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Gov’t deal with Linden Holdings Inc. is offensive to tax payers- Ramkarran

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The highly controversial deal which government entered into with Linden Holdings Inc. to store its medication and medical supplies reeks of bad judgement and questionable motives.

 

This is according to Former speaker of the National Assembly and political analyst, Ralph Ramkarran who stated that “the deal, conceived and entered into by the Government, smells. It is offensive to common sense and to the Guyanese public and taxpayer and violates the Government’s promises of transparency and an end to sole sourcing.”

 

Issues surrounding the deal came to light on Monday last in the National Assembly when Public Health Minister, Dr. George Norton was questioned by the political Opposition on an item seeking approval for $31,080,000. This money was brought to the house during the consideration of Financial Paper No.1/2016, which sought to bring additional funding for government agencies from the Contingency Fund.

 

The Minister told the house that a rent of $19.2 million per month was being paid to New GPC and that the Government wanted a cheaper facility in a hurry to avoid paying that ‘exorbitant’ sum. Consequently, there was ‘sole sourcing’ and the contract was given to Linden Holding Inc. The size of the premises in Albouystown was 10,000 square feet and the rent was $12 million per month.

 

Ramkarran in his statement added that the ‘arrangement’ fits squarely in the governance methods against which the government while in opposition complained “bitterly” about.

 

“How can rent of $12 million for 10,000 square feet be a saving on rent of $16 million for 70,000 square feet? My calculations show that $16 million divided by 70,000 square feet gives $228 a square foot and $12 million divided by 10,000 square feet gives $1,200 a square foot. This ‘deal,’ therefore requires the taxpayer to fork out $1,200 a square when other premises are available at $228 a square foot” Ramkarran pointed out.

 

Below is the full statement:

 

Questioning of the Minister of Health by Opposition Members last Monday on an item seeking approval for $31,080,000, revealed that the sum was intended as expenses for renting a bond for the storage of pharmaceuticals. The Minister explained that rent of $19.2 million per month was being paid to New GPC and that the Government wanted a cheaper facility in a hurry to avoid paying that ‘exorbitant’ sum. Consequently, there was ‘sole sourcing’ and the contract was given to Linden Holding Inc. The size of the premises in Albouystown was 10,000 square feet and the rent was $12 million per month.

 

It turns out that, contrary to what the Minister said, New GPC had been storing Government owned pharmaceuticals free of charge and had been doing so since it was the Government’s main supplier of drugs under sole sourcing arrangements. Since sole sourcing of pharmaceuticals came to an end, New GPC put forward a proposal for monthly rental at $16.2 million per month from March for its 70,000 square foot facility. The Government then decided to sole source another facility. Linden Holdings was the beneficiary. It bought the property in which to store the pharmaceuticals in March and is receiving rent, even though the facility is not yet in operation because it is still under preparation.

 

This deal, conceived and entered into by the Government, smells. It is offensive to commonsense and to the Guyanese public and taxpayer and violates the Government’s promises of transparency and an end to sole sourcing. This ‘arrangement’ fits squarely in the governance methods against which the population revolted in elections in 2011 and 2015 and about which the then Opposition complained bitterly and vowed to end. How can rent of $12 million for 10,000 square feet be a saving on rent of $16 million for 70,000 square feet? My calculations show that $16 million divided by 70,000 square feet gives $228 a square foot and $12 million divided by 10,000 square feet gives $1,200 a square foot. This ‘deal,’ therefore requires the taxpayer to fork out $1,200 a square when other premises are available at $228 a square foot. How can this be right?

 

Sensing all of these factors the Cabinet, which had previously approved the contract, acted swiftly and appointed itself, through a sub-committee, to examine the contract and report, equally swiftly. No sooner had the sub-committee been appointed that it began to make excuses and set up defences. But Minister Trotman would not be drawn on the suspicious circumstance that the $25 million advance to Linden Holdings in July as rent and security deposit was to pay for the building which was bought for $25 million and for which transport was passed in the same July. In the meantime, while storage of our pharmaceuticals are not being threatened, the Guyanese public is asked o pay $12 million a month for unfinished premises. Will we get an explanation for this?

 

The President also weighed in on the issue in a defensive mode. But the President demonstrated that he was clearly not fully briefed on the matter. He said that the contract was awarded out of necessity, citing the “punitive nature in which New GPC increased its fees as a result of the termination of single sourcing.” (Guyana Chronicle 12/8/16). The President explained: “What happened is that the new administration decided to bring an end to single sourcing.” (Stabroek News 13/8/16).

 

Out of necessity? Where is the necessity when the drugs are now being safely stored and there is no immediate threat to that arrangement? Punitive? Paying $228 a square foot as opposed to paying $1,200 a square foot? Terminating single sourcing? Does the administration intend to bring an end to single sourcing by single sourcing to Linden Holdings?

 

I understand the Government’s knee-jerk reaction at anything concerning New GPC and its principal, Bobby Ramroop. But the taxpayers and the nation as a whole cannot be made to pay for the Government’s distaste, and indeed that of many people who may not even be supporters of the Government, over what has happened in the past. The people of Guyana did not inflict New GPC on the nation. Why must we be called upon to bear the huge financial burden of a subjective approach to governance, which lacks good sense, or any sense at all. The Government’s haste to enter into this sole sourced contract, and then to excuse and defend its actions, are very discouraging. It raises the question of whether this Government, or any Government, consisting of only one of our main parties, can be trusted to administer our oil wealth.

 

At $228 per square foot, or $16 million a month, charged by New GPC, regarded as ‘exorbitant’ by the Minister and ‘punitive’ by the President, Linden Holdings’ 10,000 square feet would cost $2.28 million a month, not $12 million. The Government needs to explain why the Guyanese people must lose $9+ million a month on this sordid deal.

 

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