Two contractors still to repay almost $200M to Govt.

Nov 11, 2018 News

“I am sure they will pay it off” – Minister Patterson

Minister of Public Infrastructure, David Patterson

Two contracting firms—Courtney Benn Contracting Services and Compustruct Engineering Incorporated—are still to repay almost $200M to the Ministry of Public Infrastructure and there is no fixed installment framework or time period within which the money has to be repaid.
However, Minister of Public Infrastructure, David Patterson is certain that the full sum owed by both contractors will be repaid to government in due time. He said this to Kaieteur News yesterday.
Courtney Benn Contracting Services and Compustruct Engineering Incorporated were red-flagged by the Audit Office since 2015 for receiving millions of dollars in overpayments in regard to the East Coast Demerara Highway Improvement project.
The East Coast Demerara road project, which started in 2011, spanned from Better Hope to Belfield, with the civil works split into seven lots. While the project was at a standstill for years, more than $2.7B was expanded even before it was near completion.
Courtney Benn Contracting Service was assigned to do work on Lot Three − from La Bonne Intention (LBI) to Beterverwagting, with the contract sum being $349M. Compustruct, on the other hand, was assigned Lot Four, ranging from Beterverwagting to Triumph. The cost for works on this lot was $322.3million.
The issues with these two sections were highlighted once again in the Audit Office’s 2017 report.
It was reported that a physical verification carried out in 2016 on Lot 3 revealed that the works were incomplete. There were changes/variations to the original scope of works. In addition, Auditors observed that Benn received three advance payments totalling $264.123M, representing 76 percent of the contract sum, while the contract only allows for an advance payment of 50 percent.”
Auditors said that this is a breach of contract where the contractor was paid advances greater than that which is allowed for under the contract.
Further, the valuation of the works completed was $157.663M. “However, the actual payments made to the contractor totalled $278.346M. Therefore, the contractor received excess payments totalling $120.683M.”
The Auditor General indicated that the contractor has since repaid $20.683M with the balance of $100M still to be recovered.
Ministry of Public Infrastructure told the Audit Office that it wrote Benn many times on the outstanding sum of $100M. “We wrote on three occasions in 2018.”
Speaking about the sum owed by Compustruct Engineering Incorporated, the Audit Office wrote, “The contractor received three advance payments of $209.603M, representing 65 percent of the contract sum, while the contract only allows for an advance payment of 50 percent.
“This is a breach of contract where the contractor was paid advances greater than that which is allowed for under the contract. Further, the contractor submitted only one Advance Bond for the first advance payment of $174.504M.”
It was also noted that the Bond expired since 2014 and no Bond was seen for the second advance payment issued to the contractor.
Also, auditors said that the valuation of the works completed was $76.954M; however, the actual payments made to the contractor amounted to $209.603M.
“Therefore, the contractor received excess payments totalling $132.649M. The contractor has since repaid the sum of $20.649M, leaving the balance of $112M still to be recovered.”
Ministry of Public Infrastructure said that the repaid $20.649M “and the Ministry had written the contractor many times on the outstanding sum of $112M.”
In both instances, the Audit Office recommended that the Ministry continue to pursue the recovery of the overpayment.
When Kaieteur News spoke to Minister Patterson yesterday, he said that he was not aware of any payment made yet for the year but noted that the other payments were made at the end of year 2016 and 2017.
Therefore, he said, he is expecting more payments this year end.
The Minister said, “I am sure they will pay and this is in accordance with what the Auditor General recommended. He said that they should repay the sum and that is what they are doing.”
Minister Patterson could not have provided a timeframe during which the money will be fully repaid.
Meanwhile, both companies continue to receive government contracts.

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