BK Int’l to get final payment in $1B Haags Bosch ‘sweetheart’ deal

Feb 15, 2017 News

The government is expected to make the final payment of the $1.1B settlement to contractor, BK International, over the operations of the Haags Bosch Landfill site, aback of Eccles, East Bank Demerara.
BK International, whose management of the Haags Bosch Landfill was terminated by the former government, was last year, awarded an out-of-court settlement of $1.1 Billion as outstanding payment for the construction and the daily management of the Eccles site.
Permanent Secretary in the Ministry of Communities, Emil McGarrell, appearing before the Public Accounts Committee (PAC) on Monday, clarified that $849 Million of the settlement has since been paid to the contractor.
McGarrell explained that the outstanding amount is expected to be paid ‘some time this month.’ The payment has been budgeted for in the 2017 Budget, McGarrell said.
He explained that in the disbursement of the $849 Million, two payments were made to the contractor. The first payment was made on July 12, 2016 and the second on September 10, 2016. He added that the first payment was covered under a budgetary allocation and the second, was made by virtue of a supplementary budget.
The previous administration terminated BK International’s contract for the construction and operations of the landfill on February 27, 2015, on the grounds that the company had missed deadlines and committed other breaches.
BK International through its lawyer, responded by filing a lawsuit on March 13, 2015, asking Chief Justice (Ag) Ian Chang, to overturn the decision to terminate the contract.
The contractor also claimed outstanding payments for one-and-a-half-year, for the construction and daily management of the site.
Chang, in November 2015, ruled in favour of BK International. Subsequently an out-of-court settlement was worked out between the contractor and the current government through the Ministry of Legal Affairs.
The Government had said that it had settled with BK International, on the ground that it was crucial for moving forward with the development of the Haags Bosch Landfill site. The contract for the management and operation of the landfill was later awarded to Puran Brothers’ Disposal Incorporated.
The close to US$20 Million Inter-American Development Bank (IDB) funded Haags Bosch landfill programme catered for the closing of the outdated and inefficient Le Repentir solid waste disposal site in the centre of Georgetown and replacing it with a new, privately-operated sanitary landfill intended to serve both the city and surrounding East Bank Demerara neighborhoods.
The programme also includes the preparation of a master plan for waste management, as well as training for public and private entities which operate in the sector.
Questions were raised about the settlement since there was no trial, and no evidence was given. Many believed that the settlement the coalition government made with BK International in relation to the Haags Bosch dumpsite was not straightforward as the current government made it out to be, and that there was something sinister about this entire deal.
The opposition had said that the government had a strong case against BK, so there was no need to settle.

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