SUNDAY GUYANA SADDLED WITH $$$MILLIONS IN PRE-CONTRACT COSTS FOR NEW LICENCE GRANTED DAYS BEFORE ELECTIONS

Apr 21, 2019 My Column

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Thirteen days before the 2015 General and Regional Elections were held, the Donald Ramotar administration granted a Petroleum Licence to ExxonMobil and other oil majors to operate on the Kaieteur Block offshore Guyana. But the contract that was signed leaves Guyana saddled with $31.4M in pre-contract costs.
The Production Sharing Agreement (PSA) does not give any details on how this sum was arrived at. It only states, “The sum of US$150,000 (is) in respect of all costs incurred by Contractor prior to the Effective Date.”
According to Ratio’s website: https://www.ratiopetroleum.com/en/projects/guyana/, Exxon holds a 35 percent interest in the Kaieteur Block, which totals approximately 13,535 sq. kms. It is also the lead operator.
Holding 25 percent of the rights is Ratio Guyana limited which was renamed Cataleya Energy Limited. It should be noted that Ratio Guyana Limited represents a joint venture partnership between ExxonMobil subsidiary Esso Exploration and Production Guyana Limited (EEPGL) and Cataleya.
Cataleya on its own, holds 25% of the petroleum rights in the Block while Hess holds 15%.
The Kaieteur Block is particularly significant since it is adjacent to the Stabroek Block, where the Liza discovery was made by ExxonMobil in 2015. Liza was the first oil discovery in Guyana and 11 additional discoveries have since been made in the block area.
To date, the total proven reserves in the block amount to more than five billion barrels of oil.
Speaking with Kaieteur News briefly last night, Esso’s Head of Public and Government Affairs, Deedra Moe, confirmed that an environmental baseline survey is being pursued on the Kaieteur Block to get a sense of the current conditions. She said that this has to be done before planning for future drilling.
Further, Moe said that this survey is in keeping with the fact that the company has work commitments on all of its blocks. “And we make sure we’re fulfilling those commitments,” added the official.
GIVEAWAYS
The Kaieteur Block operators were also able to capture very favourable terms in its contract that it signed with the Ramotar administration.
Exxon and its partners enjoy the right to use as much production as may be needed in its Petroleum Operations in the contract area and also for transportation and terminal systems. All quantities of any discovered oil so used or lost shall be excluded from any calculations of entitlement.
The Contractor also enjoys the right to send abroad, via an export point chosen, all petroleum to which it is entitled to free of any duty, tax, or other financial impost and to receive and retain abroad, all proceeds from the sale of such petroleum.
The Kaieteur Block operators were able to secure in the PSA, provisions that allow it to be free of paying import duties on all equipment and supplies for operations. And these can all be freely exported when the operators are ready without paying any duties.
As it relates to taxation, the Kaieteur Block PSA says that the contractor, its shareholders, members, partners, or affiliated companies are subjected to no tax payments, save and except for income and corporate tax. They are also exempted from the Property Tax Act.

US$150M CJIA PROJECT…RENOVATED AIRPORT TERMINAL CAN BE BUILT FOR US$5M– CONTRACTORS
When the Timehri airport project was announced back in late 2011, there was anger after Guyana learnt of it through the Jamaica newspapers.
One year later, that US$150M cost though initially rejected as too high, when compared to airports around the region, was accepted as a done deal.
Guyana then resigned itself to the fact that there was little it could do as the Chinese contractor, China Harbour Engineering Company (CHEC), had started work.
At the very least Guyana was getting something that looked good on paper.
The project itself was highly inflated, promising an entirely new terminal building, eight passenger bridges, energy saving roofs, escalators and elevators.
Today, reality has stepped in.
Six years after the sod was turned in March 2013, by the previous administration of the People’s Progressive Party/Civic (PPP/C), there is not a new terminal to house both departure and arrival areas.
Rather, there is a smaller building and it is only accommodating arriving passengers. The old terminal has not been torn down. Rather, it has been gutted and reused at the departure area.
Already inflated and with little or no explanations from Government where the money went, a number of contractors are now coming out, insisting that the kind of work done at the terminal building cannot be more than US$5M.
“A few walls were changed at the old terminal building along with a few zinc sheets. Then you have a building that is only accommodating arrivals. It can be built for not more than US$5M,” a contractor that has built several of the city’s properties insisted.
Another New York-based contractor who has worked on several projects has expressed alarm.
“You have a simple way of checking whether you getting value for money. They would have to calculate per square foot. When you are doing construction, everything is about measurements. There is a constant cost. It is impossible for a terminal and runway to cost US$150M and you get what we have at Timehri. Somebody has to go to jail. It is impossible that it would be established that the price is inflated and then you learn that it is being modified to be smaller…all at the same price.
“Guyana in simple layman’s terms has been shafted. The Government has to come clean.”
Several other contractors have expressed shock at what is coming out now. They too are questioning where the money went. There has been deafening silence.
Instead of eight passenger bridges, government has reduced it to four. The project has gone past four years past its deadline now.
On March 23, 2013, former President under the People’s Progressive Party/Civic (PPP/C), Donald Ramotar, joined then Chinese Ambassador, Zhang Li Min, to turn the sod for a brand new terminal building and longer runway at the Timehri airport.

MONDAY
OIL CONTRACTS ALLOW OPERATORS TO RECOVER ALL COSTS ASSOCIATED WITH INSURANCE
Oil operators will be able to recover “all costs” associated with having an insurance policy, thanks to the Production Sharing Agreement (PSAs) signed with the Government of Guyana.
However, a perusal of several contracts in countries such as Chad, Ghana, Chad, China, and even with Trinidad and Tobago, show that operators there are not allowed to do so.
Considering this finding, Kaieteur News made contact with Trinidadian Oil and Gas Consultant, Anthony Paul on the matter. Paul said that making insurance costs recoverable is something that varies from country to country. The Local Content Expert said that countries tend to limit cost recovery to direct costs to the operations and insurance is considered an indirect cost.
“Indirect costs such as insurance are treated differently, in that, they may be non-recoverable or only partially recoverable. But no, it is not normal for the entire insurance and the premium to be recoverable.”
The PSAs Guyana has with oil operators also allow them to self-insure. This means that the company has given the nation some level of assurance that it will handle the liabilities that come with any possible oil spill. But the Energy Department has since made it pellucid that it would not be accepting this.
In fact, the department has initiated discussions with Central Bank to ensure oil companies comply with the nation’s laws on having a recognized insurance policy. Making this declaration was Energy Department Head, Dr. Mark Bynoe.
So far, Head of the Environmental Protection Agency (EPA) was able to get ExxonMobil to guarantee that it will stand the costs of an oil spill should one occur in the Stabroek Block.
This was one of the conditions upon which it received an Environmental Permit for drilling of the Yellow tail-1 well. It is approximately six miles (10 kilometers) west of Exxon’s Tilapia-1 in the Turbot area.

MURDERED WEST COAST BERBICE GRANNY…
DAUGHTER CONFESSES TO SLASHING MOM’S THROAT WITH CHOPPER AFTER ROW OVER STOLEN MONEY
She was expected to be her mother’s keeper and caregiver, but in a bizarre twist she turned out to be her mother’s killer.
One of the daughters of Rookmin ‘Jocelyn’ Jameer has shockingly confessed to slashing the 71-year-old woman’s throat after they had an argument at their Lot 205 Tempe Village, West Coast Berbice residence.
A police source close to the investigation told Kaieteur News that the woman cracked under intense interrogation and revealed in detail the events leading up to the death of the pensioner. She reportedly told police that after her mother accused her of stealing money, they argued daily over the issue.
But it was on Friday, when she came home, and the old woman raised the topic again, that the daughter snapped.
The daughter said she picked up a chopper from the kitchen counter and slit her mom’s throat.
Her husband who was also arrested has since been released from police custody.
Prior to her shocking confession, the woman had told relatives that she found her mother with her throat slit after returning from church.
However, sources in the village had relayed that the woman was imbibing with her husband earlier that day. He returned from the USA a few weeks ago.
Police subsequently arrested the woman and her husband Saturday morning after her alibi did not hold up.
Meanwhile, the son of the dead woman, Shaheed Jameer said that he is in utter disbelief after hearing that his sister “actually admit to killing mommy”.
He added that although his mother was allegedly being abused by his sister he did not think she “had the guts to do that”.
“She nah suppose to do that, that is she mother, we so shocked right now”.
Shaheed had told this publication that his mother had complained to his wife about a week ago that his sister stole cash from her.

TUESDAY

MY VIDEOMEGA INTEREST WAS DECLARED TO THE INTEGRITY COMMISSION – MINISTER HUGHES
– DENIES PARTICIPATING IN CONTRACT AWARD
Minister of Public Telecommunications, Cathy Hughes, has categorically denied using her office or participating in the decision-making process that led to the award of a contract to her media company, Videomega Productions Ltd.
The statement by Hughes, a senior executive of the Alliance For Change (AFC), which forms the smaller faction of the Coalition Government, would come amid a raging debate over public officers and what constitutes a conflict of interest situation.
It was reported recently that Videomega owned by Hughes received $832,200 for producing ads for the oil and gas sector, on behalf of the Department of Energy.
The department, which falls under the Ministry of the Presidency, had insisted that the necessary procurement protocols were followed in awarding the contracts.
Hughes said last week that she had relinquished control in the company since assuming office.
The company itself said that the ministry does not handle the daily operations.
Monday, in her statement, Hughes was at pains to insist that conflict of interest scenario as contemplated by the regulations does not apply to her.
In any case, she had no knowledge that the contract was even issued.
Below in its entirety is the Minister’s statement:
“I would like to invite everyone’s attention to the specific provisions of the Integrity
Commission (Amendment of Code of Conduct) Order 2017 particularly the contents of Articles
4 and 5 “Conflict of Interest” and “Use of Official influence.”
The specific contents of the Article 4 provide:
No person in public life shall
(a) Allow private interest to conflict with his or her public duties or improperly influence his or her conduct in public in the performance of his or her public duties.
(b) Allow the pursuit of his or her private interests to interfere with the proper discharge of his or her public duties.
Provided that any such conflict that tends to interfere with the proper discharge of his or her public duties shall be reported to the Integrity Commission for guidance on a resolution as soon as practicable in favour of public duties of the person in public life.

AMENDING PROCUREMENT ACT KEY TO MAXIMISING LOCAL PARTICIPATION IN OIL SECTOR
– TENDER BOARD HEAD
There are several tactics Guyana can employ to ensure local companies get a fair advantage in the tendering process for oil and gas contracts. In fact, Guyana’s procurement laws contain one of these tools called a ‘margin of tenderer reference’.
The law states, “The procuring entity may grant a margin of tenderer reference not exceeding 10 percent to tenders submitted by domestic contractors or for the benefit of tenders for domestically produced goods, provided that such preference is specified in the tender documents.”
“If the lowest evaluated tender was submitted by a foreign tenderer, the evaluating committee will apply the margin of preference to the prices submitted by all foreign tenderers, for evaluation purpose. If, after applying the margin of preference, the lowest evaluated tender was submitted by a domestic tenderer, such tenderer shall be awarded the contract.”
But considering the massive scale of Guyana’s oil wealth to come, Head of the National Procurement and Tender Administration Board (NPTAB), Berkley Wickham, says that perhaps it is time for amendments to be made to this provision, among others, since they date back to 2003.
During an exclusive interview with this newspaper, Wickham said, “There needs to be a national discussion on whether the 10 percent is good enough. We are in the process of modernizing the current Procurement Act. We had a consultancy to do that and we have reviewed the recommendations together with the Public Procurement Commission and those revisions are now with the Attorney General’s Chambers for drafting.”
The Tender Board Head added, “And I would think thereafter, there will be a public process for stakeholder engagements to look at what was recommended for amendment. So there will be ample opportunity at that stage for the people to have a say on what they think should be included to promote more local participation for the oil sector.”
Wickham also emphasized that amendments to the Act are crucial to ensuring local businesses benefit the most from the sector.
“This is very important. If we are talking development and the good life, then this is a necessary step. I would think, and I am not a politician, but it is only fair for the people of Guyana to benefit as much as possible from the gains of the oil and gas sector. So this is a crucial step to propelling local businesses, and particularly women-owned businesses.”
STRATEGY MODIFICATIONS
There are several tools emerging, which oil producers like Guyana can use to maximize the participation of local firms in the oil and gas sector. One of the most effective ways is through the modification of the procurement strategy that governs the sector. This is according to the International Petroleum Industry Environmental Conservation Association (IPIECA).
Headquartered in London, IPIECA develops shares and promotes good practice and knowledge to help the oil and gas industry of countries improve environmental and social performance.
According to IPIECA, there are several modifications a country can make to ensure local businesses are given a fair advantage. It outlined one option to be Reservation or ‘set aside’ provisions which mandate that only qualified local firms are allowed to bid for certain contracts. IPIECA also said that the procurement strategy can be improved by providing local companies with additional information, reducing the size and complexity of the scope, or simplifying procedures or processes to make it more likely for them to participate in the procurement process.
Further to this, the Association said that modifications can be made to the Bid Evaluation Process to help businesses have more participation. In this regard, it said that the General Preferencing provision can be used. This allows for a local bidder to be selected when it is relatively close to other competitors on quality and price.

EXXON INSTALLS FIRST SUBSEA TREE FOR LIZA PHASE 1 DEVELOPMENT
ExxonMobil has successfully installed the first subsea tree for the Liza Phase One Development Project.
In a missive to the media, the company noted that a subsea tree monitors and controls the production of a subsea well. Fixed to the wellhead of a completed well, it can also manage fluids or gas injected into a well.
The oil major said that the tree arrived in Guyana’s waters on the Chouest C-Installer in February. It said that installation and testing began on April 11 and lasted for four days.
The American multinational said that it was lowered into the water from the back deck of the multipurpose installation vessel via a crane, set in 1700 metres of water onto the first completed well, latched, and locked into place using a Remote Operated Vehicle (ROV). The valves were then pressure tested.
The next tree is expected to be installed in May, the company noted.
Further to this, ExxonMobil said that the Liza Phase One development includes a subsea production system and a Floating Production Storage and Offloading (FPSO) vessel designed to have the capacity to process up to 120,000 barrels of oil per day from four subsea drill centres consisting of 17 wells, including eight producers, six water injectors, and three gas injectors. Production startup is scheduled for early 2020.

WEDNESDAY
MORE EXPLOSIVE REVELATIONS…
HOUSING MINISTER’S HUSBAND USED CH&PA STAFFERS TO WITNESS PRIVATE CONTRACT
– ONE OF THEM IS HIS NEPHEW
Hours after Minister of Housing, Valerie Adams-Yearwood released a statement challenging claims of a conflict of interest with her husband at the Central Housing and Planning Authority (CH&PA), there are shocking details emerging that raise even more questions.
The Minister came under public scrutiny two weeks ago after Opposition Leader, Bharrat Jagdeo, reported that contracts were issued to the Minister’s husband, Godfrey Yearwood, by CH&PA – the agency over which she presides.
After days of public pressure, Minister Adams-Yearwood denied any input, claiming that she does not preside over the bidding and awarding process at CH&PA.
The Minister and Godfrey Yearwood married in August 2017 and a few months later, he was awarded contracts to build a number of turn-key homes for CH&PA.
However, the minister claimed, in her statement on Monday, that she learnt of the awards only after he told her.
Further, when a 2017 press release from Government surfaced, stating that the Minister “presided” over the awarding of contracts – contrary to the claim by the Minister that she does not – she claimed Monday that her presence at the event was purely ceremonial.
But it isn’t just the Minister who is related to Godfrey Yearwood.
This publication saw documents that suggest that staffers at CH&PA were very familiar with the Minister’s husband.
In fact one of them, Troy Marks, the Clerk of Works at CH&PA, is said to be a nephew of the Minister’s husband.

HARBOUR BRIDGE TESTING AUTOMATED TOLL COLLECTION SYSTEM
Despite plans to build a new crossing for the Demerara River, management of the current bridge is not standing still.
The Bridge management is currently testing an automated toll system which will allow vehicles that traverse the Demerara Harbour Bridge to buy credit, instead of paying cash at the four toll booths.
The idea is improve efficiency, in terms of traffic management, and accountability.
Tuesday, General Manager, Rawlston Adams, and two of the senior staffers Traffic Coordinator, Hazellu Richardson and Andre Crowder, Electrical Engineer, all spoke about the pilot project.
The 40-year-old harbour bridge is the main link between the city and West Demerara. It connects via ferry to Region Seven and Essequibo Coast, Region Two.
However, the efficiency of the bridge has been severely challenged in recent years as more and more vehicles are placed on the country’s roads. This has led to congestion at especially peak hours.
A few years ago, vehicles would purchase tickets from the eastern end and traverse to the west side where someone would collect them.
However, to speed up the lines, the western end collection system was removed from the equation.
Then at peak hours, the bridge would be made one-way.
According to Adams, the bridge has collaborated with a local tech company, Smartware Solutions, which has done work before with the bridge, for the automated toll system.
Currently, 10 of the bridge vehicles are equipped with Radio-frequency identification (RFID) chips which are automatically picked up by equipment at one of the toll booth.
The signals cause a ticket to be printed.
These are similar systems that are used on bridges and other facilities worldwide, Adams explained.
The bridge will benefit significantly as it has several credit facilities with ministries, state agencies and companies.
“As it regards to Government revenue, we must account for every dollar we collect by issuing a receipt.”
The GM disclosed that the current system causes delays as when a government vehicle that has credit facilities come to the toll booth. The worker has to manually prepare a receipt.
This takes time and slows the traffic, Adams said.
The idea is to slowly introduce the government ministries and state agencies and then the general public.

GUNMEN KILL MONEY CHANGER OUTSIDE MALL-ESCAPE ON BIKE WITH CASH AND FIREARM
Police have launched an intense manhunt for two gunmen who escaped with cash and a firearm after killing moneychanger Prince William Alleyne outside Ashmin’s Mall. The killing occurred around 10:40 hrs Tuesday.
Alleyne, 57, of Lot 88 Grove Public Road, East Bank Demerara, was shot in the head during a scuffle with the robbers.
The father of two collapsed on the eastern parapet in High Street, while the killers escaped on a CG motorcycle that they had parked further up High Street.
Eyewitnesses said that the gunmen’s heads were covered and that they sported heavy beards.
They appeared to have been familiar with their victim’s routine, since persons close to Alleyne said that he would habitually park his car in High Street, in the vicinity of the Ashmin’s Mall, before heading the America Street to ply his trade. Ranks from Brickdam, Alberttown and CID Headquarters, Eve Leary are said to be looking for two known men in connection with the crime.
Police said that Alleyne left his home around 10:00 hrs in his car, PMM 9512, taking his licensed pistol and an undisclosed sum of cash.
He secured and parked his car on the eastern parapet outside Ashmin’s Mall in High Street.
Two men immediately confronted him. A scuffle ensued, during which the men shot Alleyne in the head and snatched his bag containing his money and firearm.
Eyewitnesses recalled hearing a gunshot and then seeing two young men, whose heads were covered and who sported beards, sprinting south up High Street.
They then clambered onto a CG motorcycle. According to eyewitnesses, the men appeared to be nervous and “had to crank the bike about three times” before they got it started.

THURSDAY
SUBSTANDARD US$150M AIRPORT WARRANTS FULL-FLEDGED PROBE
– OPPOSITION LEADER
There must be a thorough investigation into the renovation done on the Cheddi Jagan International Airport. General Secretary of the People’s Progressive Party (PPP), Bharrat Jagdeo, made this assertion Wednesday, during a press conference.
Eight years after the signing of the contract, China Harbour Engineering Corporation Limited (CHEC) is preparing to hand over the renovated airport. But there are questions about the quality of work done by the contractor.
The project has been marred by one problem after another. The largest ongoing infrastructural undertaken by the government, it has spanned three administrations thus far. It was inexplicably modified by the Coalition Government starting in 2015, with Guyana getting a considerably smaller airport, though still obligated for a US$150M bill.
Jagdeo had said that the Airport is a “rehab project”, and that it is not a new, state-of-the-art airport, as was initially promised. He said that he believes the cause of this is collusion, involving government officials.
He had sought to dispel the notion that the People’s Progressive Party/Civic (PPP/C) is to blame for the variation of the project. A number of local contractors had expressed shock at some of the prices that the Bharrat Jagdeo administration, in late 2011, agreed to in its contract with China Harbour.
“They argued that it was a corrupt PPP contract. Now, they have decided to pay more when we are getting less,” said the Opposition Leader.
The project initially promised a brand new terminal building, with it being a two-storey structure, with glass roof and highlights. It also was meant to be accompanied by eight passenger bridges. Jagdeo said that, as it is, there will be a runway, a part of the apron, a rehabilitated terminal building instead of a “spanking” new one, and only four bridges.

WOMAN ACCUSED OF MURDERING MOTHER FAINTS TWICE IN COURT
– MAGISTRATE ORDERS PSYCHOLOGICAL EVALUATION
The Fort Wellington Magistrate’s Court was in total chaos Wednesday when 41-year-old murder accused Kamela Jameer, a mother of two, appeared before Magistrate Rabindranauth Singh, to answer to the charge of murder, committed on her 71-year-old mother Rookmin Jameer at their Lot 305 Tempe Village, West Coast Berbice residence.
Before the charge could be read, the woman fainted in the courtroom, putting a halt to the proceedings for a few minutes. Magistrate Singh recessed for 10 minutes and instructed that the woman be taken to the briefing room to be revived.
When she returned for the second time, she was crying uncontrollably and the Magistrate stated that he would only accept the swearing of evidence by the CID rank, but would not read the charge, in light of the condition she was in. Jameer fainted a second time and the Magistrate instructed ranks to take her to the hospital for medical attention. A psychiatric evaluation was also ordered.
She is currently under guard at the Fort Wellington Hospital and is set to appear again in court today.
The woman’s brother Shaheed Jameer and other relatives were present at court in support. The brother told Kaieteur News that despite what his sister allegedly did to his mother “is still my sister and I forgive she”. He asked that the accused be counselled, since it is his belief that she has struggled mentally since her children were taken away from her.
Shaheed Jameer explained that sometime ago, during the woman’s previous marriage, she lost her home to a fire and shortly after, her marriage fell apart and “dem children go and live with their father”. Those troubling events, he opined, contributed to the mental state she is in presently, but stressed that there is no excuse for her actions.

COPS QUESTION JAGDEO OVER HIS BABU JAAN COMMENTS
Leader of the Opposition, Bharrat Jagdeo was Wednesday questioned by ranks of the Criminal Investigations Department, (CID) over statements he made during his address at a rally held in commemoration of the People’s Progressive Party (PPP)’s founding leader Cheddi Jagan at Babu Jaan, Corentyne, last month.
Kaieteur News understands that the police paid Jagdeo a visit at his Church Street office where they put to him several allegations in the presence of his attorneys Anil Nandlall, Sanjeev Datadin and Priya Manickchand.
Jagdeo has been accused of inciting his party supporters with the comments, he made in regards to the government during his address at Babu Jaan on March 10th last.
During his speech, the opposition leader had, in reference to the government, urged his supporters to “chase them out.”
Jagdeo had emphasised that the government has been illegal following the contentious no- confidence vote passed in the National Assembly on December 21.
In a statement on Wednesday, the Guyana Police Force denied being ordered by anyone to arrest and charge the Opposition Leader over his alleged inciting racial hostility during a speech at Babu Jaan.
The force said it had taken note of a press statement by the PPP in which the party alleged that the police have been instructed by Congress Place and the Office of the President to arrest, detain, and charge Opposition Leader and General Secretary.
“The Guyana Police Force wishes to clearly refute such statement and to inform all and sundry that the Ministry of the Presidency, the People’s National Congress – Reform or A Partnership for National Unity have not given any such instruction or advice.”
Additionally, the Force insisted that it remains a professional organization and any action previously or currently being taken, is wholly pursuant to legal advice obtained and or to engage in investigations.

TEIXEIRA, ANAMAYAH RESIGN AS PPP MPS
Two of three dual citizens from the People’s Progressive Party, Gail Teixeira and Adrian Anamayah, have resigned as Members of Parliament.
This announcement was made by Opposition Leader, Bharrat Jagdeo, during a press conference Wednesday. Jagdeo said that the third parliamentarian aligned with the PPP, who has dual citizenship, Odinga Lumumba, has not yet resigned, but is expected to do so.
Jagdeo said that Teixeira, who was the Opposition’s Chief Whip, has served 24 years in Parliament, and that her resignation, in spite of the work she has put in, displays her respect for the rule of law. He said that though she has resigned, she is on the list for the upcoming election cycle and will be part of the government, should the party win the election.
On the other hand, the Opposition Leader said that the coalition government displayed duplicitous behaviour by its handling of the vote of Charrandass Persaud in support of the No Confidence motion, on December 21, 2018.

FRIDAY

QUESTIONABLE ENGINEERS’ ESTIMATES COSTING GUYANA BILLION$

In recent years, there has been increasing scrutiny of the billions of dollars being spent by consecutive governments on construction projects and for paying for services from suppliers.
The tender process, until now, has been largely shrouded in secrecy.
Despite tougher laws and the establishing of the Public Procurement Commission (PPC), there is growing evidence that contractors, Government engineers and others in the ministries and agencies are still finding ways to beat the system.
Recently, the spotlight was brought sharply down on the role of the in-house engineers at the various ministries, regional administrations and state agencies.
They play a crucial role. One of them is the preparations of what is known as Engineer’s Estimates.
Using market prices, the engineers would work to prepare estimates of what a project should cost.
It would include cost of steel, cement, labour, transportation, nails and roofing materials.
The use of excavators, among other things, would also be factored in the cost.
The idea for the Engineer’s Estimate is for the ministry or state agency to have a realistic cost that would be used as guide for budgeting purposes.
However, in recent years, it has been found that the Engineer’s Estimates are way above what is being submitted by contractors.
It has raised serious questions about the competence of the engineers and brought into the equation the strong possibilities of collusion with contractors.
Over the weekend, one major contractor, Peter Lewis, who insisted that his company is being sidelined, made some damning claims.
He said that engineers are the crooks in the country’s procurement system.
In fact, the process starts with them and ends with them.
On Tuesday, there were at least two glaring cases in which the engineers seem far removed from reality or that it could be concluded that something else was happening.
One tender was for the completion of a building for the Upper Corentyne Industrial Training Centre.
The Engineer’s Estimate for the work was $12,042,800.
There were 12 bids. All came in under the Engineer’s Estimate. The lowest was at $7.2M.
There was another one where the Engineer’s Estimate was higher than the 14 bidders.
The job was for the rehabilitation of the Science Lab of the St Mary’s Secondary School. The Engineer’s Estimate was $13,312,000.
Contractors have been taking note of the opening of the tenders which are covered and published by Kaieteur News and Stabroek News, another newspaper.
“How do you have an in-house engineer who is helping to put together the tender documents, so that contractors can bid, have an estimate that is higher than what people are bidding? These are the same engineers that maybe have to evaluate the tenders and even monitor the works? “President David Granger needs to look into this. The question to ask is, if we really need engineers and their estimates?” one contractor who is familiar with the process asked.
Another contractor, Managing Partner of Associated Construction Services, over the weekend called on President David Granger to intervene and to launch an inquiry.
There are several layers to the fraud that is occurring with the public bidding.
He explained that from his investigations, engineers at ministries would collaborate with particular contractors in a kickback scheme.

OVER 25 AFRICAN STATES FAIL TO REAP FULL BENEFITS FROM OIL AND OTHER NATURAL RESOURCES
– GUYANA, OTHER EMERGING PRODUCERS SHOULD TAKE NOTE – NRGI
–
Guyana and other emerging oil producers are being urged to pay rapt attention to a recent analysis that was conducted by the Natural Resource Governance Institute (NRGI).
That analysis revealed that 26 of 28 sub-Saharan African countries failed to reap the benefits from their natural resources. The NRGI report attributes this failure to an “implementation gap” between the laws that govern the extractive industries and the practices in reality.
Specifically, Silas Olan’g, Africa’s Co-Director for the Natural Resource Governance Institute, said that if countries in sub-Saharan Africa closed the ‘implementation gap’ and fully implemented their own laws, they could generate greater income from natural resources.
“They could also better combat the negative human and environmental impacts of extraction,” said Olan’g.
The NRGI Co-Director said that Africa is abundant in natural resources and is home to 30 percent of the world’s oil, gas and mineral reserves. He said that more than half of the exports of many countries in sub-Saharan Africa come from natural resources and as much as 90 percent in the most oil-dependent countries.
He also noted that mineral reserves represent a large share of Government revenues across the region and have the potential to become even more important in countries with recent discoveries, such as oil and gas in Tanzania and Uganda, and large reserves of strategic minerals such as cobalt in the Democratic Republic of Congo.
The official stated, however, that the biggest implementation challenges faced by resource-rich societies in sub-Saharan Africa are fulfilling the legal requirements to transfer revenues collected from oil, gas and mining to local authorities, and publicly disclosing information on social and environmental impacts. Olan’g said that half of the 28 countries studied do not disclose environmental and social impact assessments, even though this is a legal requirement in many countries.
“Trust in Government and companies erode when legal reform is not followed and citizens are left in the dark. Closing the ‘implementation gap’ is in everyone’s interests because ultimately, it enables countries to reap the benefits that their mineral wealth should offer,” said Olan’g.
The official continued, “…Sub-Saharan Africa lags behind other parts of the world in governing state-owned mining and oil companies and natural resource funds, which manage billions of dollars of resource revenues in countries like Angola, Gabon and Nigeria.
“Governments tend not to respect rules for managing assets held in natural resource funds and for disclosing conflicts of interest, particularly where corruption is poorly controlled—a reality in most of the countries surveyed.”

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