Procurement issues cause delay for India-funded contracts – Jordan

… several projects in limbo

Guyana is having a hard time securing contractors from Indian to carry out major projects that are being funded by the Asian country.

As part of the agreement for foreign funded projects, Guyana has to use contractors from those countries and with the Indian Government putting up monies for several major projects here, Finance Minister Winston Jordan said they are experiencing difficulties finding Indian contractors to execute the local projects.

“I think the problem that we are experiencing is that all of these projects have to have Indian-contractors and consultants, and we are experiencing grave problems in getting movement and traction, in getting these contractors on-board so to speak. That is why it is over a year since we signed the $50 million (bypass) road and nothing appears to have been done. It is not our fault and we’re trying desperately to get contractors out of Indian,” Jordan stated.

The Finance Minister went on to point out that this difficulty arises from the fact that new systems have been put in place in India, with regards to the procurement and tendering procedures.

“According to (Indian) High Commissioner, everybody is still trying to get familiar with (the new systems),” he noted.

Moreover, Jordan added too that the insufficiency of the monies for the projects also pose challenges for Government to recruit contractors from the Asian nation.

“This is $50 million (for the bypass road); it’s big for Guyana but it’s very little for Indian. So to get contractors who are interested is a bit of an issue really. So that is part of the problems we would have been having,” the Minister explained.

Back in March, Indian High Commissioner, Venkatachalam Mahalingam, had told Guyana Times that efforts are currently on the way to procure the services of a Project Monitoring Consultant (PMC) for the road project.

The Export-Import (EXIM) Bank of India is providing the loan for the project via a Line of Credit (LoC). The bypass road will link the East Coast and East Bank of Demerara at Ogle and Great Diamond respectively.

Nevertheless, Jordan went added that the Administration has written the Indian High Commissioner on several occasions in efforts to address the situation that has resulted in several major projects here being stalled.

“Maybe we’ll have to use other approaches to see how we can clear what appears to be a logjam,” Minster Jordan noted.

Among the India-funded projects that are on hold in Guyana are: the US$50 million East Coast-East Bank Demerara bypass Road; US$4 million for pumps; US$10 million for the procurement of a ferry vessel for the North-West District and some US$17.5 million for the modernisation of three local health care facilities.

With respect to the upgrade of the medical facilities, the Finance Minister revealed that with the $17.5 million being approved by the Indian Government, Guyana is now in the process of meeting the necessary conditions prior to disbursement. Under this project, the Suddie Regional Hospital, the West Demerara Regional Hospital and the Bartica District Hospital will all undergo a modernised facelift.

This project was is an initiative of the Coalition Government, which wanted to use funds set aside for the Specialty Hospital Project for the modernisation of the three primary healthcare institutions.

However, the Indian Government had committed to provide a separate loan to make-over the three hospitals in exchange for the Specialty Hospital Project to continue.

When asked for an update on the construction of the Specialty Hospital at Thursday’s press conference, Minister Jordan declared that the project has been dead for some time now.

Health tourism

With an US$18 million LoC from the Indian Exim bank, the People’s Progressive Party/Civic Administration was hoping to create a thriving health tourism industry locally with the construction of a Specialty Hospital.

However, the project quickly found itself in a series of controversy causing the then Government to end a contract with the India-based contractor Surendra Engineering in 2014, citing instances of alleged fraud and delays. The Donald Ramotar-led regime subsequently filed a lawsuit against the firm for failing to honour its obligations. Guyana is yet to recover close to $1 billion from the company.

While in Opposition, both the A Partnership for National Unity and the Alliance For Change had strongly opposed the Specialty Hospital and upon its assumption to office in 2015, it decided to scrap the project, which had already expended some US$4.2 million on certain preliminary works.

However after some convincing by the Indian Government, the coalition Administration hesitantly proceeded with the project, handing it over to another India-based contractor Fedders Lloyd to complete using the remaining US$13.8 million. But a few months later, that company was blacklisted by the World Bank until 2020, forcing the project to a standstill once again.