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Jun 06, 2021 News
Kaieteur News – The Special Organised Crime Unit (SOCU) has been called in to investigate suspected financial irregularities at the Guyana Water Incorporated (GWI) and among them is a US$9M contract for a water treatment chemical called SeaQuest.
These financial irregularities allegedly took place while the coalition government was in power, under ex-boss, Dr. Richard Van West-Charles.
Informing media operatives of the development is the current Managing Director (MD), Shaik Baksh, who also detailed that a forensic audit of the company is currently ongoing. During a GWI press conference held on Friday, he pointed out that there was a questionable water chemical contract which cost Guyana some G$1.8B over a four-year period, or almost US$9M.
According to Baksh, the money was used to sole-source the water purification product, SeaQuest, through a middleman, from the manufacturer, an American company called Aqua Smart Inc.; the product is a trademarked combination of chemicals used to reduce or separate the iron content from the water as part of the purification process.
“They have a middle company doing the procurement and then mixing, batching the product and transporting it to all Regions. So a middle man was there sourcing (the product) from Aqua Smart and this was sole sourcing,” the GWI boss told reporters.
Baksh said that by doing this, the then management of GWI breached all the tender processes, both at GWI and the National Procurement and Tender Administration Board (NPTAB).
Moreover, related Baksh, the GWI Board of Directors did not approve for the company to sole-source the chemical but the then management went ahead and did so.
“I just want to quote what the Board said, ‘the board agreed that there was not sufficient grounds to waiver public procurement and did not approve the request for sole-sourcing’,” said Baksh.
He added that the move to disregard the board’s non-approval for sole-sourcing the SeaQuest is “totally unacceptable and certain steps (to investigate) have been taken.”
Baksh pointed out too that an internal auditor has found that the middle company that was used to source the SeaQuest had been “double-charging” in the batching, mixing and transportation of the chemical.
“Huge sums of monies were involved there,” he related.
Apart from the controversial water chemical contract, Baksh noted too that there are other financial irregularities that have popped up under the previous management. He revealed that the current management was forced to send home a clerk after it was found that the individual had signed off transportation invoices with “fictitious charges.” He added that the former management was in approval of the fictitious charges too.
Another finding, according to Baksh, was the questionable delivery of goods to the various Regions. He explained one instance where the clerk was signing on behalf of the regional authorities for the delivery of goods, but the internal auditor could not find any evidence that they were delivered. Baksh continued that despite no evidence of delivery being produced, “claims were made and invoices were done for payments to be made.”
The GWI boss further revealed that it was discovered that the then management were involved in contracts splitting which is prohibited under the National Procurement Act and GWI’s tender rules. Contract splitting is the practice of artificially breaking up the purchases of goods and services to bring total expenditure below organisational and legislative thresholds in order to avoid formal procurement rules. Baksh also made mention of an irregularity where a contractor was overpaid some $89.9M for a Vlissengen Road pipe project. He explained that the cost of the project was some $123M but the then management paid the contractor $114M which is 93% of the total cost of the contract. Despite being paid the cash, Baksh said that only 11.2% of the pipe line was completed and the “performance bond has expired.”
As result, related the MD, a manager was dismissed and GWI had no alternative but to take the contractor to court. The matter is still ongoing. These revelations came to light after GWI made a decision to retrench some 157 workers after the current management reasoned that the company is unable to sustain all of them. A total of 76 employees have already received their dismissal letters.
It was reported that the coalition had doubled up GWI’s staff from 600 employees to over 1,300. Van West-Charles, during a recent press conference along with former Minister of Housing and Water, Annette Ferguson, had called on GWI to reconsider its decision in sending home the workers. He claimed that the decision to employ more staff was to reduce outsourcing by doing the projects with in-house staff. This plan, he contended would save the company from spending large sums of money on contractors. However, according to Baksh, during five years under Van West-Charles’ tenure the company made no money and was on the verge of total collapse before August, 2020.
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