-Auditor General’s report
For the second year running, the Office of the Auditor General has commented on 550 metres of sea defence work between Profit and Abary, West Coast Berbice which is now more than a year past its originally scheduled date of completion.
The 2011 report on the Public Accounts for Guyana which was recently laid in Parliament noted that the contract for $268M was still incomplete and the value of work completed was $159.8M. This assessment was made during a visit to Profit and Abary on July 12, 2012. The report said it therefore “appears that the contractor had not exercised sufficient diligence in the execution of the works”. The report said that the completion date was also extended by over one year to October 31, 2012.
The Auditor General’s report said the Ministry of Public Works in its response had explained that the contractors were “given a period” to complete the work following a joint inspection by the Auditor General’s Office and the Work Services Group of the Ministry of Public Works. No work was done between December 15, 2011 and January 31, 2012 because of heavy rainfall during that period but that “some amount of work was completed by the contractor which was evaluated”. The Ministry further said that liquidated damages would be applied on the contract and that no further payment was made to the contractor other than what was stated in the audit report.
In its 2010 report, the Office of the Auditor General had found that the ministry had made payments totalling $156.5 million to the contractor for the work but that only $20.6 million worth of work had been done.
This state of affairs prompted the 2010 Auditor General’s Report to recommend that the Head of Budget Agency conduct critical reviews of the ministry’s work supervision processes to ascertain “why progress payments of such magnitude could be made for so meagre works-in-progress”.
It appears that following the commentary in the 2010 Auditor General’s report, no further payments were made on top of the $156.5M. This figure is around the same as the value which the Auditor General’s office assigned for the works done up to July 12, 2012 – $159.8M.
Application of liquidated damages and the acquisition of performance/insurance bonds have been long-running issues for the government in relation to major contracts. There have been many projects where liquidated damages have not been applied or performance bonds collected on.
Sea defence work was prominently in the news in December last year after the European Union issued a statement calling for a speeding up of major sea defence works that it is financing here. It warned that unless this happened Guyana risks losing money.
