The government has terminated the Amaila Falls Access road contract with the Fip Motilall-run Synergy Holdings Inc, citing the contractor’s failure to meet deadlines and the Works Ministry is taking steps to complete the project.
The US$15.4 million contract had been at the centre of criticism from the inception, with questions being raised about the company’s ability to construct roads and to complete large projects. Motilall’s company was awarded the contract after undergoing a tendering process, the government noted, back in 2007.
Reading from a prepared statement yesterday, Transport Minister Robeson Benn, at a brief, hastily-called press conference at his Wight’s Lane, Kingston office, told the media that the decision to terminate the contract was made in accordance with the terms of the agreement for completion executed on December 21, 2011.
The agreement, included among other things, the provision of a valid performance bond to the government from “an acceptable institution to the value of 10% of the contract price on of before January 10, 2012 for the period of the execution of the remaining works and for the defects liability period”.
According to Benn, as of December last, Synergy Holdings had completed only 40% of the works, “despite repeated urgings and interventions from the project engineer and the consulting firm to have the project completed.” Benn said the termination will result in the application of liquidated damages at the rate of US$10,000 per day from January 1 to the date of termination as well as the seizure of the contractor’s existing performance bond and the firm’s retention sum. It will also result in the seizure and possession of all pieces of equipment and all other property used by the contractor for the project.
Benn said he could not provide figures off hand on how much money had been spent on the project to date, as the figures were still being put together. He said the project will continue and engineers attached to the ministry are currently examining it. The government is expected to pronounce on developments relating to its undertaking in the coming weeks.
Asked whether the contract’s termination was related to firm action being taken by the authorities on projects, Benn said government has always taken a firm stand where the undertaking of projects is concerned.
Recently, the opposition political parties told this newspaper that the entire Amaila Falls project was likely to be scrutinized before the National Assembly. APNU’s Chairman Dr Rupert Roopnaraine said that the opposition parties would be reviewing this project in its totality. According to him, the parties, using the appropriate parliamentary organ, would be demanding proper due diligence of the project. Parliament convened yesterday afternoon.
Regarding the access road project, Roopnaraine said that APNU will be calling for it to be audited and re-assessed. “Any decision on its future will be determined by the quantitative and qualitative findings of the audit,” he continued.
Speaking on behalf of the AFC, party chairman Khemraj Ramjattan had fully endorsed the government pursuing green energy but sounded his concern about the rising cost associated with the project. “Since the government has signed on we would like to scrutinize this Amaila Falls deal with the company Sithe Global [the developer of the project] being asked to come in to an Economic Sector Services Committee meeting in Parliament and to be scrutinized thoroughly, especially [with respect to] this very important point – from $400 million to $600 million to $835 million being the cost,” Ramjattan said. “We really want to know why these costs have jumped so high,” he added.
Cabinet Secretary Dr Roger Luncheon recently announced that the completion date of the road has been further pushed back to March/April of this year.
The project was originally slated to be completed by September last year but was subsequently pushed back to December. It was reported that Motilall, the consultants and the Government of Guyana had agreed that sections of the road will have to be sub-contracted out to other companies to speed up the works.
In December last the company via an advertisement in the Guyana Chronicle said that it was seeking truckers to work on a contract basis in hauling laterite to the project area in the Mazaruni area.
This newspaper reported recently that a review of the Amaila Falls access road conducted by external consultants in June last year, highlighted the poorly outlined specifications in the original project document and recommended immediate changes to the design including widening the road and reducing its steepness.
According to documents seen by this newspaper, Sithe Global, the developer of the project, contracted BBFL Caribbean Ltd in collaboration with Earth Investigation Systems Ltd to undertake a review of the proposed road to see whether the road, as designed and specified, would be able to function for its intended use. The review was conducted by the consultants in June and a final report was released the following month.
Reliable sources provided evidence to this newspaper which suggested that the report came months after representatives from the proposed hydropower contractor China Railway visited here in March/April and expressed concern about the road being unable to satisfy their demands. This prompted an entire review of the road by the various entities involved in the multi-million dollar project.
The government later sought to explain modifications to the project, noting that the additional sums to be spent on the project will help to reduce its overall cost.
The contract awarded to Synergy was for “the upgrading of approximately 85 km of existing roadway, the design and construction of approximately 110 km of virgin roadway, the design and construction of two new pontoon crossings at the Essequibo and Kuribrong rivers.” The fourth part of the project was for the clearing of a pathway alongside the roadway to allow for the installation of approximately 65 km of transmission lines.
The Government of Guyana is funding the construction of the Amaila Access road, as part of its equity contribution to the entire Amaila Falls Hydroelectric Project.
