Head of the Privatization Unit Winston Brassington says ending the contract with Fip Motilall’s Synergy Holdings Inc over its failure to meet deadlines to complete the Amaila Hydro Project road had nothing to do with political expediency, while insisting that monies paid to the company are below the value of the work completed.
Brassington yesterday issued a press release condemning newspaper attacks that followed the termination of the contract with Synergy Holdings Inc last week.
“The government in this case accepted the lowest price and received value for money. It will now use other contractors to complete the job, in line with the main project,” Brassington said.
Regarding the evaluation and award of the tender, he added that this was done through normal procedures within government.
“As would be expected, given the size of the contract, this award received the no-objection of Cabinet, following which the contract was executed by the Government of Guyana, NICIL, and Synergy Holdings Inc,” he said. “It has been well established that the tender sum from Synergy Holdings was the lowest of the four tenders received, with the price ranging from US$15.4 million to US$26 million. Within the evaluation criteria for this project, price was weighted the highest,” he said.
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. Recently, the opposition political parties told this newspaper that the entire Amaila Falls project was likely to be scrutinized before the opposition-controlled National Assembly, which was convened last week. APNU’s Chairman Dr Rupert Roopnaraine said the parties, using the appropriate parliamentary organ, would be demanding proper due diligence of the project, and with specific reference to the road, he noted that APNU will be calling for it to be audited and re-assessed.
Brassington, however, yesterday insisted that the Synergy contract contained usual checks and balances, including mobilization bond and performance bond, valuations completed by an independent supervision firm, payments to the contractor being based on valuations less applicable deductions for retention and allocation of the mobilization payment, approval by the supervision firm of all payments, change orders, variations, contract changes, and design changes.
He said that SRKN was selected as the supervision firm and additionally, the Ministry of Public Works managed the contract.
“It should be noted that the contract was a design-build contract. With all design-build contracts, although initial specifications are stated, the detailed design and related studies required completion,” Brassington said. Given the nature of the terrain over which the road was being built, he added, design considerations could not be understated.
‘Inadequate’
“It has been a public record via statements from officials of the Ministry of Public Works, of progress and changes to the design, change orders, variations, etc. At the same time, it has also been a public record where government has expressed concern on inadequate progress by the contractor,” he said.
He said given the international nature of this project, the completion of additional environmental work was necessitated to ensure full compliance with international financial institutions’ environmental requirements. “This consideration alone, contributed to delaying Construction Notice to Proceed to January 2011 for Sections 6 & 7,” he said.
Brassington noted that price was one important consideration in Synergy’s winning the contract. Synergy had the lowest bid and price had the highest weighting in the evaluation of the bid. He said government at this point of termination has not paid more than the value of the works completed, as determined by the supervision firm. “As such, government has received value for money based on the work completed. Checks that helped to safeguard this include government retention of 10% of all valuations,” Brassington said.
“Additionally, it would be noted, that the Agreement for Completion to the contract with Synergy, executed in December, 2011 provided certain additional safeguards, including assigning the rights to the equipment to Government,” he said in the press release said.
Further, Brassington insisted that the timing of termination was due also to the overall timetable for the hydro project.
“Given that time is now of the essence, in that the main project should be ready to start towards the end of the second quarter of this year, government considered Synergy’s breach of the recent amendment (by not providing a new Performance Bond) and the time that one or more third parties would take to complete the project, and opted to terminate. Termination at this time, with the safeguards secured from the contractor (including assignment of all site equipment and rights to litigate) ensure that both value for money and the ability to achieve a timely completion with a third party are achieved,” Brassington said.
He added that government has generally treated with contracts based on the rights and obligations of the parties. “It cannot guarantee the outcome but it ensures that adequate safeguards are in place. When contracts are breached, termination clauses are invoked and/or legal action taken,” he said.
