Govt. to take contractor to court for substandard work on Ministry of Health HQ

Feb 02, 2023 Court Stories, Features / Columnists, News

Kaieteur News – On Tuesday, in the National Assembly, Minister of Health, Dr. Frank Anthony disclosed that the Government has commenced legal proceedings against Chung’s Global Enterprise, in relation to substandard work on the Health Ministry’s Headquarters located on Brickdam, Georgetown.

Minister Anthony made the disclosure while responding to questions by Opposition Member of Parliament, Jermaine Figueira, in relation to the termination of said contract by the government 0n October 31, 2020.

The Department of Public Information (DPI) reported that the minister stated that the Attorney General and Legal Affairs Minister, Anil Nandlall, SC, has already taken the necessary legal steps against the contractor.

File photo of the Ministry of Health’s head office at Brickdam while under construction

Dr. Anthony said the original cost of the project was $365 million. It was intended to be completed in 12 months and the contractor received an advance payment of $71.2 million, which represented some 20 percent of the contract sum.

Notably, in April 2018, the APNU+AFC Administration contracted a supervisory firm to look over the construction of the building. Also, in 2018, two additional payments were made to Chung’s Global Enterprise.

According to Dr. Anthony, the first and second payments were made in the sums of $34.5 million and $48.8 million, respectively. However, according to the Auditor General’s report, at the end of December 2018, little work was done.

“Twenty-one months after the signing of the contract, only foundation work was completed and some work was started on the erection of steel frame, and when they visited the site, there were three workers on the site, three workers were working,” Minister Anthony said. In fact, the company contracted to supervise the work said there were “many instances” of substandard work.

Minister Anthony noted that on February 11, 2019 ground beams were found to be substandard and these defects were pointed out – adding, some of the work had to be redone which also added to the cost.

“The Auditor General recommended that liquidated damages should have been instituted, but there was no evidence that the ministry liquidated any damages,” the minister said.

“At the end of 2019, the contractor received $304.5 million or about 85 percent of the contract sum, and payments were made without valuation of six payment certificates, which totaled about $233.1 million, there was no valuation certificate, and works remained incomplete,” the health minister pointed out.

DPI reported that Dr. Anthony added that among some of the works to be completed were the ceiling works, painting of the internal and external walls, electrical and AC unit installations, installation the lifts, tiling works, plumbing works and additional furnishing.

He noted that in 2019, the Auditor General recommended that the head of budget agency take immediate actions to activate the stipulations of the contract including termination of the contract and recovery of the sums paid.

With the decision being made to terminate the contract – it was estimated that for the work to be completed, the contract had to be increased to about $870 million. This represented an additional $513.3 million to be added to the $304.5 million that was already paid.

When the performance bond was checked, it was already expired one year prior.

DPI reported that the current administration took office in August 2020 and terminated the contract soon after and a new contract was awarded to the tune of $436 million to complete the work.

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Dr. Frank Anthony, Jermaine Figueira, Minister of Health, National Assembly, Opposition Member of Parliament

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