Stripped of the theatre and vaudeville, Tuesday’s 5.30 am meeting summoned by President Ali at State House underlined the serious problems facing state projects, something the public has been well aware of for years.
The meeting was ostensibly to address projects that were more than four months behind schedule. Persons familiar with the public sector programme immediately detected that big-name contractors seemed to have been given a pass. The minnows were left to await a dressing down.
Conceptually, the meeting was a failure from the outset. It is a Sisyphean task to summon persons at various levels of responsibilities to clarify matters in a public forum much less attempt to solve them. The inevitable will and did happen. Some persons were absent or late or were caught unawares. People will talk over each other or be at cross purposes. Proving and fending among ministers, permanent secretaries, engineers, consultants and contractors required a different forum. Not one where the President presided as judge and jury and in an adversarial manner to boot.
Further, what the presidential intervention did was to make a mockery of the involved process which caters for checks and balances in public projects. The projects that were under discussion on Tuesday flowed from Cabinet decisions to invite bids. These bids are presided over by the Evaluation Committees of the National Procurement and Tender Administration Board (NPTAB). On the award of the projects, the contractor, consultant and engineers are supposed to have conclaves within Project Execution Units or under the gaze of the Permanent Secretary or some other official in the ministry. These conclaves are meant to ensure that the project is proceeding according to the contract and the work plan and that any impediments in meeting timelines are removed efficiently. Such meetings are meant to be regular and productive.
That so many projects were on the master list held on Tuesday by the President as having fallen into delinquency highlights the chronic problems in public sector projects. The system is not working because the various stakeholders are not meeting and ministry officials are not discharging their functions. The State House hearing will not cure the problem. It requires a fundamental reorientation of the work ethic in the ministry and the holding of the feet of contractors to the fire. This problem dd not arise overnight. President Ali must surely be aware of that.
In April of this year, Attorney General Anil Nandlall SC announced that he had acted upon the edict of President Ali and issued instructions to ministries on the establishment of units to assess where projects are experiencing unjustifiable delays or there is evidence of poor work.
He said: “I act upon the instructions of His Excellency President Dr. Mohamed Irfaan Ali. You are hereby advised to immediately make functional within your respective Ministries and Project Units, a unit to specifically and dedicatedly evaluate the execution of all contracts being undertaken in your respective sectors, in order to assess the performance of the contractors in the discharge of their contractual duties and obligations.
“Once unjustifiable delays, substandard works and other such fundamental breaches of contracts are observed, then clauses of the contracts dealing with notification of the contractor of the alleged breaches, and remedial provisions dealing with sanctions such as liquidated damages, forfeiture of securities and termination etc., should be immediately invoked and activated.
“As part of this initiative and to support the work of these proposed units, a Contract Compliance Unit has been established at the Attorney General’s Chambers and Ministry of Legal Affairs. The functions of this Unit will be to provide the relevant legal advice and appropriate guidance and actions when requested, including, the filing of legal proceedings when necessary, just and expedient so to do”.
So, what happened with this wondrous process? No one complied or was it simply one of those diktats that aim to impress but never achieve anything?
The 2023 Auditor General’s report highlighted many cases of lax performance by ministries. One outstanding example was a $475m Vlissengen Road contract project under the Ministry of Public Works assigned to Avinash Contracting Service. From the outset this project was in trouble and the contract should have been cancelled. The ministry and its consultant persisted with it all the way to the end. Why?
The agreement was signed on 1 July 2022 and the duration of the contract was one year with a commencement date of 5 July 2022 and an intended date of completion of 6 July 2023. The defects liability period was one year.
“As at 31 December 2023 only an advance payment of $142.521m was paid to the Contractor. Examination of the Advance Payment Bond revealed that it had expired since 1 August 2023. Similarly, the Performance Bond had also expired on 1 August 2024. At the time of reporting in September 2024, the final account for the Contract was to be prepared. Physical verification on 15 August 2024 revealed that the works were substantially completed, and the roadway was in use, with the exception of the eastern drive lane of the bridge at Princes Street. However, no approved extensions of time were seen. In addition, an examination of the project files revealed that the Contractor was delinquent from the onset of the project and was flagged for poor performance throughout the entire lengthy period being taken to complete the works”, the Auditor General’s report said.
Further, it was noted from records that the Ministry supplied the contractor with seven steel beams to complete the bridge at Princes Street, and asphalt from the Demerara Harbour Bridge Asphalt Plant for roadworks, to the value of $48.8m. The Audit Office recommended that the Head of the Budget Agency should immediately desist from accepting poor performance from contractors, without terminating the contract or applying penalties, as set out in the contract.
Recently there was a disconcerting development at the expensive Port Kaituma stelling project where a contractor built the structure based on a flawed design. Gaping holes opened up at the incomplete structure and repair works had to be done at additional expense. Was the designer sanctioned and why weren’t the flaws picked up prior to construction?
These are the types of problems that pervade public sector projects and President Ali must have been aware of them or he is out of touch with his own government’s programmes. The solution requires ministries and their permanent secretaries to rigidly follow the schedules attached to these projects and to ensure that timelines are adhered to from the letter of commencement to the mobilization advance to the first mandatory inspection. One of the likely problems here is the appointment of inexperienced or incapable Permanent Secretaries.
There was a time when Permanent Secretaries were the most capable employees in their ministries having garnered years of experience and having risen through the ranks. These days, depending on which government is in office, party loyalists and the inexperienced have been parachuted into these jobs. No wonder there are problems.
From the contracting standpoint, President Ali should also not be surprised at the scale of the problems. Public sector projects have escalated both in terms of numbers and the value in the wake of the huge amounts of oil revenue being spent. Absorptive capacity is limited as has been the case for many years. Too few qualified contractors are around and many of those have avariciously bitten off more than they can chew.
The President would also be aware that PPP/C governments have signally refused to pilot an engineer’s bill in parliament which would separate the wheat from the chaff and improve the prospect that projects will not fail or be unduly delayed. Until the government ensures that only qualified contractors are entrusted with these major projects the public purse is at risk of failure and the additional expense that incurs.
On top of all of these shortcomings is the conduct of the NPTAB. It sits at the very apex of the procurement system and decides who gets which project. In the notorious award of the pump station contract to Tepui Inc – helmed by a social media influencer with close ties to the PPP – it was clear that he had been favoured for political reasons. Then there was the primary school award to entertainers and footballers with ties to the PPP which contract also saw major delays. From these and other examples, it is evident that the evaluation committees of the NPTAB have been commandeered to deliver certain projects to certain people no matter their incapacity. That is a winning recipe for the disorder that President Ali attempted to address on Tuesday at State House. The solution doesn’t lie in the jamboree-type event he convened. The fundamentals have to be followed at the level of the NPTAB and the ministries and government agencies. The country also desperately needs an engineer’s act. President Ali can have much greater impact in these areas.