Jan 01, 2021 News
Kaieteur News – The state-owned asphalt plant located at Garden of Eden reportedly paid a Trinidad-based company $9 million for the supply of cold mix asphalt in 2016, roughly a year before the company was legally registered. Same was revealed during an audit of the asphalt Plant after allegations of a racket involving the purchase of asphalt at the state-run entity controlled by the Demerara Harbour Bridge (DHB).
The cold mix asphalt refers to the asphalt mixture blended by unheated aggregate, mineral filler and dilute asphalt. The cold asphalt mixture is a high-tech road repair material, suitable for repairing different types of road surfaces under any environment, such as asphalt concrete road, parking lot, airport runway and bridges expansion joint.
The report outlined that the cold mix was purchased from a company in Trinidad and Tobago that was registered in Trinidad and Tobago in April 2016, the same year when the cold mix was purchased.
“We noted at the time of purchase, the supplier of the cold mix was not a known seller of the product. Our analysis of the general ledger revealed that the company was paid the sum of $9,814,600 on the 17th November, 2015, the year before it was incorporated,” the reported stated.
“Management advanced the Plant’s fund to a company that was legally non-existent and as such, exposed the Plant to the risk of non-recourse in the event of non-delivery,” it added.
Several discrepancies were also discovered relating to the purchase of the cold mix. The report stated that there was no approval given by the Board to authorize the purchase. There was also no feasibility study conducted to determine whether it was beneficial to procure and sell cold mix. In fact, the report pointed out that from analysis, the cost of procuring cold mix is “approximately eleven (11) times that of Asphalt.”
The audit revealed that management did not abide by the policy of the plant as decisions of this nature should have been approved by the Board. In the event that a Board was not in place, approval would have had to be given by the subject Minister at that time.
The investigating team also reported that they were unable to determine the rationale behind acquiring cold mix from a new company rather than an established supplier.
In response to the finding, the DHB management explained that the decision of entering the sale of cold mix was done after consultation and deliberation with Public Infrastructure Ministry management.
It stated that the usage of cold mix was not to replace asphalt but as an option for the early intervention of Ministry road maintenance (all weather) and far outlying areas.
Management was also said to have submitted a news article purportedly containing details of a feasibility study being conducted but according to the team, “no documentation was found in that regard.”
“Please see Stabroek News article dated 28th November, 2015 with respect to feasibility on cold mix. Also please see attachment, pictures of the cold mix seminar dated 25th November, 2015 at the Pegasus Hotel showing a Ministry of Public Infrastructure minister, a Demerara Harbour Bridge Corporation Vice Chairman and Ministry of Public Infrastructure senior personnel in attendance, among others,” the DHB management stated.
The team pointed out too that, there was merely a seminar to disseminate information on cold mix and as such, it could not be considered a “feasibility study”.
Further on, the DHB management noted too that it was unaware of the incorporation details of the company but this did not lead to a loss of revenue.
“Please note that CJIA, Sol Guyana Inc., Ministry of Public Works (hinterland Airport – Mr. Mangra) continues to be our customer,” it said.
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