Millions in payments made to errant contractor of Leguan Ferry Stelling - AG report

Millions in payments made to errant contractor of Leguan Ferry Stelling – AG report

Nov 14, 2022 News

Kaieteur News – The Auditor General Report for 2021 has chronicled a series of payments made to an errant contractor for works that he did not complete at the Leguan Ferry Stelling.

The Leguan Ferry Stelling

The rehabilitation project which was awarded to Sattrohan Maraj of S. Maraj Contracting Services suffered a series of setbacks.

It was eventually terminated and steps have since been taken by the People’s Progressive Party Civic (PPP/C) Government to recover the monies.

According to the AG’s report, the contract awarded for the rehabilitation of the Leguan Ferry Stelling in the sum of $413.259M was made in September 2018.

By 2019, payments totalling $199.435M were made on the contract sum. However, the estimated value of works completed at that time was $50.970M.

According to the report, as of December 2021, the Ministry of Public Works paid an additional sum of $151.316M to the contractor bringing the total sum paid to $350.751M.

It should be noted, however, that even though the additional sum was paid, auditors could not determine if the incomplete works valued at $148.465M were done.

According to the status report dated June 6, 2022, the Ministry of Public Works indicated that the contractor has a balance of $60.047M on the contract sum.

Further, it was noted that the contractor, on 11^th March 2022, proposed an increase of $168.058M on the contract sum.

As a result, the contractor received payments in excess of $148.465M for works not done. The audit office said that this led to a special investigation being conducted.

At the time the report was being compiled, auditors nonetheless could not determine if works were still ongoing, as such, the Audit Office has vowed to conduct further investigations on the rehabilitation of the Leguan Stelling.

As a result of the series of delays made in completing the rehabilitation works, the contract for the $413 million Leguan Stelling was eventually terminated by the Guyana Government in 2021. The Government then initiated legal action to have the issue addressed.

Attorney-General and Minister of Legal Affairs, Anil Nandlall, SC, informed the contractor, Sattrohan Maraj of S. Maraj Contracting Services via a letter that his services were being terminated, following a fundamental breach of the contract signed on September 20, 2018.

“The T&HD (Transport and Harbours Department) has granted several extensions of the contract and notwithstanding those extensions, the project has been delayed for approximately 20 months,” the letter indicated.

Nandlall had reminded the contractor that, so far, his company had only completed a minimal amount of the scheduled work. As a result, the contractor was fired on the grounds of “failing to comply with the schedule of works,” as well as special conditions of the contract for the inordinate delay in completion of works under the contract.”

Consequently, the Attorney-General indicated that the government will be moving to enforce several provisions of the contract in relation to “the performance bond of $43,325,926; the mobilization bond of $81,398,376;” as well as the “ten percent contract sum as liquidated damages and the value of works not performed.”

“In addition, thereto, the Government of Guyana reserves its right (to) institute legal proceedings against your company for compensation for breach of contract and unjust enrichment,” Nandlall posited in his letter to the contractor.

The Attorney-General further instructed the company to have the construction site cleared immediately.

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