Following sustained opposition by the Private Sector Commission (PSC) to the city parking meter project, contractor Smart City Solutions (SCS) has dismissed the criticisms as “self-serving and uninformed” while maintaining that both the capital and its residents would see benefits.
In recent advertisements, the PSC highlighted “flaws” it found in the deal, while saying there is “impropriety and secrecy surrounding the planning and arrival” of the project, that it by-passed national procurement legislation and procedures and that the city did not manage to strike a lucrative deal.
The ads came after a call for the city to reconsider the project but SCS, in a statement issued yesterday, maintained that in the interest of transparency, it had met with the Chairman and a number of members of the PSC executives and informed them of the company’s background and experience and its plan for implementation of the parking meter project.
The statement further states that an offer was made in September to “present a full brief on the project and respond to any questions or concerns which the business community may have with regard to the implementation of the project.” However, SCS noted that when it showed up to make its presentation to the PSC, only the Vice Chairman, Executive Director and one member was present. Having then made its presentation and responded to all questions asked, SCS maintained that “it is less than honest” for the PSC to claim that there is “secrecy surrounding the project” and ask “what really are the details of the contract?”
SCS also revealed that at their first meeting in August the PSC had asked if the company would be interested in partnering with local investors. This request, SCS said, raises questions about “the current motives of the Commission in attacking the project at the point of implementation.”
Responding to questions about why the City Council could not manage the project itself, SCS said the City Council “did not and does not have the financial resources nor the experience and skills to procure, install, manage and operate a highly specialized, capital intensive, high risk metered parking system such as the traffic intensity in Georgetown demands.”
In fact, it states that because the city did not have the resources to finance a feasibility study for the project, SCS “committed its own capital and resources to conduct a Feasibility Study and its findings have formed the basis for the contract entered into with the City Council and the company’s design of the project.”
Concerns about the failure to release the full details of the contract were also dismissed, with SCS noting that all of the critical details of the contract are already in the public domain and have been widely published and that the full contract was shared with the government and reviewed by the Ministry of Finance and the Attorney General’s Office.
“At the time of these reviews, the critical terms and conditions of the contract were based on the general assessment of the parking project and the rates proposed, though consistent with international norms, were identified at the maximum limit and, indeed, this was recognized by the Attorney General’s review.
As a result, the terms of the contract were generously amended to substantially increase the consideration paid to the city from 20% of gross revenues, that is before profit, if any, to 25% and then to 30% over the life of the contract,” it said, while accusing the PSC of misleadingly implying that the revenues received by the city are net rather than gross.
SCS reminded that having borne the “full investment risk of the project,” the revenue remaining after paying council must “first cover the full installation costs, the full operating costs of the system, the mobile security and enforcement costs, promotion and public awareness costs, amortization of the entire investment costs and administrative costs before any profit is realized.”
“The Company bears the full investment risk of the project. The City of Georgetown benefits, free of cost, from the appreciable revenue and the citizens of Georgetown benefit from the resolution of an increasingly chaotic traffic condition escaping thousands of wasted hours, wasted gasoline and wasted time searching for parking and from significant security imposed by the policing of the project,” it added.
SCS also said that assertions that the contract for the project “has a ‘status’ of bypassing national procurement legislation and procedures” is simply not true and is unfounded.
“The fact is that the National Procurement Act does not apply to the Mayor & City Council as a procuring entity which is governed under the Municipal and District Council Act. The M&DC Act does not address the issue of procurement with regard to the services being provided by Smart City Solutions,” the statement said. However, former Auditor-General Anand Goolsarran has said that in accordance with Section 231 of the Municipal and District Councils’ Act, before entering into any contract for the execution of any work or the supply of any goods to the value of $250,000, or more, a council is required to give notice of such proposed contract and “shall by such notice invite any person willing to undertake the same to submit a sealed tender thereof to the council….” Goolsarran has called for the project to be withdrawn.
The PSC is not alone in criticising the deal. Deputy Mayor Sherod Duncan and the Transparency Institute of Guyana Inc have been very critical of the deal and believe that it should be scrapped in light of procurement regulations not being followed. Members of the public have also criticised it.
The Ministry of Finance review severely criticised the initial contract, saying that procurement rules may have been transgressed, while the review by the Attorney General’s Chambers also pointed out that the terms highly favoured the contractor.
The reviews, however, did not find the contract to be illegal and the central government recommended only that the city renegotiate the contract after seeking the advice of an accountant.
In October, a majority of city councillors voted to approve amendments to the contract, including a lower toll as well as the reduction of the length of the contract to 20 years from 49 years.
