Conversation Tree Road Project: Govt seeks new contractor as it engages T&T firm on termination terms

Public Works Minister Juan Edghill

The Guyana Government is currently working out the arrangements to have a new contractor complete the Conversation Tree to Dennis Street Road Expansion Project – a section of which has been left abandoned by the Trinidadian contractor Kalco Guyana Incorporated.
Initially pegged at $1.8 billion, the road project was split into two lots, with the first lot having already been completed by S Jagmohan Construction and General Supplies Inc. However, the second phase, which was awarded to this Trinidadian company, has been stalled for several months now, and that contractor has been flagged on multiple occasions for poor performance.
On Thursday evening, President Dr Irfaan Ali and a technical team inspected the uncompleted section of the road, and he instructed that the team meet the following day to discuss the way forward on the road project.

The uncompleted section of the Conversation Tree to Dennis Street Road Project

That meeting was held on Friday, and according to Public Works Minister Juan Edghill, efforts are being undertaken to have the stalled road works completed.
“Several decisions were taken on going forward with the project…The project will be completed,” he assured when contracted by Guyana Times.
Edghill further told Guyana Times that a new contractor would be selected by Monday. “We have to engage somebody, and then I can say who (will complete the project). And we have to determine what rates would be charged, and what it would cost coming out of this contract and giving it to somebody else – what is the extra cost and all the rest of it, because that is a contract that had been issued now two years ago,” Minister Edghill has stated.
He added, “So, there are a number of things that are happening. You don’t just take something from (one party) and give it to (another party), there is a process… When we complete everything, I will be announcing what we’re doing. This would be by Monday or so… We’ll be working through (the weekend) to get all our measurements done and everything, then we’ll be talking about that.”
Currently, works are not ongoing at the site, even though the initial project deadline was set at November 5, 2023. In fact, during an inspection conducted on March 4, it was indicated that Kalco had instructed its engineers to halt operations.
As a result, the Public Works Minister disclosed on Friday that the process to terminate the contract with the Trinidadian company has already been activated.
Earlier this week, it was announced that Government is moving to terminate the $830 million contract with Kalco after the company “did not live up to expectations.”
On Friday evening, Minister Edghill and his team had a virtual meeting with the Trinidadian company to iron out the conditions of the termination, including liquidated damages. Asked for an estimate of what this amount could look like, the Public Works Minister explained that the general rule of what the contract requires is 0.1 per cent per day for up to 100 days of delays, or a maximum of five per cent of the total amount of the contract. In this case, the Kalco contract was to the tune of $830,293,458.
Nevertheless, as the technical team works on advancing the project, President Ali has ordered that immediate drainage and irrigation works be done at the unfinished section of the road in the meantime, to avoid flooding in the event of heavy rains.
“We have to do some D&I work here, because I don’t want this remaining work to cost us. We have to make some decisions here,” the President stated during his site visit on Thursday evening.
This move by the Government to end the contract with the Trinidadian company comes on the heels of efforts to clamp down on contractors that are lagging on projects being executed for the state.
Just last week, during a meeting with representatives of ministries and agencies responsible for awarding and monitoring Government contracts, President Ali ordered that penalties outlined in several Government contracts be enforced for companies that continue to default on their contractual obligations.
At that meeting, the Guyanese Leader also instructed that project updates for several ongoing works be completed for review, and according to Minister Edghill, work has been ongoing to fulfil the President’s order.
The project updates will be provided to the Attorney General and Legal Affairs Minister Anil Nandlall, S.C., and letters of notice would be issued, while the Finance Ministry is tasked with calculating the liquidated damages.
Liquidated damages refer to a provision allowing for the payment of a specified sum in the case of a breach of contract. In this case, the President says the Government will go after those defaulting contractors that have gone past their project deadline and the justifiable extensions.
“All projects beyond the contracted time, where we have exhausted justified extensions, (we will) issue a letter today instructing that the liquidated damages be instituted immediately. We cannot tolerate this,” the President has said. “The Minister of Finance (Dr Ashni Singh) will ensure that the internal auditors clarify the related damages and ensure that they’re calculated and deducted,” Dr Ali said at the time.
Further, the Head of State disclosed that action must now be taken to strengthen project management teams in the public sector. Consequently, units are now being established at the various ministries and state agencies to assess the performances of contractors carrying out Government projects. Additionally, a Contract Compliance Unit has been established at the AG Chambers to support the work of those units. President Ali had noted that all project managers and senior engineers under this unit would be properly qualified.
“We are adopting a no-nonsense approach in contract management. We are going to have an independent team managing and reviewing project files, so that we have project audits. As project engineers and project managers, you have to ensure that your files are updated, and your minutes are recorded and signed. As we take action, we have to get paperwork intact,” the Head of State has said. (G-8)