Amaila Falls Road Project…Gov’t wants court to force payment of US$1.5M bond

Jan 05, 2013 News

The government wants the court to force insurance company Hand in Hand to pay US$1.5 million after it fired Makeshwar “Fip” Motilall from the Amaila Falls road project.
The former Bharrat Jagdeo administration had handed Motilall a US$15.4 million to build the road leading to Amaila Falls where the government plans to construct a mega hydro power plant.
However, with Motilall unable to get the job done, he was fired last January, a month after the new Donald Ramotar Government took office.
A performance bond was posted by Hand in Hand Insurance Company to the value of 10 per cent of the contract, or US$1.5. With Motilall failing to perform and out of the way, the government sought to get the US$1.5 million, but to no avail.
“We are dealing with that in the courts,” Minister of Transport and Hydraulics Robeson Benn said yesterday.
He said that there was a “valid” performance bond and there were “issues with performance on the contract” and so the government is moving to secure the bond.
Sources had indicated that Motilall’s performance bond expired ever since July 2011.
That bond was negotiated and brought into force when the contract with Motilall was signed in January 2010, with duration of eight months. But Motilall was never able to meet that deadline and had several extensions until the plug was pulled in January 2011.
When the validity of that bond expired in July 2011, Motilall was expected to secure another, but he did not and that was used to fire him.
In an agreement he had signed, it was agreed that “failure of Synergy Holdings Inc to present to the Government of Guyana a valid performance bond from an acceptable institution to the value of 10 per cent of the contract price on or before January 10, 2012 will result in the immediate termination of the contract.”
A claim by the government did not mean that the insurance company would automatically pay, but that it would have to carry out its investigations, as is done in all cases of persons making a claim.
Motilall, following the announcement of the termination of the contract with Government, had claimed that he was owed in excess of US$1M.
Winston Brassington, the Head of the National Industrial and Commercial Investments Limited (NICIL), who had played an integral role in the project had said that the government received what it paid for.
“…Government has received value for money based on the work completed,” he had said. Brassington had said that the government retained 10 per cent of all valuations.”
He said, too, “The Agreement for Completion to the contract with Synergy, executed in December 2011, provided certain additional safeguards, including assigning the rights to the equipment to Government.”
Hand-in-Hand, in an official announcement following the termination of the contract, had stated that “the position of an insurance company with regard to any insurance policy or claim is strictly confidential and would not be disclosed by the insurance company unless required by law or legal process.”
The insurance company had also stated that “If a claim is made under a performance bond, it goes through our claims verification and investigation process…This process is performed in respect of each and every claim regardless of size.”
Large claims are submitted to the Board of Directors of Hand-in Hand for its consideration.

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