US0M airport deal
… calls Ministry a ‘black hole’ for public funds
Public Infrastructure Minister David Patterson is being challenged to come clean with the public regarding the changes the Administration would have made with regards to the scope of works for US$150 million expansion of the Cheddi Jagan International Airport.
The challenge was issued by Opposition Leader Bharrat Jagdeo, who this past week told media operatives that the coalition A Partnership for National Unity/Alliance For Change (APNU/AFC) Administration has in fact reduced the size of the facility – to be built at the original price.
Jagdeo told media operatives that according to the information supplied to him, the Government when it amended the contract with China Harbour Engineering Corporation (CHEC), substantially reduced the size of the new terminal building.
He suggested that Government may very well want to disguise the variations by including the total square footage of works to be done in the rehabilitation of the old facility.
As such, Jagdeo has called on the Minister to provide to the nation a disaggregated scope of works. Jagdeo said the original plan was to tear down the existing facility and to construct a brand new terminal but the current Administration has since changed this.
According to the Opposition Leader, the information being sought is imperative in light of the recent Auditor General’s report for 2015, which Jagdeo said outlines the Ministry as being a black hole for public funds.
That report was highly critical of the operations of the Public Infrastructure Ministry which was found to be in the habit of making multiple advance payments to contractors in breach of stipulated contractual obligations and has been unable to recover the hundreds of millions of dollars paid for works not completed or abandoned altogether.
It was documented that as it relates to the road works to be undertaken between La Bonne Intention (LBI) and Beterverwagting, East Coast Demerara (ECD), not only was the contractor overpaid and the Ministry still unable to recover its monies, but it was found that the contractor had, in fact, received three advance payments in contravention of the contract agreement.
The Auditor General, Deodat Sharma, also found that a physical verification check carried out on that project revealed that while there were variations made to the original scope of works, it appeared that the site was in fact abandoned, “with no equipment or personnel from the contractor on site”.
The three advance payments totalled $264.1 million, which represents 76 per cent of the contract sum.
The contract, however, “only allows for an advance payment of 50 per cent… This is a breach of contract where the contractor was paid advances greater than that which is allowed for under the contract.”
Compounding the situation further, Sharma found that at the time of reporting, a valuation of the works completed was $157.7 million; “however, the actual payments made to the contractor totalled $278.3 million.”
As such, the Auditor General concluded that the contractor received excess payments totalling $120.6 million.
Auditor General Sharma found too that with regard to road works to be undertaken between Beterverwagting and Triumph, ECD, at the time of reporting, the works were incomplete and the site appeared to be abandoned.
Sharma has since managed to deduce that the contractor, in this instance, also received three advance payments, this time totalling $209.6 million, representing 65 per cent of the contract sum.
This situation persisted, despite the fact that the contract only allowed for an advance payment of 50 per cent.
“This is a breach of contract where the contractor was paid advances greater than that which is allowed for under the contract,” Sharma stated.
Sharma said too in his report that at the time of reporting, a valuation of the works completed put their value at $77 million.
As such, “the contractor received excess payments totalling $132.6 million at the time of the physical verification.”