Government is mulling what actions should be taken on other contracts here that Indian firm Surendra Engineering Company Limited (SECL) was awarded, in light of its decision to terminate the company’s contract for the US$18M specialty hospital for fraud.
The firm has collected a total of US$4,285,440 or almost 25% of the total worth of the hospital contract from government so far and while works have been done at the Turkeyen site, it is unclear how much this was valued.
“I am aware that there is another contract. That issue is a live one, currently being reviewed by the Ministry of Agriculture and the Office of the President… but it would be premature to say now what steps are going to be taken,” Attorney General Anil Nandlall told a press conference yesterday, while referring to the $820 million contract for the supply of 14 flood relief pumps.
Surendra has not responded to numerous queries from Stabroek News over the last two years for responses on a range of issues. It is unclear whether the company has a representative here.
On Tuesday, the Donald Ramotar administration announced that the contract for the controversial specialty hospital project would be terminated and that it would initiate legal action against SECL for fraud and to recover public funds.
The government revealed that since late June of this year it has been engaging the company on a number of issues relating to allegations of fraud and financial irregularities.
Milestones
“Initially, the Govern-ment’s concerns related to delayed milestones and inadequate accountability by SECL for public funds the company had received on signing the contract with the Ministry of Health,” it said in a statement. “Subsequently, the Government of Guyana discovered that SECL’s representative in Guyana had submitted a fraudulent document purporting to emanate from the Central Bank of Trinidad and Tobago,” it added, while noting that the Central Bank of Trinidad and Tobago had since confirmed the fraud.
The announcement of the termination of the contract was an embarrassing about-face for the government which had been accused of molly-cuddling Surendra and giving it preference despite it not having a good track record. Surendra first burst onto the scene here when it was given a huge contract under the Jagdeo administration for the Enmore sugar packaging plant. This plant later encountered difficulties with a boiler. This was followed by the $820M contract for the pumps which critics said should not have been given to it since there were better qualified companies who were actual producers of pumps whereas Surendra was simply sourcing them from suppliers. The contract for the pumps remains mired in confusion. Surendra was also mentioned as a possible manager of the troubled Skeldon sugar factory until objections were raised to this. Surendra was then controversially given the contract for the Specialty Hospital despite not ever having built such a facility and though it was competing against other bidders who had done such work.
Observers say the government may have also acted to terminate the hospital contract as one of the aggrieved bidders was actively pursuing the matter in New Delhi and that the Indian Parliament could have possibly taken action over the project.
Blacklisted
Yesterday Cabinet Secretary Dr. Roger Luncheon addressed the issue at his post-Cabinet press briefing, while the Health Ministry called a press conference to also discuss the events that led to the eventual contract termination.
Luncheon, when asked if Surendra would be blacklisted from future bidding here, said that tender documents require that companies tendering for a project to inform of past or present litigation for that purpose. “The only reason, I would think, is for that to allow blacklisting—because why would you want to know if legal action and criminal charges have been filed against a tenderer unless you intend to use that information? So, I would like to think it’s a black mark against you,” he said.
Nandlall was present at the Health Ministry briefing along with Health Minister Dr Bheri Ramsaran, Permanent Secretary Leslie Cadogan and engineer Walter Willis.
Nandlall said that it was his view that the procurement legislation needs to be reviewed to address the issue of blacklisting. “The procurement process is being reviewed. I am hoping that earlier than later we retain the services of an expert that would look at that issue as well as others,” he said.
He informed that red flags about SECL’s operations had been raised since last year and that it was through project supervisor VIKAB Engineering that scrutiny increased.
He explained that there had been complaints that SECL had submitted invoices for payments for works done by sub-contractors but it was found that those companies were not paid their respective dues. Some of those documents were also forged to show payment for works so as to collect monies.
Recently, local construction company BK International announced that it would seek to sue Surendra in Indian courts for some $180,100,242 for work done at the project site in May, June and July of this year.
After the expiration of an initial bond from Caricom Insurance and that company informed that it would not renew it, government requested that before any other funds were released that the security bond be satisfied by SECL.
According to Nandlall, SECL produced a bond by a Trinidadian company named Worldwide Banks, which was not recognised by the Trinidadian government.
It is alleged also that SECL then produced to government a bid bond purportedly given by the Central Bank of Trinidad and Tobago (CBTT) and this was proved to be a forgery. This bond had a notary seal and questions were raised as to this reason. Checks with CBTT found that the document was a forgery and that the person whose signature was affixed to the bond did not exist at the bank.
Credit was given by both the Attorney General and the Cabinet Secretary to VIKAB for its role in uncovering the fraud.
VIKAB Engineering has had its own woes as the firm was flayed by engineers for shoddy work on the Supenaam stelling. The company never faced any penalties by government yet continues to work in Guyana, although the Ministry of Public Works says it does not use the firm for works.
Luncheon lauded VIKAB’s due diligence on the specialty hospital contract, saying, “I want to convince you that VIKAB’s contributions, in unravelling the behaviour of Surendra, have been significant and enormous.”
During last year’s consideration of the budget estimates, a proposed $1.25B allocation for the hospital project was cut by the opposition over government’s unwillingness to address concerns that the formulation of the deal was not transparent, SECL’s poor record in the construction of the Enmore Sugar Packaging Plant and the fact that it had never even built a hospital.
This year again the hospital’s $910M construction budget allocation was cut.
Meanwhile, the Alliance For Change says it supports the Government’s decision to pull the contract for the construction of the specialty hospital and is ready to support efforts to recover monies already paid over to Surendra.
In a statement yesterday, it said that Guyana cannot afford to lose this money.
“What has happened in this case points clearly to the need for a Public Procurement Commission to better regulate and oversee the award of contracts.
“It is good that the Government has finally woken up and the AFC is calling once again for this Government to become fully compliant with of our Constitution and the Laws of Guyana”, the AFC said.
The AFC had pressured government over various aspects of the Indian company’s involvement in Guyana and particularly as it relates to the Specialty Hospital
