Minister of Health Dr Bheri Ramsaran yesterday evaded questions about whether procurement rules had been broken when Surendra Engineer-ing’s bid to build a specialty hospital was accepted despite the fact that security was to be provided by a foreign bank.
Competitor for the contract Fedders-Lloyd Corpora-tion has indicated that it plans to protest the contract award since Surendra did not meet the specified criteria to participate in the bidding process.
Health Ministry Perma-nent Secretary Leslie Cadogan said yesterday, however, that Fedders-Lloyd had failed an aspect of the bid‘s evaluation process but declined to divulge any details.
At a press conference yesterday at the Health Ministry’s Brickdam office boardroom to “set the record straight” in relation to media reports on the awarding of the specialty hospital contract, the minister said that there were inaccuracies in the newspaper articles. The minister was accompanied to the briefing by Permanent Secretary Leslie Cadogan, who is also the Chairman of the evaluative committee for this contract; civil engineer Naresh Mangar; and administrative assistant Ryan Baiche.
The health minister said that he wanted to deal head on with the issue as the country’s reputation was at stake. “At the same time, we do not want the image of the country that is being touted by a certain company, trying to scare us – ‘you guys are bad and you are doing a bad thing for Guyana’ – and then all these things about things being done incorrectly and corruptly and so on,” he said.
Yesterday’s edition of Stabroek News had reported Vice President of the Fedders-Lloyd, Naresh Chandra Soral, as saying that after an extensive review of the procurement and award process, his company planned to file an official protest against the award to India’s Export Import (EXIM) Bank and the National Procurement and Tender Administration Board (NPTAB) here. EXIM bank of India is the bank responsible for the line of credit under the Indian government to build the specialty hospital. They have the power to undertake their own evaluations and advise government on how they want to proceed.
The US$18,180,000 ($3,689,616,400) contract to design, build and equip the specialty hospital was awarded to Surendra Engineering, which is the firm that was responsible for the Enmore sugar packaging facility.
Of the companies that bid for the contract, Fedders Lloyd had submitted the lowest one at US$17,679,000 (or $3.4 billion) and a bid bond of US$500,000, which was obtained from the Scotia bank. The other bidders were the contractor that built the national stadium, Shapoorji Pallonji (US$42,473,600 or $8.4 billion), Jaguar Overseas Limited (US$15,658,000 or $3.05 billion) and the Vydehi Institute of Medical Sciences and Research of India (US$19.5 million).
Fedders Lloyd said that they also took issue with the fact that Surendra Engineer-ing did not have the bid bond security from a local bank, which was one of the requirements. “Guyana is sending a very bad image of their procurement process to India and the world-at-large because many investors want to come here, but if this is how the way things are done they will not,” their vice president said.
In response to this Cadogan said that it was Fedders Lloyd which misunderstood the requirements as the bid bond was supposed to be from an Indian and not a local bank. Section 13.2 of NPTAB’s rules and instructions to bidders, however, would not seem to confirm this.
“The bid document specifically said a bank from India and not a local bank…At the pre-bid meeting which was held on the 23rd April 2012, when that question was raised it was specifically stated that the bid security must be from a bank in India,“ Cadogan said.
However, Section 13.2 reads: “The bid security shall at the Bidder’s option, be in the form of either a letter of credit or a bank guarantee from a reputable banking institution, or a bond issued by a surety selected by the Bidder and located in any country. If the institution issuing the bond is located outside the Employer’s country, it shall have a correspondent financial institution located in the Employer’s country to make it enforceable.”
Cadogan informed the media present that no local companies could bid on the contract as part of the line of credit agreement, only India registered countries were allowed to bid. A total of 34 registered companies were sent invitations to tender, and 15 were shortlisted. Six from among these purchased the tender documents, but only five submitted bids, and according to minutes of the tender opening only one did not meet the requirements.
When asked if NPTAB’s instructions and the oral okay given to bidders to use bond security from India only was in breach of the country’s procurement rules, both the PS and the minister declined to respond. Cadogan would only say, “I am not going to go into such a detail at this stage,” and kept repeating that the tender document specifically states that it should be from an Indian bank.
Fedders Lloyd’s security was provided by the Bank of Nova Scotia Guyana, and the vice-president of the company had explained that it also has branches in India. However, yesterday Cadogan said he was not aware that there were Scotia Bank branches in India. “As far as I know, the Bank of Nova Scotia – that bank… is a Canadian bank with a local branch. I don’t know anything about Scotia Bank being in India,” he said.
Questions had been earlier raised by the public about how a sugar factory spare parts dealer was awarded a billion dollar contract to build a hospital over a company, Nous Hospital Consultants, which specializes in hospital and health care projects. There were also concerns that Surendra Engineering had been favoured over other bidders. Cadogan said that prior to newspaper reports on the award of the contract, he had not been formally informed that the contract had been approved by cabinet; in addition he did not know about Surendra Engineering, and that no one ever influenced his evaluation. “There was no concoction whatsoever. Nobody contacted me. None of the contractors contacted me. I don’t even know them. I heard afterwards from the newspapers about Surendra and GuySuCo and all these things.
“I never know about that and nothing like that was ever taken into consideration during our evaluation… No member of the public or any government official ever contacted me on that because let me tell you, frankly, I am going to say no to whosoever contacted; if you know the type of person I am, I would have said no,” he said.
The press conference was not without its contretemps, when towards the end there was a heated exchange between Kaieteur News reporter Neil Marks and Minister Ramsaran over the fact his questions were not answered, and the reporter was eventually asked to leave.
