Govt to return to tender for Specialty Hospital Project – Dr Norton
Fedders Lloyd blacklisting
In light of Fedders Lloyd Corporation Limited being blacklisted over fraud and corruption practices by the World Bank, Minister of Public Health Dr George Norton said that the government has already taken a decision to discontinue a Memorandum of Understanding (MoU) signed with the Indian-based company and will now put the project to tender.
Speaking with Guyana Times on Sunday, Dr Norton said that after learning about the company being blacklisted, the government held a discussion in this regard.
“We had a discussion and that discussion would have been as a direct result of what was revealed by the World Bank and that was only revealed recently… We will have to change the company… There is no doubt we will go to tender to get a new company as early as possible,” Dr Norton told this publication.
The A Partnership for National Unity/Alliance For Change (APNU/AFC) coalition had ignored a evaluation report compiled under the previous People’s Progressive Party/Civic (PPP/C) Administration, which disqualified Fedders Lloyd for the same project in 2012, and last year signed an MoU with that company to complete the Specialty Hospital after Surendra Engineering was sacked.
Public Security Minister Khemraj Ramjattan, who once provided legal services for Fedders Lloyd, defended the company’s selection by his government, arguing that the company was being victimised by the previous government.
The APNU/AFC government had also argued that in the interest of time and without any tendering process, it approached Fedders Lloyd, which was willing to complete and fully equip the medical facility with the remaining US$13.8 million of the US$18 million Line of Credit from the India Exim (Export-Import) Bank.
However, in April the New Delhi-based company was blacklisted by the World Bank under its fraud and corruption policy as set forth in the Bank’s Procurement Guidelines or the Consultant Guidelines, forcing the APNU/AFC Administration to sever ties with the company, which had already commenced works on the hospital at Liliendaal, Greater Georgetown.
According to the World Bank website, the company has been sanctioned from April 6, 2016 to April 5, 2020 for breaches of the institution’s procurement guidelines in 2004 and in 2010. The guideline, 1.14(a)(ii), under the heading ‘Fraud and Corruption’ states: “Fraudulent practice is any act or omission, including a misrepresentation, that knowingly or recklessly misleads, or attempts to mislead, a party to obtain a financial or other benefit or to avoid an obligation.”
Further examination of the World Bank’s notes on the debarred firms and individuals, it explained the company will have to adhere to certain conditions during the period of sanction before it can be allowed to work on projects financed by the institution:
“The period of ineligibility of Fedders Lloyd Corporation Limited extends to any legal entity that they directly or indirectly control.
The company is ineligible to be awarded Bank-financed contracts for a period of four years.
At the end of the Period of Debarment, the Respondent and the Sanctioned Affiliates may be released from debarment, provided that they have met corporate compliance conditions, cooperated with the WBG (World Bank Group) and fully complied with the terms of the NRA.”
Last year, the government faced a barrage of criticism for hand-picking Fedders Lloyd, including from the Opposition, People’s Progressive Party/Civic.
Following this recent development, a PPP/C official pointed out that had government considered the advice and warnings from the Opposition, this situation would not have arisen and the project would have avoided further delays.
The PPP/C official further noted that in effect, the coalition administration had single-sourced the contractor and further alleged that government’s decision may have been influenced by the fact that the company had financed the party as well as individuals.
Political commentators Ramon Gaskin and Dr Henry Jeffery had also criticised the government initially for bypassing the public procurement system and handpicking Fedders Lloyd.
When contacted on Saturday, they noted that they are not surprised at the fact that the firm has been sanctioned by the World Bank especially since there was complete lack of transparency in the award of the contract to it.
Gaskin told this newspaper that Fedders Lloyd is no good in the interest of Guyana; just as the first India-based company, Surendra Engineering, was not. “Surendra was no good – we had a lot of problems with them in terms of money – and Fedders Lloyd is no better… These foreign contractors are bad news,” he asserted.
Dr Jeffery outlined that it was unfortunate that foreigners had to become involved in the matter for the right thing to happen: “People have been saying that the contract should have gone to open tender but government failed to do so.”
Nevertheless, Dr Jeffery noted that Guyana wins in that the project will now rightfully go to tendering and this should be a lesson learned for the coalition government.
Both political commentators also underscored the need for the APNU/AFC administration to take steps to have the Public Procurement Commission established.