Specialty Hospital Project in limbo

Fedders Lloyd blacklisted by World Bank

By Vahnu Manickchand

The Specialty Hospital Project is once again placed on hold following the blacklisting of Fedders Lloyd

An artist’s impression of the Specialty Hospital Fedders Lloyd is proposed to build
An artist’s impression of the Specialty Hospital Fedders Lloyd is proposed to build

Corporation Limited, the Indian-based company contracted to complete and equip the state-of-the-art medical facility.

At the post-Cabinet briefing on Friday Minister of State Joseph Harmon disclosed that the construction company was barred from doing any World Bank-funded projects for the next four years and as such, the Government of India, which is funding the Specialty Hospital Project, has decided to cease doing business with Fedders Lloyd.

This new position, according to Harmon, was communicated to Government by the Indian High Commission here via a letter dated June 2016.

“(The letter said), among other things, the contractor Fedders Lloyd Corporation Limited was not eligible to continue the project because it was debarred or disbarred by the World Bank for projects until 2020 due to its procurement policy,” the Minister related.

He further stated that the Indian government expressed preference for a fresh tendering process to be conducted to select a new Indian-base contractor to execute the project.

However, Harmon pointed out that this new development has resulted in the project being once again put on hold to facilitate a new tendering process for a new contracting firm prepared to complete the project for the remaining US$13.8 million.

“The tendering process, as we are aware, actually takes quite a while – several months it takes – to be completed and while this process is undertaken, the loan sum continues to be eroded by inflation, interests and fees,” the Minister of State outlined.

He explained that in light of this development, the Ministers of Foreign Affairs, Finance and Public Health have been requested by Cabinet to make “certain enquiries” of the Indian Government before a definitive course of action is adopted by Guyana on the Specialty Hospital Project.

Indian Government response

Nevertheless, Indian High Commissioner to Guyana Venkatachalam Mahalingam subsequently told Guyana Times that his government is committed to working with Guyana to see the project come to fruition. He explained that the Indian government’s decision not to continue with Fedders Lloyd was as a result of the “blacklisting” status from the World Bank.

“World Bank has blacklisted Fedders Lloyd from April 6, this year until 2020… so we are going by World Bank’s blacklisting which was based on certain procurement policy and therefore we also don’t want to work with Fedders Lloyd,” Mahalingam declared.

On the other hand, when contacted, Public Health Minister Dr George Norton related that this hold-up in the project has delayed the process of Guyana benefiting from improved health services which the Specialty Hospital would be offering.

Nevertheless, he noted that government will go ahead and commence the process for a new contractor in the near future.

Asked whether government will appoint another contractor as it did in the case of Fedders Lloyd, as opposed to going to tender, Dr Norton said: “We will go over the entire process again, I don’t think there was a third person.”

The Specialty Hospital Project was initiated by the previous People’s Progressive Party/Civic (PPP/C) administration with the aim of catering for complicated surgeries, ranging from heart operations, organ transplants to cosmetic surgeries.

With a US$18 million Line of Credit from the Indian Government, the contract was awarded to India-based Surendra Engineering, to design and the facility, a project that the then A Partnership for National Unity/Alliance For Change (APNU/AFC) Opposition had heavily criticised.


However, citing instances of alleged fraud and delays, the Donald Ramotar Administration last year announced that it had terminated the contract of the India-based company and subsequently filed a lawsuit against the company for failing to honour its obligations. Guyana is yet to recover close to $1 billion from the company.

After coming to power last year, the APNU/AFC administration scrapped the Specialty Project with the expectation of diverting the remaining US$13.8 million towards upgrading three primary healthcare facilities – the Bartica, Suddie and West Demerara Hospitals.

But in November last year, government announced that it will go ahead with the Specialty Hospital Project and two weeks later, signed a Memorandum of Understanding (MoU) with Fedders Lloyd – one of the original bidders in 2012.

Government explained that after examining the merits of the proposal, it began searching for a willing partner to complete the Specialty Hospital using the remaining US$14 million. Hence, without any tendering it approached Fedders Lloyd to complete the project.

This caused much uproar and controversy after it was revealed that the Indian company was never the second best bidder in the tendering process back in 2012, as claimed by the APNU/AFC Government.

The PPP/C opposition had stated that the company was disqualified because of certain inconsistencies in its submission to the local Tender Board, a report which government contended was a lie.

Former Legal Affairs Minister Anil Nandlall had pointed out that the bid was never evaluated and therefore cannot be considered as the second ranked bidder.

In this regard, he slammed the government for bypassing the transparent process to handpick a contracting company, which is known to have close ties with senior government official Public Security Minister Khemraj Ramjattan, to undertake the construction of the Specialty Hospital.