During 2019 the Government of Guyana made nearly $200 million in overpayments on four contracts, including for the Leguan Stelling, an increase over the $166 million overpaid in 2018 on 157 contracts.
According to the 2019 Auditor General’s report which was laid in the National Assembly yesterday, government made overpayments amounting to $199.381 million on contracts administered by the Ministry of Finance, Ministry of Public Telecommunications, Guyana Defence Force and the Transport and Harbours Department (T&HD) in 2019.
Included in the $199.381M are amounts totaling $145 million and $25.529 million which were overpaid on the rehabilitation of the Leguan Stelling, and expansion of offices at the Civil Defence Commission Headquarters, respectively.
In the case of the Leguan Stelling the report explains that as of January 2020, payments totaling $199.435 million were made on the contract, which was awarded in September 2018 in the sum of $413.259 million.
“An undated and unsigned valuation, purportedly prepared by a Consultant and submitted for audit by T&HD stated that the actual value of works completed on site was $53.064 million, while our estimated value of works completed as of August 2020 was $50.970 million,” the report stated.
It further explained that at the time of reporting in November 2020, the works were still in progress, even though the estimated completion date was over one year ago. A special investigation has therefore been launched on the Project.
At the Civil Defence Commission, a 31 May, 2019 award was granted by the National Procurement and Tender Administration Board for the expansion of offices in the sum of $69.684 million.
The report records eight transactions totalling $65.865 million being processed in 2019 for payment to the contractor.
The actual sum paid was $61.458 million leaving a balance of $4.406 million while $1.254 million was paid over to the Guyana Revenue Authority as withholding tax.
Inactive
Despite these payments a physical verification on 17 September 2020 revealed that the works were incomplete and the work site was inactive.
“There were no materials or equipment on site [and] it was discovered that sums amounting to $25.529 million were paid for works which were incomplete in some instances, or had not even commenced in other instances,” the report details
Other concerns were raised about the project which had a commencement date of 20 June 2019, with a duration of six months for completion.
The report notes that two extensions were granted, with the new completion date being 20 August 2020 but since the basis for the extensions was not stated it could not be determined whether the extensions were appropriately justified. Further, it could not be determined whether any liquidated damages should have been applied.
In response to the observations from the Audit Office, the financial head of the Guyana Defence Force indicated that the completion of the project was raised in a meeting on 12 June 2020 where the contractor raised concerns about challenges to procure items and completion of external works due to COVID-19 restrictions.
“The contractor also indicated that he cannot commit to a time until the consultant submits all drawings and approvals. After that meeting, a revised work programme was submitted identifying 17 August 2020 as the date of completion for the project. A letter was sent informing the consultant that the CDC has no objections to the request, but the project should not be extended beyond 20 August 2020 followed by handover on 24 August 2020,” the GDF indicated.
