Govt. slaps Leguan Stelling contractor with over $400M lawsuit

Mar 11, 2021 News

The photo shows the state of the Leguan Stelling in February.

Kaieteur News – The State, through the Attorney General and Minister of Legal Affairs, Anil Nandlall, S.C., has slapped the contractor working on the Leguan Stelling, S. Maraj Contracting Services, with a lawsuit seeking to recover over $400 million of taxpayer dollars.
This move comes just weeks after the contract was scrapped and over two years of project delays.
According to the court documents seen by this publication, the State is seeking to recover general damages in excess of $100 million for the breach of the contract dated September 18, 2018; $41.3 million in liquidated damages, along with another $41.3 million under the performance bond agreement.
The State is also seeking $81.3 million under the mobilization bond agreement.
Additionally, the State is seeking to procure an Order of Restitution in the sum of $81.3 million and $100 million in aggravated damages for the breach of the contractual agreement.
Further on, the documents outlined as well that the State is seeking another Order of Restitution for all monies owning on the Advance Guarantee and Performance Bond, all interest in accordance with Section 12 of the Law Reform Miscellaneous Act, Chapter 6:02, Laws of Guyana and all other costs the Courts deems just and reasonable.
Following an 11-hour deliberation with the Public Works Minister, the contractor and a team from the Transport and Harbours Department (T&HD) back in February, the team determined that the contractor did not possess the wherewithal to successfully execute the project valued at $413 million.
The Ministry reported that the contractor received payments totalling $199,435,000, almost 50 percent 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 $200 million 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 $100 million, the Ministry also noted.
“A contract that should have been completed in six months 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 Public Works Ministry revealed.
The Ministry had 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 was notable was 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.
Minister Edghill sought to remind that on four occasions he had engaged the contractor and the Transport and Harbours Department on the completion of this project, which yielded no success.
It was against this backdrop that the contract was terminated with immediate effect.

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