The Public Accounts Committee (PAC) on Monday slammed the Maritime Administration Department (MARAD) for a plethora of discrepancies and contract breaches which were unearthed in the 2019 Auditor General report.
Following a one month recess, the 57th meeting of the PAC recommenced with members from both government and opposition outraged at a $27.1 million contract being awarded by MARAD to a contractor (unnamed) for incomplete works on the vessel MT Setter which falls under the Public Works Ministry.
PAC Finance Secretary Sukrishnalall Pasha reported that payments were made without a bank guarantee to which PAC Member Ganesh Mahipaul highlighted that this was in violation of the Fiscal Management and Accountability Act 2003.
Questions were raised about whether disciplinary actions were taken against the contractor to which MARAD Director General Steven Thomas said that individual or contractor services were terminated.
PAC Chairman Jermaine Figuiera, deeming the contractor’s actions egregious, said that the individual should have appeared before the courts charged with breach of contract as it was likely that he could have misused the funds given to him.
Similar contract breaches were found with regard to the ferries “Allan Young” and “David P.” to the tune of $36.4 million and $12.9 million, respectively.
Mahipaul, in agreement with the chair, said that MARAD should not have allowed these infractions to occur. Figuiera and Mahipaul suggested that the government agency up its game in relation to accountability as there should not be a recurrence in that regard.
Public Works Permanent Secretary Vladim Persaud told the Public Accounts Committee that mechanisms are currently in place whereas contractors must follow all terms and conditions in a contract before signage and issuance of payment.
The PAC was informed that a comprehensive internal audit was conducted on operations at MARAD based on a request by Minister of Public Works Juan Edghill amid this irregularity.
The Hinterland Electrification project which came under public scrutiny is currently being implemented according to updates provided by the Ministry of Public Works.
A sum of $129 million was the total allotment for the project including a contingency fund advance of $40 million.
It was noted that amounts totalling $79.7 million were expended and the balance of $49.2 million was retained by the Hinterland Electrification Company Inc instead of being refunded to the Consolidated Fund
The Project Execution Unit (PEU) of the Office of the Prime Minister, Guyana was established in 2004 to manage the implementation of the Government of Guyana (GoG)/InterAmerican Development Bank-sponsored Unserved Areas Electrification Programme (UAEP).
The main objectives of the UEAP were (I) to expand existing coastal electricity grids to unserved areas within a feasible distance from the grids, and (ii) to examine ways in which hinterland areas could be provided with electricity in the most cost effective and sustainable manner. With regard to the latter, the PEU implemented several demonstration electricity projects in hinterland communities to test their viability for possible replication in other communities.
The unit was also expected to develop and implement new projects based on the government’s development plan for the hinterland. Accordingly, the PEU was renamed Hinterland Electrification Unit (HEU), and it remained part of the Office of the Prime Minister.
In January 2015, however, the HEU was incorporated (with the name Hinterland Electrification Company Inc.) as a subsidiary of National Industrial and Commercial Investments Ltd. (NICIL) for holding of all satellite electricity companies owned by NICIL.
The satellite companies are Linden Electricity Company Inc, Kwakwani Utilities Inc, Lethem Power Company Inc, Port Kaituma Power & Light Inc, Mahdia Power & Light Inc and Matthew’s Ridge Power & Light Inc.
Approval for restrictive tendering was given for the acquisition of a generator for Kwakwani Utilities Inc at an estimated cost of $40 million.
However, Mahipaul asked if there was a transparent procurement process since the generator reportedly was not delivered.
The Public Works Ministry in response said that the generator was delivered and is currently operational at Kwakwani.
The ministry’s permanent secretary said that systems were implemented to ensure full compliance in alignment with the Public Procurement Act.
Government elected PAC Members Dharamkumar Seeraj and Vishwa Mahadeo heavily criticized the Public Works Ministry for commencing works on roads and drainage in hinterland and coastal regions, when 21 awarded contracts totalling $248.6 million were in breach of the Procurement Act.
According to the Ministry of Public Works there were corrective measures taken such as the strengthening of terms and conditions in a contractual agreement.
Though a forensic audit was conducted, the ministry could not say if it was finalized when grilled by the PAC.
The PAC chairman also suggested that the ministry goes back to the drawing board in relation to the construction of roads in several far-flung communities as the current 10 feet dimension poses challenges for motorists.
He noted that roads should be expanded to 14 feet to complement the magnitude of vehicles and their widths.
Figuiera said that this modality should be adapted by the government ministry in order to match the Present Serviceability Index (PSI) which measures the volume and condition of roads or pavements.
Meanwhile, opposition members were also outraged at a $86 million contract being issued for the geometric improvement of Hunter Street while the procurement method utilized could not be determined.
Physical verification confirmed that the contractor in question failed to pursue work diligently despite three years extension followed by $120,000 paid for safety and traffic control which was not visible based on inspection. Moreover, a final account was yet to be prepared pending the completion of works.
They dubbed this unacceptable and urged the ministry to institute corrective measures in that regard since there were too many discrepancies.
Figuiera requested updates on the Linden-Mabura and Kurupukari Bridge projects which received $200 million that were fully expended.
Persaud informed that the Kurupukari Bridge project is currently undergoing a procurement phase by the National Procurement and Tender Board Administration (NPTAB) to ensure that the work when executed was done efficiently and correctly. In relation to the Linden-Mabura Road project 2 kilometres of asphaltic road have been completed and preparations are ongoing for another 5 kilometres, he told the PAC.
Mahipaul said that the community of Malali had raised concern over the Brazilian contracting company Alya Constructora, mining laterite from their land and asked if they (the villagers) were being compensated.
Persaud in response to this informed the committee that the Guyana Geology and Mines Commission has issued a cease order on mining of the laterite.
Mahipaul requested that Persaud present the contract with the Brazilian firm, as well as the compensation that was agreed between the company and the village as proof to the PAC.
