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Govt. sues for $186M after contractors failed to deliver
Attorney General Anil Nandlall is seeking the intervention of the courts to get a whopping $186M from three companies which government is seeking to enforce Performance Bond Guarantees and Advanced Performance Guarantees which were put up by these companies in respect of different infrastructural contracts.
On May 7, last, Nandlall filed three actions on behalf of the state, claiming a total of $186.1 million against Citizens Bank Guyana Inc., Caricom General Insurance Company Inc., and North American Fire and General Insurance Company.
Attorney General
Anil Nandlall
According to Nandlall, the “Bonds and Guarantees” were put up by these companies to assure and guarantee the performance of contractors under various contracts. Government, Nandlall said, has contended that these contractors have failed to discharge their contractual obligations. In these cases, the government is seeking to “cash in” these Bonds and Guarantees.
It was noted that on August 18, 2005, Citizens Bank Guyana executed a Performance Bond/Guarantee in favour of the Government of Guyana at the request of Golden Star Contracting Services Company Ltd. pursuant to a contract between the Government and the said company for the Rehabilitation of Access Road to Parika Stelling.
Further, in January 2008, Nandlall said that Government terminated the said contract owing to the company’s repeated failures to correct defects within the timeframe specified by the engineer.
It was noted that in April of the same year the Ministry of Public Works in accordance with the terms and conditions of the contract wrote to Citizens Bank making a first demand on the Performance Bond for the amount of $38,391,018.
Nandlall said that despite the claim, Citizens Bank failed, refused and neglected to effect payment of the said sum.
In September of 2011, Caricom General Insurance Company Inc had executed a Performance Bond and Advance Guarantee in favour of the Government of Guyana at the request of Maurice Balgobin.
Balgobin was contracted by the government for the Rehabilitation and Re-construction of Kaburi Village Road, Region Seven.
On September 24, 2012, the government terminated the said contract owing to the fact that the contractor failed to substantially complete the works even after an extension of 260 days was granted.
It was explained that on December 6, 2012, the Ministry of Public Works in accordance with the terms and conditions of the contract wrote to Caricom General Insurance making a first demand on the Performance Bond and Advance Guarantee in the amount of $4,986,375 and G$1,892,009.
Nandlall said that despite the claim, Caricom General Insurance Company has to date failed, refused and neglected to effect payment of the said sum.
The third company, North American Fire and General Insurance had executed Performance Bonds in favour of the Government of Guyana at the request of Bovell Construction Services.
Bovell Construction Services was contracted by government for the Amaila Falls Road and Transmission Line Clearing Project Section Six Issano Junction to Kuribrong River.
On December 2012, Government terminated the said contract owing to the fact that the contractor removed equipment from the site which resulted in a stoppage of work constituting a fundamental breach of contract in accordance with the general conditions of the contracts.
Nandlall said further that last year, the Ministry of Public Works wrote to North American Fire and General Insurance making a first demand on the performance bonds for $56,345,060 and $84,517,590.
North American Fire and General Insurance Co. Ltd has to date failed, refused and neglected to effect payment of the said sum.
The actions were filed in the Commercial Division of the High Court and are set to be heard on June 18, 2014.
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