Waste disposal companies fume over M&CC’s termination of contracts

Aug 10, 2017 News

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• call on President Granger to intervene

Millions have been invested and monies will have to be recouped. It was with this in mind that the operators of Puran Brothers Inc. and Cevon’s Waste Management Inc. have over the years continued  render their waste disposal services to the Mayor and Councillors of the city of Georgetown [M&CC].

But representatives of the two entities are convinced that senior officials of the municipality are bent on breaching an agreement that would see the waste disposal contractors delivering their services until 2020.

The two entities are currently engaged in strike action in retaliation to protracted non-payment by the municipality. The accumulative amount owed since 2015 to the waste disposal companies is over $300 million.

But according to officials of the companies, instead of fulfilling its payment obligation, the municipality has issued them with letters of termination. The waste disposal contractors are not prepared to accept this move and have written to President David Granger seeking his intervention since their livelihood, and that of over 90 employees, are dependent on a resolution.

“Creditors have stopped our credit, right now we have cheques turning back…if you go to a bank and try to cash one of our cheques it’s very embarrassing. We are so indebted to the bank that we keep refinancing, we have sought all kinds of financing,” said General Manager, Kaleshwar Puran, of his company Puran Brothers Inc.

Speaking to this publication yesterday too, Chief Executive Officer [CEO] of Cevon’s Waste Management Inc., Mr. Morse Archer, emphasised that the hand dealt to both his company and that of Puran Brothers Inc. is simply unfair. He recalled that the companies worked especially hard during 2015 following the elections and during 2016 for the Jubilee celebration.

“A lot of work we had to be doing because during that period of time [2015 and 2016] the work peaked,” recalled Archer, who pointed out that while the municipality was paid small sums, “we were not receiving the full amount owed and that is how the money started building-up.”

Frustrated at times, Archer said that there were several occasions that the waste disposal companies communicated plans to the municipality to engage strike action. But according to Archer, “They would appeal to us because of the jubilee celebration and that kind of thing…during 2016 they made all kinds of written and verbal promises to us, but they have been breaking all their promises,” said Archer.

“In 2017, the thing really started to get overbearing.”

Archer, who spoke on behalf of both waste disposal companies yesterday, said that given the continued non-payment, a decision was taken to start strike action since earlier this year. Having learnt of this decision, Archer said that both waste disposal companies were summoned by the municipality to discuss the payment issue. A meeting to discuss the situation was held around March 24, 2017.  “They told us that they wanted to put on ice the 2015 and 2016 payment but we told them ‘no way we could agree to that’ because we would have spent monies, we would have invested so much money and we cannot afford to park that money. There was a back and forth on that,” Archer disclosed.

At the very meeting, Archer said that a decision was made, and presented in writing too, for the payment of monies owed for 2017.

Several meetings which the contractors were engaged were attended by key officials including: the Mayor, the Town Clerk, the City Treasurer and Councillor Oscar Clarke.

“They told us that they will pay us at the end of March for January, and at the end of April they will pay for February and at the end of May they will pay for March and so on…we agreed with the 2017 portion of the discussion but we were yet to agree on the 2015 and 2016 payment,” recalled Archer.

But according to Archer, at the end of March when the initial 2017 payment was supposed to have been made, no payment was made available. “We had to call them and that kind of thing and then eventually they paid us,” Archer recounted. But the municipality had still not honoured its obligation since it not only paid less than was owed, but when both companies sought to en-cash their cheques they bounced.  This would continue for the following months with payment continually being further delayed.

When confronted with the concerns of the companies, officials of the municipality said that limited funding was the cause. The situation continued into the month of July. But when the companies turned up for payment, Archer said that they were informed that the municipality was not in a position to pay, since it had to pay its senior staff travelling allowances. “Things really fell apart at this point. They were the ones that made agreements with us and we told them that they just can’t keep breaching their agreement, and added to this they were still not talking about the 2015 and 2016 payment,” Archer noted.

In light of the continued broken promises and breached agreements, Archer said that both companies decided on July 7, 2017 to withdraw their services. But instead of rushing to make amends, Archer said “we saw in the media, they were saying that in order for us to be paid, we have to come back on the job and then they would talk to us about payment.” Moreover, the companies’ withdrawal lasted until July 12, 2017.  “We decided to go back because at the end of the day we want to be paid…so if that was the basis for us to at least talk about this we went back,” related Archer. But municipal officials from all indications were not prepared to appease the situation.

As a result, the companies have since moved to again withdraw their services as of August 6, 2017. Archer disclosed that although another promise was made, it was in no way satisfactory, thus the strike action has remained in force. But according to the Cevon’s CEO, officials of the municipality have been pedalling inaccuracies in the media which suggest that the companies have demanded the total sum owed or nothing at all before they resume operation. “That $300 million was never ever mentioned when they met with us…” said Archer as he recalled that following on the heels of such disclosure both companies were in receipt of letters from the municipality stating that “our services have been terminated, but the thing is, we have a contract with them up to 2020.”

The Georgetown municipality in a statement issued yesterday by Town Clerk, Royston King, highlighted that the action of the contractors was “influenced by a regrettable delay in payment to their accounts, by Council, and their displeasure with a proposal by the city to settle its accounts with them over a certain period.”  The period in question was not stipulated.

According to the municipal statement, payment to the major contractors has been costing the Council $45M monthly, thus leaving little for other areas of spending.

“It is important to mention that both Puran Brothers and Cevon’s Waste Management started out very small, with only one truck. Over the years, the Council committed itself to working with them. As a result, our partners (contractors) were able to grow into large corporations with substantial fleets of vehicles and allied equipment. During that same period, the Council neglected to invest in its own Solid Waste Management Department. It now lacks the trucks, equipment and mechanics to adequately manage the city’s waste,” King admitted.

He, however, revealed that the municipality has since put in place contingency measures to manage, in an environmental friendly manner, the city’s waste.

Meanwhile, the Georgetown Chamber of Commerce and Industry [GCCI] in a statement on the matter, noted that the move by the municipality to treat the withdrawal of the contractors as a termination of contractor is unwarranted. GCCI has classified the municipality’s action as “not acting in good faith.”

“This is on the backdrop that the Chamber recognises that non-payment or untimely payments to these contractors for acceptable services rendered to the M&CC is a fundamental breach of contract, yet these contractors have continued to work with the M&CC over the past few years in hopes that the issue could have been resolved amicably,” the GCCI highlighted.

The GCCI is urging that the municipality meets with the aggrieved companies to establish a verifiable and mutual solution.

Added to this, the GCCI said that it is also calling on Government to intervene in this matter so as to ensure that waste collection services in the city return to normality and good faith prevails between the municipality and the contractors.

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