Bond rental to Health Ministry … New GPC lied about secret $90M payments

Jan 19, 2013 News

“As a supplier, the NEW GPC agreed to provide the warehousing need as a non-fee service.”- Guyana Times, June 22, 2012

Former President Bharrat Jagdeo

New GPC, which was controversially selected to supply Government with billions of dollars in drugs, may have deliberately attempted to hide the fact that it collected almost $100M for renting storage space to the Ministry of Health.
As a matter of fact, the company which has admitted to close ties with former President Bharrat Jagdeo, last year insisted that it was providing warehousing services for free.
Last week, in shocking revelations, health officials testified before a special accounts committee of the National Assembly that between late 2007 and December 2012, New GPC was paid more than $90M to store drugs for Government.
The monies would have mainly come from USAID, a donor agency working with the Health Ministry.
This arrangement ended in mid-2012 but the government continued paying the $1.5M monthly until December.
The bond facility is in the compound of the former Sanata Textiles in Ruimveldt, now owned by Queens Atlantic.
The payments were in addition to the billions of dollars in contracts that New GPC would have had from government over the years.
Members of Parliament from the Opposition were perplexed and suspicious of the arrangements especially as there are questions now that New GPC may have also not delivered hundreds of millions in drugs in 2010.
Last year, speaking about the storage services it was providing, New GPC in its Guyana Times newspaper of June 22, while attempting to argue that it was doing Government a favour as a good corporate citizen, said that it was incurring enormous cost to provide the free warehousing facility to government.
“Presently, the NEW GPC incurs cost of more than Gy$150 million annually to provide free warehousing for the Ministry. Proper storage of medicines is critical.
The truth is that the Health Ministry and GPHC do not and have never had the warehouse capacity to store all the medicines they have in stock,” the Guyana Times report said.
New GPC went even further to hide the payments.
“We must recall that the NEW GPC, as one of the requirements for prequalification, demonstrated that it had the capacity to store greater than 90 per cent of the annual supply that the public sector requires.
As a supplier, the NEW GPC agreed to provide the warehousing need as a non-fee service.”
Yesterday, in his newspaper…the Guyana Times… New GPC’s principal, Dr. Ranjisinghi ‘Bobby’ Ramroop, again said that it was free storage that his company was providing to Government.
Government has since said it built a bond in Diamond.
Government has been fighting a battle to defend how New GPC managed to become the main supplier of drugs.
In early 2010, the Cabinet under the Jagdeo administration, decided that New GPC would be the sole supplier of drugs.
In 2011, in controversial circumstances also, a number of companies were pre-qualified to become suppliers, including New GPC.
Drug purchases have accounted for a large chunk of the Ministry of Health with New GPC in 2011 being awarded almost 80 per cent of the $13B expended.
The Opposition parties in the National Assembly have expressed alarm over the developments with members of its Public Accounts Committee arm clashing last week during examinations of the 2010 Auditor General report.
Hotly debated also was how the Ministry did not follow competitive bidding processes and as such allowed $1.252B in contracts to be granted to New GPC to deliver drugs in 2010.
In recent days, there have been increasing calls for the drugs purchases to be investigated fully.