Government yesterday filed a lawsuit against specialty hospital contractor Surendra Engineering for breach of contract and fraud and is seeking damages to the tune of $100M and the recovery of US$4.2M ($865M) in advance payments for the project.
“The defendant failed to perform their obligations under the terms of the contract and to account for the advance payment of US$4,285,440.00…. Instead, the defendant submitted fabricated, unsigned and sometimes inflated invoices with no evidence of actual payments made or to support the expenditure claimed,” Attorney General Anil Nandlall charges in the statement of claim for the action, which was filed yesterday in the High Court.
The matter is scheduled to be heard on December 3rd of this year in the Commercial Court.
According to the action, the Indian firm Surendra Engineering failed to complete works as specified in its contract, account for monies given for mobilisation of works and provide the renewal of its payment guarantee.
Nandlall says the company failed to design and complete the architecture drawings and building plans for which it received payments as well as to do mobilisation, site establishment and supply civil engineering materials, among other things.
He also notes that the company failed to properly account for the advance payment of US$4,285,440 by submitting payment receipts or to renew or provide the advance payment guarantee and the performance bond for the period March 12, 2014 to present, in keeping with the contract.
In addition to the contractual breach, government is charging that the company engaged in corrupt or fraudulent practices by attempting to obtain an advance payment and performance bond guarantee with Worldwide bankers Re Limited, of Trinidad and Tobago, a company not registered as an insurer in that country.
Nandlall says Surendra submitted a letter, dated January 13, 2012, purportedly signed by a D Singh, Director of Financial Institutions of the Central Bank of Trinidad and Tobago and purporting to confirm that Worldwide Bankers had more than five years in the reinsurance and coinsurance business and was authorised for those operations since 1998.
However, inquiries by government revealed that there was no Mr. Singh employed in the bank in any such capacity and the letter did not originate from the bank.
According to Nandlall’s filing, as a result of Surendra’s actions the government has suffered loss and damages.
Cabinet Secretary Dr Roger Luncheon yesterday informed that the court litigation was part of a three-pronged intervention Cabinet had agreed to.
The other two are terminating the contract, which has already been done, and pursuing criminal charges for fraud, which the police is currently working on. He said all stakeholders have been informed of the termination of the contract.
Further, Luncheon informed that government is seeking to have Indian Exim Bank officials travel to Guyana to have discussions with them on a way forward as it pertains to continuing execution of the contract.
“The recovery of public funds that is tied with the prosecution and it is related to an intended engagement with officials from Exim Bank,” he stated.
“We have sought with the assistance of the Indian government to have the Exim Bank officials visit and to engage us bilaterally on that and matters related to the construction to which government maintains its outmost commitment,” he further added.
Surendra’s Managing Director Brijen Parikh has so far rejected government’s allegations as baseless.
The company also accused the Donald Ramotar administration of seeking to back out of its commitments to the US$18M specialty hospital project and being responsible for the stoppage of work. The row between the two is a major embarrassment to the PPP/C government as both the Bharrat Jagdeo and Ramotar administrations had been accused of favouring Surendra for high-profile contracts.
Luncheon said that albeit Surendra’s failures, government remains steadfast in ensuring that the hospital be built.
