In terminating the $413 million contract for the rehabilitation of the Leguan Ferry Stelling, Attorney General Anil Nandlall has informed contractor S. Maraj Contracting Services that the government would be claiming against the performance and mobilisation bonds due to the delay in completion of works.
Public Works Minister Juan Edghill recently announced the government’s decision to terminate the contract, while noting the findings of the Audit Office of Guyana, which has determined that the contractor “is incapable, unable, and does not possess the wherewithal” to successfully execute the project.
In a letter to Satrohan Maraj, dated February 22nd, 2021, Nandlall noted that the $413,259,260 contract was executed on September 20th, 2018, between the firm and the government through the Transport and Harbours Department (T&HD).
The project was supposed to be completed on or before June 18th, 2019.
Nandlall said while the T&HD has granted several extensions, the project has been delayed 20 months.
“Thus far, your company has only completed a minimal amount of the schedule of works. As a consequence, your company has committed a fundamental breach of the terms of the contract and as a result hereof the Government of Guyana hereby exercises its rights to terminate the contract with immediate effect,” he wrote.
Nandlall added that the government would enforce provisions of the contract regarding the $43,325,926 performance bond, the $81,398,375 mobilisation bond, 10% of the contract sum as liquidated damages, and the value of the work not performed.
In addition, he said the government reserved the right to institute legal proceedings against the company for compensation for breach of contract and unjust enrichment, while advising Maraj to arrange to have the site cleared immediately.
The contract was inked during the tenure of the former Minister of Public Infrastructure David Patterson but the work done had prompted complaints from residents that the planks used were encrusted with barnacles and they demanded the immediate removal of the infested wood.
Edghill has said the contractor received payments totalling $199,435,000, representing almost 50% of the contract sum. This was referred to as “an unheard of scenario that is outside of normal procurement practices,” a breach of the Fiscal Management and Accountability Act, an act he described as “a corrupt transaction.”
In addition, a contract that was signed on September 20, 2018 and should have been completed in six months received an advance payment on September 26, 2018, however, the contractor only received his order to commence works on December 6, 2018. This meant, he said, that the contractor was in possession of tens of millions of taxpayers’ dollars for almost three months before being required to begin work.
He had also highlighted that the contractor, having received the contract for the building of a stelling, pronounced the bill of quantities as faulty and by October 30, 2019 was given an additional $20,650,000 for the supply and delivery of piles for the same Leguan stelling. A clearly frustrated minister deemed it as “inconceivable” that a contract for the building of a stelling will not include the piles, one of the most important components for its construction.
