GUYOIL officials breached procurement protocol, overpaid fuel companies $680M

GUYOIL officials breached procurement protocol, overpaid fuel companies $680M – Auditor General

Oct 02, 2022 News

Kaieteur News – A special audit by the Auditor General of Guyana has revealed that four officials of state-owned Guyana Oil Company (GUYOIL) had breached procurement protocol and negotiated a deal that resulted in the excess payment of US$3.4 million to two fuel companies.

Former Director, Akanni Blair

Inventory and Procurement Manager (IPM), Leonard Khan

According to the Auditor General report dated May 28, 2021, the officials are, former Director, Akanni Blair, former General Secretary (GS), Trevor Bassoo, Company Secretary (CS), Shawn Persaud and Inventory and Procurement Manager (IPM), Leonard Khan.

GUYOIL had won a bid to supply the Guyana Power and Light (GPL) with Heavy Fuel Oil (HFO) and on March 16, 2021, a contract was signed between the two companies for the supply and delivery of 900,000 barrels of fuel at the total cost of US$9,945,000 (US$11.05 per barrel).

However, it was stated that IPM Khan related that due to the timeline of the delivery schedule and failed negotiations between GUYOIL and their new fuel suppliers, the company resorted to engage its fuel suppliers (Paria and Staatsolie) to deliver the HFO that was to be supplied to GPL. Documentation confirmed that after receiving the fuel from their supplier, GUYOIL delivered two shipments of HFO to GPL between April 9 and 20, 2021.

Even though the contract was signed for the supply and delivery of 900,000 barrels of HFO valued at US$9.9 million, GUYOIL ended up paying excess money to its suppliers.

It was revealed in the audit document that a total of 62,266 barrels of HFO, at the cost of US$4.1 million, was delivered to GPL, which was not in accordance with the contract price.

In fact, the contract that was signed between GUYOIL and GPL was for the supply of the 900,000 barrels at US$11.05 per barrel. However, the two shipments that GPL received from GUYOIL were at the cost of US$64.93 and US$68.28 per barrel – revealing that GUYOIL paid in excess of US$3,462,311 to their fuel suppliers.

Company Secretary (CS), Shawn Persaud

Former General Secretary, Trevor Bassoo

If this deal had continued GUYOIL would have paid their suppliers Staatsolie and Paria approximately US$55 million, which is six times higher than the contract cost which was signed for US$9.9 million for the same 900,000 barrels of HFO.

On April 22, 2021, GUYOIL formally requested that GPL rescind the contract and on April 23, 2021, the contract was mutually terminated.

The AG pointed out that it was the GM, CS, and IPM who negotiated the deal to supply the HFO that resulted in an excess payment of US$3,462,311 to fuel companies, Staatsolie and Paria. As such he stated the trio should be held accountable. However, the Auditor General recommended that the Director, GM, CS and IPM, who acted inappropriately and not in the best interest of the company, be relieved of their duties.

The AG had recommended too that the the Guyana Police Force (GPF) be called in to conduct an in-depth investigation and institute charges if necessary.

Bassoo had tendered his resignation from GUYOIL in April 2021, and in the same month President Irfaan Ali had ordered that Blair and Persaud be removed from the company.

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