Although justifying the leasing of the Sussex Street bond for the storage of drugs, the Cabinet Sub-Committee that reviewed the deal has recommended that government should try to negotiate a reduction of the agreed $12.5M monthly rental fee.
According to the sub-committee’s report, which has been seen by Stabroek News, the lease should be revisited and strengthened and if there is a refusal by Linden Holding Inc, government should give a year’s notice of a termination of the lease and build its own facilities in the intervening period.
“With respect to the rental sum of $12,500,000 it is the sub-committee’s considered opinion that the value should be re-assessed as it is likely that a similar facility could be obtained at a lower rate,” the report says.
It adds that the general terms of the lease “are not altogether unfavourable” to the Ministry of Public Health as the lessor is obligated under the agreement to maintain the facility at a standard that will meet national and international specifications for the stoprage of drugs and pharmaceuticals.
However, the sub-committee added that the agreement could be strengthened with more specific terms that address insurance and maintenance.
It also recommends that the Ministry of Public Infrastructure should have direct responsibility for leasing and construction of all buildings by the government and should issue a Certificate of Acceptance prior to any lease or purchase agreement being signed, or a constructed building being occupied.
President David Granger appointed the sub-committee to review the Public Health Ministry’s decision to lease the bond, in light of the discovery that statements made by Public Health Minister Dr George Norton to the National Assembly on the facility were inaccurate.
The sub-committee, which comprised Prime Minister Moses Nagamootoo, Minister of State Joseph Harmon and Natural Resources Minister Raphael Trotman, addressed the necessity of the leasing the bond and noted government needed to find alternative space at the earliest possible opportunity and Norton was acting in accordance with a Cabinet directive when he tasked the health ministry’s staff to find and secure a suitable bond at the earliest possible time.
The Public Health Ministry had previously been utilising a New GPC storage warehouse at Ruimveldt rent-free, while that company had been the primary sole-source supplier of drugs and pharmaceuticals to the ministry.
The sub-committee report notes that the ministry this year instituted a new procurement model that remove the single sourcing arrangement enjoyed by New GPC and introduced an open tendering process, following which the company is said to have requested payment for use of the Ruimveldt warehouse.
Norton, the report says, advised Cabinet that the continued use of the warehouse was undesirable because the sum being sought was excessive and that in the open bidding process there could be allegations of conflict of interest by other suppliers about the use of the New GPC warehouse.
The sub-committee acknowledges that the New GPC warehouse is larger as is the government’s own facility at Diamond.
On the former, it says that it should be noted that the Auditor General’s report had found that the state lost $282M worth of drugs in recent times due to expiry while stored at the New GPC’s bond. On the latter, it adds that though there is argument that the government-owned facility has enough space for all drugs, there are also other considerations. “This argument appears potent on the face of it; however when one considers that the supply of drugs is an essential service that impacts the lives of tens of thousands of persons, it is inadvisable to locate all supplies in one (1) location as a fire or some other natural disaster can have calamitous consequences to the national health care system,” it argues. It further points out that the location of the Diamond facility can affect supplies and distribution, given traffic problems along the East Bank. It was stated that Public Health Ministry personnel indicated that this was one of the reasons why the previous government opted to continue to use the Ruimveldt facility.
Misled
Meanwhile, although government has admitted that Norton misled the National Assembly during questioning about the bond on August 8, 2016, the report says he was apparently misled by officials of his ministry when he provided the information.
The sub-committee found that two statements made by the minister during questioning in the Committee of Supply were inaccurate, although he believed them to be true.
The two responses that were reviewed were in relation to questions posed by opposition Member of Parliament (MPs) Juan Edghill and Dharamkumar Seeraj.
In responding to a request from Edghill to explain how the facility was secured, Norton told the House that the government was paying the New GPC $19 Million a month for rental of its storage bond.
This proved to be inaccurate but the sub-committed noted that as permission had already been granted for the payment, “it is easy to understand that the minister could’ve been under the belief that the payment had been made.”
Norton, in response to Seeraj’s question about whether pharmaceuticals and medical supplies were being stored at the Sussex street bond, had said that they were. The sub-committee concluded that this could be explained by the minister having never visited the installation and therefore providing an incorrect answer.
It, however, added that Norton should issue a public apology for the misstatement and explain the circumstances in which it was made.
Norton has since committed to issuing the apology to the Speaker of the National Assembly, which is presently in recess.
The APNU+AFC government’s single sourcing of the contract to businessman Lawrence Singh, of Linden Holding Inc, which has had no previous involvement in the storage of pharmaceuticals, has raised questions about who in the administration made the initial connection with him. This is not answered in sub-committee report, although it says it was Permanent Secretary Trevor Thomas and other staff of the Public Health Ministry that commenced the search for the storage space.
In addition, former Auditor General Anand Goolsarran has said that a sub-committee of Cabinet should not have been reviewing the controversial deal as it was Cabinet which had been reported to have had made the decision to sign off on the rental in the first place.
“While I welcome the decision of the President to review the rental agreement for the storage of drugs and medical supplies, I am equally disappointed that a sub-committee of Cabinet has been charged with the responsibility of doing so. It was the same Cabinet that approved of the arrangement in the first place. The public is likely to find it hard to accept the results of the review if the Ministry of Health is exonerated.
“It is my sincere hope that the President will reconsider his decision and appoint an independent and competent three-person committee to look into the matter and report back to him,” Goolsarran said last week.
