In relation to the Ministry of Health’s Headquarters’ construction originally valued at $356.826 million, PPP/C Member of Parliament Gail Teixeira has urged a special audit of the project.
She was speaking during a recent Public Accounts Committee (PAC) sitting where the 2019 Auditor General’s report for the Health Ministry was under review.
Teixeira, also the Minister of Parliamentary Affairs and Governance, expressed concerns about potential irregularities in the procurement and construction processes, emphasizing the need for scrutiny to ascertain whether mistakes or other factors contributed to contractors being paid for incomplete work. The PAC endorsed her recommendation.
Teixeira stated, “This entire project, the entire building, was a violation of several aspects of the procurement and construction of a major project which cost an enormous amount of money which had to be terminated and restarted. A number of mistakes were made, but nevertheless, they need to be scrutinized to ensure that this was just mistakes, people don’t know their jobs, or that this was other things happening that facilitated a contractor being paid for works that were not done. These should be further investigated by the Auditor General’s office.”
Providing background to the PAC, Permanent Secretary (PS) in the Ministry of Health Malcolm Watkins highlighted the challenges inherited with the project, including issues flagged in a special audit report from the Auditor General. Originally budgeted at $356 million, bids exceeded this, with the contractor seeking over $850 million for completion. As a result, the original contract was terminated, and a new tender secured a different contractor, leading to functional completion by July 2023.
Former PS Collette Adams detailed the project’s initiation, noting that the initial design and bill of quantities were provided by a former engineer. Recognizing potential issues, approval was sought to appoint a supervisor, Vikab Guyana Ltd, tasked with reviewing the project and providing guidance. Vikab Guyana Ltd’s phased redesign addressed technical omissions, resulting in a recalculated cost estimate exceeding $500 million. Despite attempts to rectify issues, unauthorized changes and variations occurred, lacking proper documentation and drawing scrutiny from the Auditor General’s office. While unsure if further redesigns occurred after she left office, she said that Chung’s Global was awarded the contract through the tender board and evaluation committee’s assessment.
Acknowledging that cancelling the award and retendering would have been preferable, it was deemed unfeasible as the contractor had already mobilized. However, after identifying technical issues in the bill of quantities, discussions with the contractor led to a decision to cancel. Despite this, the contractor insisted on proceeding, prompting the request for a supervisor to assess the project’s feasibility within the existing contract parameters.
The contract, awarded to Chung’s Global in November 2017, faced subsequent revisions to the bill of quantities due to vagueness, necessitating the appointment of Vikab Guyana Ltd for guidance. Despite recognizing flaws, the contract proceeded, leading to significant cost discrepancies and unauthorized changes. However, documentation supporting these changes and approvals were lacking, drawing scrutiny from the Auditor General’s office.
This contract was remarkably below the engineer’s estimate of $546.751 million. The projected cost then skyrocketed to $870 million, with the project still incomplete by 2020. Questions were posed by Teixeira about what occurred between 2018 and 2020: Was there an overrun? Were letters issued to contractors? Were engineers approving additional costs without due diligence?
APNU+AFC MP MP Ganesh Mahipaul emphasized the importance of engineering oversight to prevent missteps and ensure accountability, as the project’s total cost escalated to $870 million, necessitating additional funds for completion since 2020.
