OP now probing Surendra over US$4M pumps

Sep 11, 2014 News

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 – injunction bars Guyana from releasing outstanding monies

Surendra Engineering Company Limited (SECL), the Indian firm that is accused of submitting a fake bank guarantee to Government for the Turkeyen specialty hospital, is headed for even more trouble.
Not only has Government moved to terminate that US$18M contract, filing a court case and involving the police, but an active assessment is also being conducted into another controversial deal involving the supply of 14 drainage pumps to the tune of US$4M.
That contract was awarded since 2011, shortly before former President Bharrat Jagdeo ended his second term.
There have not been any straight answers from the Ministry of Agriculture, and by extension the administration, whether all the pumps are here. The eight fixed and six mobile pumps are crucial in fighting flooding in especially low-lying farming areas across the coastlands.
Yesterday, Minister of Legal Affairs, Attorney General, Anil Nandlall, said that both the Ministry of Agriculture and the Office of the President are reviewing the pump contract with Government not “oblivious” to the fact that there is another deal. However, the official declined to go into details, saying it was too early.
The admission by Nandlall of another probe into Surendra’s dealings in Guyana would all but shut the door on that company regarding state contracts in Guyana.
Its Managing Director, Brijen Parikh, has reportedly skipped the country, leaving one sub-contractor, BK International, out-of-pocket for over $400M in outstanding monies for the specialty hospital project.
Government has been facing fire for Surendra after that company was first granted the pump contract, but it was discovered that it had no experience in that area.
Government then turned around and gave its blessings for the US$18M specialty hospital to Surendra. Again, there was no history of the company building hospitals.
One Indian company, Fedders Lloyd Corporation Limited, had objected, filing a complaint in India’s Parliament and with India’s EX-IM  Bank.
Both Nandlall and Health Minister, Dr. Bheri Ramsaran, during a press conference yesterday, defended the award of the contract saying it was above board. A number of Health Ministry officials were part of the evaluating team for the contract which was also overlooked by the Indian EX-IM Bank.

Regarding the decision to terminate the hospital contract, the Ministers said that the troubles all started when Surendra’s security bond, a requirement for state contracts, expired in March.
The bond, which is like a bank guarantee, is necessary in case something goes wrong, like shoddy work, and Government has to recoup monies.
Initially, when the contract was awarded in 2012, Surendra submitted a bond from Caricom Insurance, a local company. However, the company refused to renew the bond when it expired in March. Surendra then submitted a bond purportedly from Worldwide Banker Limited, a company from Trinidad.
According to Nandlall, the bond documents aroused suspicions because it bore a notary seal, something not normal on bonds.
Surendra when questioned then submitted another bond, this time from the Central Bank of Trinidad.
The Health Ministry said that in total, up to March of this year, it had paid up to US$4.2M to Surendra, with US$3.6M being mobilization fees.
Checks were made with the Central Bank in Trinidad which dropped the bombshell…the bond was not from them.
The company was called in for meetings and as questions were asked, Surendra ceased work on the Turkeyen site somewhere in mid-June.
The Government official made it clear that Government has lost all confidence in Surendra and the fact that complaints were coming in that it owed sub-contractors, including BK International, only made matters worse.
Surendra itself seemed to have been cutting corners, resisting attempts to have site insurance in place.
Already, the Indian High Commission and the EX-IM Bank have been apprised of the situation.
Government at the moment is also unclear on whether it lost monies, as an on-the-ground assessment is needed of the work that has been done.  It is unlikely, too, that any work will be done soon as talks will have to be held between the Indian Government and Guyana on the way forward.
Government said that there is nothing blocking Fedders Lloyd, the lowest bidder in 2012, from putting in a tender if the contract is up for bids again.
With regard to the court case, Nandlall said that Guyana can file a court case here and any favorable judgment can then be effected in the Commonwealth courts. India, like Guyana, is part of the Commonwealth countries. As such, Surendra, which does not appear to have many assets in Guyana, can be touched in India.

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