Brazil to Guyana fibre optic cable… Dax contract is born out of corrupt intentions – Lawyers

May 04, 2015 News

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– agreement ignores termination and penalty clauses, time frame for completion

Most, if not all contracts between Government and any contractor for any national project are supposed to have certain central conditions.
The contract must have, at least, the timeframe within which that project must be completed, a termination clause, a penalty clause and comments regarding insurance.
But these very fundamental conditions are absent from the recent two-page agreement signed between the current administration and Dax Contracting Services Ltd. on the rehabilitation of the Brazil to Guyana fibre optic cable project.
In fact, the contract between the two, sees Faisal ‘Dax’ Mohamed, receiving billions of dollars worth in concessions with Government even making a commitment to provide a financial contribution to the local contractor.
It is against this background that lawyers are of the firm opinion that the ‘Dax agreement’ lacks the makings of a legal contract. They went further to state that it is “nothing but another give away, a sweetheart deal and another move in Government’s plans to grab and control the telecommunications sector.”
The termination clause describes what will happen if the contract is ended early or defaulted on.
It can make the contractor that is responsible for the default or termination pay damages to the other party.
As for the penalty clause, this provides a form of punishment, such as a fine or forfeit if the contractor, for example, fails to fulfill the obligations of the contract.
Moses Nagamootoo, one of the lawyers, said that a contract without any penalty clause for the contractor in case he fails to carry out the outlined obligations, is “nothing but a joke.”
Another lawyer, who has practised Contract Law for a number of years, said, “The fact that Government failed to take into account the possibility of the contractor not living up to the agreed arrangements, points to the scope of the illegality that they plan to be involved in and as such the contract itself is born out of corrupt intentions.”
The lawyer emphasized that penalties are included in contracts to ensure that there is a binding commitment to the tasks being carried out by the contractor in a timely and efficient manner.
“So since that is absent, the contractor can take his sweet time. And so we see another contract with all the makings of a giveaway package. It has the corrupt style of the former President, Bharrat Jagdeo all over it.
“Agreements normally cite obligations and responsibilities of the contractor and the Dax agreement does not even follow this procedure.
“It does not outline specifically, the nature of the works to be completed and the extent of the damage done.
“Nothing in that regard is specific except the concessions. This just goes to show the disrespect this government has for the electorate, the people who entrusted them with the responsibility to manage wisely, their resources.
“But this represents a spit in their (electorate) faces,” the lawyer expressed.

AFC Leader, Khemraj Ramjattan, also expressed similar sentiments, He went further to state that once the APNU+AFC assumes office, the contract will be pulled from Mohamed.
Additionally, well known economist, Dr. Clive Thomas, on Saturday last lashed out at the architects of the agreement. He had said that the deal which allows Mohamed some exclusive shares in a state cable is not only disrespectful to the Guyanese people, but highly illegal.
He had said, too, that the crafters of the contract should be made to face the court.
On March 16, last, Cabinet Secretary, Dr. Roger Luncheon on behalf of the government, negotiated with and signed a special agreement with Dax Contracting Services Ltd.
Under the agreement, Dax will undertake the repair and maintain the fibre optic cable from Brazil.
This contract is for an initial 25 years with an option to renew it for a further 15 years. This gives Dax a total of 40 years of cable rights.
Government has also undertaken to provide Mohamed with the necessary support to receive and transmit data by way of the cable after granting the company an operating licence.
And for free, Mohamed will be able to use the Government-owned fibre optic cables and structures including, roads, the poles, access to repeater stations and other things.
Dax Contracting Services would also be provided with tax exemptions and incentives, including but not limited to tax holidays, remissions, tax waivers and duty free concessions on equipment, spares, tools  and vehicles.
The government insists that it will retain possession and use of most of the bandwidth, as agreed to between Dax and the government.
As the owner of parts of the cable, Mohamed can invite and sign with any company or entity to use them to transmit and receive data and information from any part of the world in the same way that today’s telephone companies operate.
To add insult to injury, the government has agreed to pay Dax for specific emergency maintenance.
In exchange for the operating licence, Mohamed will accept the risks involved in accepting and using the operating licence even before the telecommunications legislation is passed.
This arrangement will insulate the government from any legal challenge from the monopoly holder of the landline service, the Guyana Telephone and Telegraph (GT&T) Company. Should the telephone company pursue legal avenues, it would be Mohamed facing the fire.
This same contracting service owned by Mohamed, was one of the five contractors hired to lay the cable from Lethem to Georgetown.
When a Kaieteur News reporter contacted Mohamed, he told her, “Hey, hey listen. You can go and f**k youself.”
He hung up the phone immediately after.

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