Permanent Secretary of the Ministry of Public Works (MoPW), Vladim Persaud, yesterday said that he has recommended to the Attorney General that all contractors who have outstanding debts to the state and have not completed infrastructural projects be debarred from bidding for future contracts.
However, he was told by the Parliamentary Public Accounts Committee (PAC) that only the Public Procurement Commission has the authority to do so and his plans should be put on hold until a commission is established to address the issue.
The Auditor General’s report for the MoPW revealed that at least two contractors were overpaid for infrastructural projects and monies were still to be recovered by the end of 2016. During an examination of the audit report for the MoPW yesterday by the members of the PAC, concern was raised over the $110 million owed to the state by Courtney Benn Contracting Service (CBCS) for preparatory works for the upgrading of the La Bonne Intention to Beterverwagting, East Coast Demerara, highway.
Initially, the total cost of this project was just over $349 million.
The findings of the Auditor General indicate that CBCS was overpaid the sum of $120,683,000 on valued works and that approximately $110 million was still to be recovered at the end of December 2016.
Addressing the overpayment issue, MoPW engineer, Nigel Erskine, stated that there was a revision of the original scope of works stipulated in the contract. He explained that when the contract was awarded, works included the construction of a concrete revetment on the northern side of the road but when the project started there were difficulties procuring the requisite material.
He said that it was on that basis that a decision was made to revise the contract and it was decided that they switch from concrete to timber revetment.
Erskine pointed out that the change in the scope of work occurred on March 17th, 2013 and the switch from concrete to timber revetment is what resulted in the overpayment to CBCS. He added that there was also a provisional sum of $100 million for the relocation of utilities so the project included the expansion of the road in preliminary works. He noted, however that the $100 million was not exhausted.
The total cost of the project is $157 million. According to APNU+AFC MP Ganesh Mahipal, CBCS received three advance payments totalling $264 million, which is 76 per cent of the initial contract sum and the advance was paid before construction started. He questioned the former MoPW Permanent Secretary, Balraj Balram as to the reason such a massive advance payment was given and if it is a habit of the Ministry to do so.
Balram stated that he does not have any information about that and when payments are authorized by him, they are based on the engineer’s evaluation.
Meanwhile, Persaud said that they wrote the contractor four times in 2017 requesting that CBCS repay the monies owed and went on to do so again, three times in 2018, twice in 2019, and once in 2020. In 2021, he noted that CBCS was written to, requesting that the contractor make restitution. No response has been received to date and the Ministry continues to implore the contractor to pay the outstanding sum of $100 million. The last payment made by CBCS to the Ministry was in December 2017.
In view of the failure of the contractor to pay, the Ministry has since written to the Attorney General asking for action to be taken against CBCS. Persaud further stated that when he took office in 2020, he made the decision to cease all CBCS contracts because this case is only one of several similar cases and the contractor still has several outstanding works to be completed.
Persaud emphasised that the Attorney General is being engaged regarding the matter. However, he said the decision was taken that CBCS will not be awarded any more contracts as it has outstanding debts to the state and uncompleted infrastructural works.
APNU+AFC MP Jermaine Figueira who was chairing the meeting, noted that such a decision is not in the remit of the Ministry, but rather, one of the Public Procurement Commission. “I don’t believe the PS [Permanent Secretary] on his own accord can make such a decision,” he said.
Persaud subsequently stated that “those recommendations” are in process, adding that the Ministry will be guided by the debarment regulations. In response, Figueira requested that the PS’ efforts be put on pause until the Public Procurement Commission is recomposed to deal with the issue.
In this regard, Minister of Governance and Parliamentary Affairs Gail Teixeira said that the process for debarring contractors is laid out in the Public Procurement Act, adding that debarment is not enough and focus should be placed on getting the money back.
Meanwhile, in relation to the preparatory works for the upgrading of the Beterverwagting to Triumph Road, the audit report revealed that the contractor for this project was overpaid $132.6 million and the sum of $122 million was still to be recovered by the end of December 2016.
According to the report, $20.649 million has since been repaid leaving a balance of $112 million. The contractor was written to on September 11th, 2020, requesting restitution of outstanding debts. However, no response has been received since.
Persaud noted that they have written to the Attorney General seeking his advice on this matter stressing that no one has been debarred from bidding for contracts, but given the outstanding debt they will have to consider such action.
This particular contractor’s name was not revealed. And once again, it was reiterated by members of the committee that such a decision is not in the remit of the Ministry and if such actions are taken it would be against the law. Figueira added that the goal is to ensure that the monies are repaid to the state.
