Region One (Barima/Waini) has been called to account by the Office of the Auditor General for several contracts where overpayments ran into millions and contractors absconded after doing very little or poor work.
The 2011 report on the Public Accounts of Guyana cited several projects including one for the empoldering of 250 acres of farmlands at Waini where the contractor was given an advance payment of $2.7M but no work was ever done.
Region One has been controlled by the PPP/C since 1992 and observers say this state of affairs reflects the unaccountability that has been allowed to prevail and the assigning of contracts to persons not qualified to undertake the task.
The findings of the 2011 Auditor General’s report will be perused by the Public Accounts Committee (PAC) of Parliament but it may take some time as the PAC is still dissecting the 2010 report. In several cases the Auditor General’s report recommended that the Region One administration conduct further investigations.
According to the 2011 report, the contract for the Waini, northwest empoldering was awarded to a sole bidder for $7.87M. As at December 31 last year $2.7M was paid to the contractor.
However, the report said “A physical verification of the works revealed that no work was done; hence the advance payment would be deemed an overpayment. The Community Development Council (CDC) Chairman advised that the contractor never mobilized any personnel or equipment to the site”. Further, the contracted completion date for the works expired since October 19, 2011 and no approval of an extension of time was evident. The audit report pointed out that the maximum allowable limit of liquidated damages under the contract is 10%. Therefore, based on the contracted completion date of October 19, 2011, liquidated damages totalling $787,000 would have accrued since January 27, 2012. However, in spite of this no action was taken against the contractor.
Moreover, the contractor received an advance payment of $2.7M which was 35% of the contract sum whereas the contract stipulated that the advance payment should be 10%.
When confronted with these facts, the Region One administration said that it had “written to the contractor to recover the amount overpaid and measures will be taken to address the poor documentation as it relates to the contract document”.
The Audit Office’s recommendation was that the regional administration take “urgent action to recover the overpayment, submit evidence to the Audit Office for scrutiny and adhere strictly to the terms and conditions of the Procurement Act of 2004”. It is unclear why prior to the Audit Office’s intervention, the Region had not gone further to retrieve the sum.
Kariabo
Then there was the case of the health hut at Kariabo where the contractor was overpaid and subsequently went out of business after doing poor work.
A contract of $6.75M was awarded to the higher of two bidders on the ground that the other was a new contractor. The full contract sum was paid but the audit office found that overpayments totalling $418,700 had been made. The contractor also received an advance payment of $2M but no advance payment bond was seen. Further, the actual completion date of the works could not be established from the documents submitted and no completion certificate was seen.
“The overall finished quality of the works is very poor; timber members to the walls were not sand smooth finished, as was specified in the contract, while all the other timber members had a rough finish. Timber joints were poorly prepared and the puttying works are very untidy. No Yale locks were installed to the doors and no handles were installed to the cupboards”, the audit office report said.
The region’s response was that it had “written to the contractor to recover the amount overpaid, however, the registered mail was returned, and it would appear that the contractor was no longer in business. As such, the region will be pursuing legal action to recover the amount overpaid”.
The audit office recommended that urgent action be taken to recover the overpayment and that evidence be submitted to the audit office for scrutiny.
Mabaruma
Rehabilitation of the Mabaruma Regional Office also encountered problems. There was an overpayment of $1M on the $5.2M for a contract worth $11.8M. When the audit office visited, it found that the contractor had no personnel or equipment on site. “Only the foundation and ground floor columns of the building were completed at the time of verification and the works appear to have been abandoned for a long time”.
Given the contractual completion date, the report said that liquidated damages to the tune of $1.1M would have accumulated but in spite of this no action was taken against the contractor. So while the contractor received a total sum of $5.2M, the value of the works completed was $1.3M and the work not completed was valued at $1.79M.
The region’s response was that it had written to the contractor to recover the amount overpaid but that “the registered mail was returned, and it would appear that the contractor was no longer in business. As such, the region will be pursuing legal action to recover the amount overpaid”.
The student’s dormitory at Port Kaituma was also focused on. The sum disbursed on the project was $5.4M on a contract awarded by the National Procurement and Tender Administration Board (NPTAB) to the value of $18.1M. Physical verification of the work proved that only $633,300 worth of work was done meaning that there was an overpayment of $4.79M. Further, the audit office said that the contractor had no personnel or equipment on site and that the works appeared to have been abandoned. Only the foundation trenching for the building was excavated at the time of the verification. The start date for the contract should have been June 17, 2011 with a five-month construction period. However, approximately one year after the signing of the contract works were incomplete.
The regional administration advised that the contract had been terminated and that the contractor was written to for the amount overpaid.
Oronoque
An amount of $14.695M was disbursed on the construction of a bridge ad revetment from Oronoque to Port Kaituma Water Front. This contract was awarded by the NPTAB to the tune of $18.9M. However, physical verification of the project showed that overpayments totaled $8.3M. Further, $1.8M of liquidated damages was applicable but no action had been taken against the contractor. The regional administration said that works are ongoing and “measures will be taken to address the poor documentation as it relates to the contract document”.
A contract for a gravel surface road at 11 Miles Manawarin, Moruca was awarded by the NPTAB to the value of $9.3M and an advance payment of $3.745M was made by the region. However, physical verification by the audit office showed that overpayments of $2.68M were made and that the works appeared t o have been abandoned by the contractor. Further, the road was to be constructed through forested area where no infrastructural work had ever been carried out before yet the contract included $100,000 for the protection of underground services including “existing water mains, culverts etc”. The audit office said that the $100,000 should be considered an overpayment and retrieved. The region promised to investigate.
Another contract for a gravel road from Kamwatta Junction to Parakese also included $50,000 for the protection of underground services even though these had never existed in the area.
One major prior year (2010) matter that was referred to was the overpayment of $20.3M to contractors for the years 2009 and 2010 and which sum is still to be recovered. The region’s response was that it had “written to the contractors to recover the amounts overpaid. However, there has been no response to date, as such; the Region will be pursuing legal action against the contractors”. Again, it is unclear why the region had not taken such action earlier.
During 2010, the audit office noted that the regional administration made purchases totalling $39M but that only $18.5M was verified as having been received by the administration. The audit office recommended that the region investigate the status of these items and submit a report to it.
Refrigerators
At the Mabaruma Power Station and Stores, the audit office found the following shortages: 2,125 gallons of dieseline, 141 gallons of gasoline, five double mattresses, four double bed frames and three refrigerators. The audit office recommended that the region urgently investigate this and forward a copy of its report.