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Over $1.8B in Govt. contracts terminated due to poor work – AG Report
Photograph of the incomplete works at termination at Conversation Tree to Dennis Street – 15 August 2023 (Over $1.8B in Govt. contracts terminated due to poor work )
Kaieteur news- Five contracts totalling $1.857 billion were terminated by the Government of Guyana due to substandard work, last year, the Auditor General’s 2023 Report disclosed.
According to the report, the popular Conversation Tree to Dennis Street – Exit to Sheriff Street – road widening and new connector project is among the projects set to suffer significant delays due to the contract being terminated.
The other contracts include the Ministry of Foreign Affairs – Construction of New Guyana Embassy in Brazil; the Ministry of Labour – Construction of Office and Training Centre at Corriverton; and Ministry of Human Services and Social Security –Construction of Child Care Centre at Mahaica and Repairs to the TIP Building in Region Two.
Issues surrounding the award made by National Procurement Tender and Administration Board in the sum of $830M for the widening of Corridor Conversation Tree to Dennis Street- Lot 8(B) were widely reported.
The duration of the contract was 14 months with the commencement date of September 5, 2022 and completion date of November 5, 2023. The defect liability period was one year. By December 31, 2023, amounts totalling $465M were paid to the contractor.
Physical verification conducted on August 15, 2024 revealed that the works were incomplete and the contract was terminated on May 10,2024.
It was noted that the contractor failed to complete the works within the contractual duration, while the advance payment was not fully recovered.
These two situations constituted fundamental breaches of the contract. Under the General Conditions of Contract (GCC) clause, the contractor does not provide the required guarantee and the contractor delayed the completion of the works for a number of days’ correspondent to a maximum possible number of liquidated damages as indicated in the Special conditions of the contract.
In spite of these fundamental breaches of the contract by the contractor, the Ministry opted instead to terminate the contract for convenience and valued the contractor’s indebtedness to the Ministry in the sum of $152M.
It was noted that the Ministry by way of a mutual settlement agreement, which was prepared in conjunction with Attorney General Office, took ownership of the contractor’s equipment as part of the settlement for moneys owed to the Ministry. The equipment, with a total estimated value of $153.600M was inspected and valued by the Senior Mechanical Engineer from the Ministry of Public Works.
It was advised by the Ministry that the remaining incomplete works were awarded to another contractor who was at the time mobilized on site and was in the process of constructing a sheet pile revetment along Dennis Street.
As a result, the contract was terminated for convenience because the contractor could not complete the works mainly due to financial constraints.
The AG report pointed out that Lot 8A was completed and since these projects were to function in unison, the contract was terminated for convenience to fast track the completion of Lot 8B to better service the general public as a bypass to the congested Sheriff Street.
(Over $1.8B in Govt. contracts terminated due to poor work)
- Auditor General, contracts, Conversation Tree, Government of Guyana, road projects, substandard work, terminated
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