Specialty Hospital contract will be challenged in High court - PPP

Specialty Hospital contract will be challenged in High court — PPP

Dec 03, 2015 News

…should Gov’t push works without re-tendering
Former Attorney General, Anil Nandlall, has signaled his party’s intention to challenge the Government’s selection of Fedders Lloyd to complete the specialty hospital project, in the High Court, on the grounds of a breach of the Procurement Act.
This was communicated during a press conference at the People’s Progressive Party (PPP), Freedom House, yesterday. Nandlall, who is a part of the Parliamentary Constitution Reform Committee, made it clear that the way Government intends to proceed directly, contradicts the Procurement Act of 2003.

From left: Former Attorney General Anil Nandlall with PPP Chief Whip, Gail Teixeira. Nandlall can be seen reading an excerpt of the APNU+AFC manifesto

A perusal of the procurement Act reveals, “This Act applies to all procurement by procuring entities, except as otherwise provided in subsection two.”
Subsection two goes on to state that “subject to the provisions of subsection three, this Act does not apply to procurement involving national defense or national security.”
“It is corrupt, wrong and unlawful to handpick Fedders Lloyd and award this contract,” Nandlall said. “This company was disqualified when the project was first tendered and this company has a close relationship, apparent or real, to Vice President Khemraj Ramjattan (Minister of Public Security).”
Nandlall pointed out that transparency and accountability cited in the Procurement Act mandates the project be retendered. He observed that while Fedders Lloyd may be the most experienced company and be able to succeed, the focal point is that the due process was not followed.
“After six months in office, (one of) the first major projects is the specialty hospital. And they have tossed the procurement law out the window,” Nandlall vehemently declared. He also brandished a copy of the A Partnership for National Unity/Alliance for Change (APNU+AFC) elections manifesto.
He made it clear that should the Government insist on proceeding with the project without retendering, then the party would challenge the government in the High Court and “bring an abrupt halt” to the process.
Nandlall noted that at present, a Memorandum of Understanding (MoU) was signed between the Ministry of Finance and Fedders Lloyd. That MoU contained provisions for work to begin immediately. He expressed his belief that the Indian Exim Bank would not release the funds on the terms of the MoU and thus work would not be able to start.
“Though the Minister seems to have convinced himself that he can begin work based upon the MoU, I don’t think this is possible,” he said. “There are stipulations (in the line of credit) in relation to public procurement, suitability of contractor, nationality and contract. So I think the Minister misspoke.”
In light of this, Nandlall reasoned that while the MoU was signed, it did not constitute a binding document. Should the government move towards signing a contract, he reiterated that the PPP would take action.
Minister of Finance, Winston Jordan, had announced that a Memorandum of Understanding (MoU), which will see works restarting on the construction of the Specialty Hospital, was signed between him and Fedders Lloyd’s Country Representative, Ajay Jha.
According to the Finance Ministry, Fedders Lloyd will review the works already started; conclude a design of the Hospital that is acceptable to the government and commit to fully equip the facility on completion of its construction. The company had also undertaken to commence work on the facility immediately.
However, the decision by the Government to bypass the tender process has sparked an outcry from the opposition and other stakeholders. It has also divided the opinion of many.
Work on the Specialty Hospital was initially halted after allegations of impropriety and fraud were leveled against the contractor, Surendra Engineering Corporation Limited (SECL), which won the bid for its construction in 2012.
It was agreed that the company would provide services related to designing, building, equipping, testing, delivering, installing and commissioning of facilities for the facility at Turkeyen, East Coast Demerara. The cost of the contract was over US$18M.
Following the termination of the contract, the then PPP Government moved to the Commercial Division of the High Court and sued Surendra. Government was claiming damages in excess of $100M, as well as special damages amounting to over US$4M.
Surendra had by then, flown the coop and had vacated its local office in Berbice when court officials visited to serve the writ, so when the matter was called twice, on January 21 and again on January 23, and no one appeared on behalf of the company, the court awarded judgment in favour of the Government of Guyana.
Government has never collected the over US$4M judgment.