his court documents said that his company constructed cells, roadways, administrative offices, canteen, workshop and a scale. In the process he hired 50 persons and managed to process 140,000 tonnes of waste annually.
However, the Ministry started delaying payments to BK, despite invoices being submitted and letters of demand being written.
As of July 23, 2013, the Ministry reportedly owed BK some US$324,677, the monies being for work done since 2012. This meant there were no payments for one and half years. Aside from this, BK had filed claims against the Ministry for breaches in the contract for US$8M.
Puran Brothers Disposal will continue the management of the disposal site.

---

---