Specialty Hospital woes... Surendra Engineering gives Govt bogus performance bond

Specialty Hospital woes… Surendra Engineering gives Govt bogus performance bond

Sep 11, 2014 News

…leaves Guyanese taxpayers with unsecured US$4M – Dr Luncheon

Surrendra Engineering Company Limited committed a criminal act; in the process leaving Guyana with an unsecured US$4M since there is no bond in place as a guarantee.
This was confirmed by Head of the Presidential Secretariat, Dr. Roger Luncheon, who yesterday said that the company’s problems came mainly through delays in timelines, an inability to properly account for public funds as well as issuing a forged bond document purportedly emanating from Trinidad and Tobago with the blessings of the Trinidad Central Bank.
This document turned out to be forged, according to Dr. Luncheon, who sought to credit the local consultants VIKAB Engineering Consultants with bringing the skullduggery to light.
According to Dr. Luncheon, the issues related to Surendra have been engaging the Cabinet Council of Ministers for several weeks now.
Surendra Engineering Company Limited was contracted to design and build the Government’s Specialty Hospital at Turkeyen, East Coast Demerara.
That hospital was to be constructed at a cost of US$18M. This was part of the wider goal which would have seen some US$150M being used to build the infrastructure as well as outfit and install the necessary equipment.
Works has ceased at the worksite and according to Dr. Luncheon leading up to this stoppage was a number of differences between the Ministry Health which was effectively the client and Surendra Engineering.
He said that there were numerous engagements between the stakeholders but to no avail, eventually leading to the decision to terminate the contract.
According to Dr. Luncheon, what ultimately led to the decision was when the Central Bank of Trinidad and Tobago confirmed that Surendra Engineering had issued to the Guyana Government a forged document. He was making reference to a bond that needed to be in place.
Surendra had in force a legitimate bond that was issued by CARICOM Insurance Company but that bond expired in March. The company subsequently failed to find a legally binding replacement.
The Trinidad Central Bank, he said, distanced itself from anything to do with the second Bond submitted by Surendra Engineering to the Guyana Government.
He said that Government has acted condignly and has since informed Surendra of its intentions to terminate the contract and to pursue this criminal act and to also recover public funds to which Surendra had been provided and for which it was not accounting for.
He did emphasise that despite the contract being pulled from Surendra Engineering, Cabinet is committed to having a Specialty Hospital built, “notwithstanding this unfortunate episode.”
While he was unable to speak specifically to applying liquated damages against Surendra Engineering, Dr. Luncheon did point out that such clauses are standard in such contracts.
He said, too, that while supervisory firms have in the past contributed to similar ‘sad outcomes,’ Dr. Luncheon was loud in praise of VIKAB Engineering Consultants. He said that the fraud was uncovered in large part as a result of the diligence of the consultants.
He said that it was a good thing that the government was able to intervene when its exposure was only US$4M of the entire US$150M project.
Asked about possible blacklisting of Surendra Engineering, in light of the disclosures, Dr. Luncheon did point out that bidding documents require that potential contractors outline any litigation against them which would lead to its disqualification from future projects.
He said, too, that as it relates to the other contract involving Surrendra Engineering, one of which is for the supply of a number of pumps, Dr. Luncheon said that at minimum, there would need to be heightened monitoring of the project.
Meanwhile, the Alliance For Change yesterday came out in full support of the Government’s decision to pull the contract for the construction of the Specialty Hospital.
The party, which has from the inception objected to Surendra Engineering, said that it is ready to support efforts to recover monies already paid over to the Indian company.
“Guyana cannot afford to lose this money…What has happened in this case points clearly to the need for a Public Procurement Commission to better regulate and oversee the award of contracts.”
According to the AFC, it is good that the government has finally woken up. The party has once again called for the government to become fully compliant with the Constitution and the Laws of Guyana.

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