AFC says deeply concerned over mismanagement of public funds on road contract

Aug 08, 2024 News

Kaieteur News – The Alliance For Change (AFC) said it is deeply concerned about the recent revelations regarding the significant advance payment made to the Trinidadian contractor Kalco for the Conversation Tree Road Project, which remains incomplete.

Minister of Public Works, Juan Edghill, disclosed that over GYD$400 million was paid in advance to Kalco, who failed to deliver the project, leaving the Government and taxpayers with significant losses, the party said in a statement Wednesday.

During a parliamentary session, AFC Member of Parliament (MP) David Patterson inquired about the total expenditure on the project, the sum advanced to Kalco, and whether any liquidated damages were enforced. Minister Edghill revealed that Kalco was awarded the contract for $830,293,458 GYD in September 2022 and subsequently received $465,223,474 GYD, or 56% of the contract sum, as an advanced payment.

In a concerning turn of events, Minister Edghill also admitted, the AFC said that no liquidated damages or penalties were applied. Instead, the government reached an “amicable settlement” with Kalco. This settlement purportedly included the seizure of $153,600,000 GYD worth of equipment to offset the outstanding advance payment, but no tangible proof of this equipment seizure was provided.

“Even more alarming is the fact that a new contract was awarded to S. Jagmohan Construction and General Supplies Inc. through sole sourcing, amounting to $844,027,988 GYD—$13 million more than the original contract. This raises serious questions about the government’s procurement practices and their commitment to fiscal responsibility,” the AFC said.

Commenting on the situation, Patterson himself a former minister of works highlighted that the government effectively allowed Kalco to walk away with at least $311,623,474 GYD. “The absence of transparency and accountability in this process is indicative of a broader pattern of mismanagement of public funds by the PPP/C government.”

He said the incident is not an isolated one. “There have been multiple instances under the PPP/C administration where contractors have been advanced substantial sums without adequate oversight or recourse. These recurring issues reflect a significant deficiency in the stewardship of the people’s money by the current government. The AFC calls for a thorough investigation into this matter and demands that the government adopt stringent measures to ensure accountability and transparency in all future contracts. It is imperative that the citizens of Guyana have confidence that their vital monetary pool, which in many instances they will have to repay to lending agencies for generations, is being managed prudently and that those responsible for fiscal mismanagement are held accountable,” Patterson said.

• Contract, incomplete, mismanagement, public, Road