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Public Security Ministry owed millions by defaulting suppliers

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Millions of dollars are owed to the Public Security Ministry as a result of an overpayment to suppliers as well as the failure of some suppliers to fully deliver various goods to the entity.

These revelations were made on Monday morning (5th June 2017) as the Public Accounts Committee was examining several financial discrepancies highlighted in the Auditor General Report 2015.

At one point during the examination, Government Parliamentarian, Charrandas Persaud declared that the Legal Affairs Ministry is “not necessarily the best” entity to represent the government in its efforts to recover monies owed by several suppliers.

Millions owed

An industrial washer and one industrial dryer valued some $7.542M which was purchased in 2014 for the Guyana Prison Service are yet to be received by the Ministry and all efforts to contact the international supplier are futile.

The Ministry’s Permanent Secretary, Daneilla McCalmon said the contract was sole sourced to the international firm Tactical and Commercial Inc since the entity had previously supplied the Ministry.

She said the contractor was made more than $10M in full, but only part of the supply was delivered. McCalmon said the Ministry is unable to reach the supplier to deliver the remaining goods which amount to over $7M.

PAC Chairman, Irfaan Ali recommended that she write the US Ambassador in any effort to get the issue resolved.

In another instance, the Ministry is yet to receive two stallions which had a total value of $1.022M. The supplier was criminally charged, and the sum of $50,000 was recovered. However, the supplier had subsequently died in 2011, resulting of $971,800 still to be recovered.

The Permanent Secretary said the Finance Secretary is trying to come up with a policy regarding how to deal with these situations.

Additionally, the Ministry is still to recover overpayments made on remedial works at the Albion Police Station in 2010 in the sum of $3.454M. Initially, the Ministry was owed $3.504, but in 2015, the entity recovered $50,000 from the contractor.

The Permanent Secretary said the contract has committed to paying $50,000 monthly and so far, the Ministry has received $700,000.

Not the best

Meanwhile, in another instance, over $3M was owed to the government by a contractor who was awarded a contract in 2007 for the construction of the construction of the New Capital Dormitory at the Georgetown Prisons.

The contract was valued $24.654M however in October 2008; the contract was terminated after the amounts totalling $21.423M were paid to the contractor.

An assessment on the works done revealed that the contractor was overpaid $10.410M.

The Ministry levied on a Performance Bond, which was held by CLICO, and was able to recover $7.008M.

However, the matter was addressed in the High Court and dismissed on the grounds that the signing of the release letter the Ministry forfeited any further payment.

At this point, MP Persaud declared, “Something hocus pocus went down there.”

He noted that “I would like to question the lawyer who filed the action on behalf of the Ministry.”

The Public Security Ministry’s Permanent Secretary disclosed that the Legal Affairs Ministry represented the government, to which Persaud responded, “well, they’re not necessarily the best.”

Persaud further noted that the Ministry should take legal action against defaulting suppliers to ensure monies owed to the government are recovered.

“Unless we do that, I doubt whether we can recover the monies that are owed to us,” he stated.

Meanwhile, Opposition Member of Parliament (MP) remarked that there appears to be a major breakdown in the financial management within the Public Security Ministry.

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