BK International Incorpo-rated yesterday said it is moving to the courts in India in an effort to recover $400M from Surendra Engineering Corporation Limited, the Indian company contracted to build the US$18M Specialty Hospital at Turkeyen.
In a statement, BK said that that the move to the courts in India comes after the Commercial Court here discharged an interim injunction restraining Brijen Parikh, Managing Director of Surendra Engineering Corporation Limited, from leaving Guyana without settling the claimed debt to BK International. The statement said that prior to the decision to take legal action in India, BK International had sought the intervention of the Indian High Commissioner to Guyana on the matter but saw no progress.
BK International, a sub-contractor on the India-funded project, said it is owed $180,100,242 for work done at the Turkeyen site in May, June and July, 2014. Three invoices dated May 12, June 4, and July 1 were dispatched to Parikh, BK said, and certified by the engineer on site. However, BK said that Parikh indicated that BK International Inc. could not be paid as a result of the opposition’s disapproval of the 2014 budget allocation to the project. The opposition has withheld budgetary and other support for the project as a result of various concerns.
BK further said that it and Surendra entered into a written agreement for BK International to supply and drive 2,000 pieces of 65 feet long greenheart piles at the Turkeyen site. It said that the agreed sum for the execution of the contract by BK was $673, 978,328. BK said that Surendra agreed to pay BK International for quantities of work done and certified by the engineer on site. Payment was to be made within two weeks after submission of the invoices by BK International but this was not done.
As a result, on July 21, 2014 BK said it filed for and received an interim injunction against Surendra. The injunction granted by Justice Rishi Persaud in the Commercial Court followed an Ex-parte Application by way of Affidavit by BK International Inc. BK said that the interim injunction restrained the defendant, Surendra’s Parikh, from leaving or attempting to leave the jurisdiction pending the hearing and determination of the action unless and until the defendant lodged with the Registrar of the Supreme Court the sum of $180,100,242 as security
BK further said that on July 23, 2014, Justice Persaud ruled that BK recover the sum of $180,100,242 together with costs in the sum of $450,000 after Surendra consented to judgment. The BK statement said that Justice Persaud also ordered that there be a stay of execution for a period of two months and discharged the interim injunction granted by the said court on July 22, 2014. As a result of the order by Justice Persaud, BK said that Parikh has left the jurisdiction without paying it.
BK said it is exposed for over $400M on the Specialty Hospital as a result of work for Surendra.
The specialty hospital has been a contentious project since the controversial award of the contract to Surendra Engineering in 2012.
During the consideration of the 2013 budget estimates, a proposed $1.25 billion allocation for the hospital was cut by the opposition. Main opposition APNU had pointed to the government’s lack of dialogue on the opposition’s concern that the formulation of the deal was not transparent, while the AFC pointed out that Surendra Engineering was responsible for defects at the Enmore Sugar Packaging Plant and also that it had never before built a hospital.
At one point, another Indian firm, Fedders Lloyd, had complained about the tendering process, saying that Surendra was awarded because of favouritism and its links to the current ruling administration. It had written to the Ministry of Health outlining its concerns.
However, at the December 12, 2013 sitting of the National Assembly, government managed to secure approval of $34.4M for the project owing to the absence of APNU member Volda Lawrence during the vote. This paved the way for foundation works for the hospital to commence in January this year, for which BK International was hired by Surendra Engineering.
Recently, AFC leader Khemraj Ramjattan had stated that the project was still in limbo as the Exim Bank of India has halted funding amid claims of corruption by one Indian parliamentarian and a company.
When it disapproved of the allocation for the hospital during consideration of this year’s budget estimates, the AFC said that “The Specialty Hospital has been touted to attract medical tourism and is being funded from a loan from the Exim Bank of India. Though funded by the State, Government had disclosed that the institution would be manned, mostly, by non-nationals and that its primary source for clientele would be foreigners seeking specialised medical treatment”.
“The Alliance For Change has long been concerned that funding for this ‘private’ hospital could be better spent on upgrading and expanding the services at all state hospitals”.
Earlier this year, when it had seemed that the works on the Specialty Hospital site had gone beyond the $34.4M voted last year, Stabroek News had asked the Head of the Presidential Secretariat Dr Roger Luncheon about this and he had said that the work was being done from “out of pocket monies” by the contractor.
“Everything they have to subscribe to with their own money… All of the people who are currently not being paid for works being done and continuing to work have a reasonable expectation to be paid and we will honour that obligation,” Luncheon said.
