$413M Leguan Stelling rehabilitation contract terminated

Feb 20, 2021 News

– Project to be retendered

Recent photo highlighting the state of completed works on the Leguan Stelling

Kaieteur News – The People’s Progressive Party/ Civic (PPP/C) government yesterday terminated the two-year-old $413M Leguan Stelling rehabilitation project after the contractor, S. Maraj Contracting Services, failed to comply with its contractual obligations.
In a statement from the Ministry of Public Works (MoPW), it was indicated that yesterday the Minister of Public Works Juan Edghill, met with the contractor, along with a team from the Transport and Harbours Department (T&HD).
Following an 11-hour deliberation, which was guided by a report compiled by the Audit Office of Guyana, the team determined that the contractor, S. Maraj Contracting Services “is incapable, unable, and does not possess the wherewithal to successfully execute this project valued at $413,259,260.”
The statement went on to mention that the contractor received payments totalling $199,435,000, almost 50% of the contract sum, an “unheard of scenario”, which it notes is outside of normal procurement practices and a breach of the Fiscal Management Accountability Act (FMA).
Despite the contractor receiving almost $200M of the contract sum for a project that was awarded two years ago and was scheduled to last six months, actual works and materials on site were estimated at just about $100M, the Ministry noted.
“A contract that should have been completed in six months,” the Public Works Ministry wrote, “and signed on September 20, 2018, received an advanced payment on September 26, 2018, but the contractor only received his order to commence works on December 6, 2018. So the Contractor was in possession of tens of millions of tax payers’ dollars for almost three months before he was required to begin work.”
The Ministry stated that on April 19, 2019, close to 20 months beyond the completion date, the advance payment bond as well as the performance bonds had expired.
In addition, it was indicated that the contractor, having received the contract for the building of a stelling, used the argument of a faulty bill of quantities and earned himself by October 30, 2019, an additional $20,650,000 for the supply and delivery of piles for the same Leguan stelling. What is notable too is that the contract did not include piles, one of the most important components for the construction of the stelling.
The Auditor General, Deodat Sharma, had informed that at the time of the audit, the contractor was paid for measured works, but there was no break down attached to the payment certificates. Variations and change of scope of works could not have been measured,” the Ministry said, “and quantified since no documents were available and submitted. It was clear that there was poor contract administration and oversight. The Auditor General has indicated that payments made in some instances were in breach of the Fiscal and Management Accountability Act.”
Minister Edghill sought to remind that on four occasions, he had engaged the contractor and the Transport and Harbour Department on the completion of this project, which yielded no success. Against this background and in keeping with the contractual terms, the contract was terminated with immediate effect. The Minister said that any adverse consequences resulting from this must be placed squarely at the feet of the David Granger APNU/AFC administration.
Notably, the Minister stated that the Auditor General will be engaged to recover the sums that were awarded and gave assurances that a procurement process will be undertaken to ensure that another contractor is engaged to complete the stelling.

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