ANYONE CAN TENDER FOR A CONTRACT

Jun 03, 2010 Features / Columnists, Peeping Tom

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If Glenn Lall, the publisher of this newspaper, had tendered lower than Synergy Holdings Inc., for the contract to build the access road to the proposed Amaila Falls Hydroelectric Plant, would he have been accepted as the successful bidder? Would the evaluators have recommended him for the contract and would Cabinet have issued a no-objection for him to be awarded the contract to build the road?
Or would someone have questioned whether Glenn Lall has the necessary experience to build such a road? Would the argument not have been made that this is not a small bridge across a trench that is being constructed; this is not a small school that is being built; this is not a culvert that is being laid.
What is being built is a major roadway to allow for the movement of heavy machinery and equipment involved in the construction of a hydroelectric project. What is involved is not a contract for a few million dollars but for a few thousands of millions of dollars or more specifically for three billion dollars.
You simply do not award a contract of that magnitude unless you are satisfied that the contractor is someone who has had considerable experience in such works and a track-record of undertaking projects of this magnitude.
You would also, before approving any recommendation, want to check on the credentials of this person and verify that this person has an established construction business and is not simply operating out of a small shop. In short, you would wish to undertake a due diligence of all short-listed contractors.
After all, we are dealing with three billion dollars, and while a performance bond will reduce the financial exposure of the State, this alone is no safeguard that the works will be completed.
If the works are not completed and a new contractor has to be hired, then it means that the contract has to be re-tendered and the delays will have financial and economic consequences, including consequences for the start-up of the hydroelectric facility.
No government wants to find itself in a situation whereby a major road project cannot be completed. Questions will be asked about the evaluation of the expertise of the contractor chosen. The government will be subject to heavy criticism.
The PPP knows this all too well. When it got into power it had a great deal of problems as regards the work being done on two major road contracts.  And throughout its terms in office, questions have been raised at various stages about certain contracts and the quality of work done. Just this year, this newspaper called attention to controversies involving public works.
It is therefore naïve for anyone to seek refuge in the idea that the performance bonds which contractors are required to lodge, insulate the government against financial exposure.
CLICO’s statutory reserves and the restrictions on investments outside of Guyana were also supposed to guarantee the interests of policyholders.
We all know now, and quite unfortunately, that these restrictions did not prevent the company from moving large sums of money out of the country, forcing the collapse of the institution.
It is easy for someone to say that the performance bonds reduce the country’s financial exposure, and that supervision will ensure that things are done according to plan.
This is what the Guyanese people are being asked to take comfort in. Yet, one top government official has already announced that the project is behind the eight-ball. Would adequate supervision allow for the catch-up?
If the government is serious about good governance, if they are serious about Norway releasing the funds so that equity can be bought into the hydroelectric project, they should do a couple of things.
The first is that they should lay before the Economic Services Commission of the National Assembly, the report of the team of persons that evaluated this project.
Secondly, they should indicate whether as part of this assessment, due diligence was done on the firm awarded the contract. Since it is being contended that the contractor built private roads in the United States, then a listing of the roads built should be made public so that it can be verified.
Thirdly, Cabinet should explain the basis of its no-objection to the project. No one is asking the government to undertake technical assessments, but simply to explain the basis upon which it gave its no-objection to the award of the contract.
Cabinet obviously had to have been advised about the technical aspects of the road project before making such a decision and therefore it should lay before the National Assembly the basis of its no-objection.
These disclosures will go a long way to removing the doubts about the award of this road contract.
It will also provide some comfort to the Norwegians, whose agreement with Guyana is premised on the transparent use of funds provided by that country. Since part of those funds, we are told, will be directed towards buying equity into the hydroelectric project, and since the sponsor of the project says that the government’s contribution to this equity is the funding of the road project, then it means that the funds from Norway will go towards the road project.
This is all the more reason why the Norwegians should take an interest in ensuring the proper uses of those funds so as to make certain that their monies are transparently administered.
( To be continued)

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