Gov’t terminates $413M contract for Leguan stelling

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See below full statement issued by the Minister of Public Works, Juan Edghill:

On February 18, 2021, Myself along with a Team from the Transport and Harbours Department met with the residents of Leguan where I listened to their concerns and conducted a thorough review of the Rehabilitation of the Leguan Ferry Stelling.

At 11 hours today at my office I met the contractor and his team along with the team from the Transport and Harbours Department and being guided by the special report on the rehabilitation of Leguan Ferry Stelling conducted by the Audit Office of Guyana has determined that the contractor S. Maraj Contracting Services is incapable, unable, and does not posses the wherewithal to successfully execute this project valued at $413,259,260.

Important to note, this contract was signed on September 20, 2018 under the leadership of David Patterson then Minister of Public Infrastructure.

The contractor received payments totalling $199,435,000, almost 50% of the contract sum, an unheard of scenario that is outside of normal procurement practices and a breach of the Fiscal Management Accountability Act can be best described as a corrupt transaction.

As of today’s date, actual works and materials on site is estimated at just about $100M.

A contract that should have been completed in six(6) months, signed on September 20, 2018 received an advance payment on September 26, 2018 but the contractor only received his order to commence works on December 6, 2018. So the Contractor was in possession of tens of Millions of tax payers dollars for almost three months before he was required to begin work.

This contract was expected to be completed by the June 7, 2019. It is now 20 months beyond the completion date. By April 19, 2019, the advance payment bond as well as the performance bonds had expired.

At the time of assuming office in August 2020 the PPP/C inherited one of the most troubled, wasteful, corrupt, and poorly managed contracts of the David Granger Administration which fell under the purview of David Patterson and Annette Ferguson.

The Auditor General’s Report which is attached will tell the full story. The contractor having received the contract for the building of a stelling used the argument of a faulty bill of quantities and earned himself by October 30, 2019 an additional $20,650,000 for the supply and delivery of piles for the same Leguan stelling.

It is inconceivable that a contract for the building of a stelling will not include the piles, one of the most important components for the construction of the stelling.

The Auditor General has informed that at the time of the audit the contractor was paid for measured works but there was no measured works break down attached to the payment certificates.

Secondly, variations and change of scope of works could not have been measured and quantified since no documents were available and submitted. It was clear that there was poor contract administration and oversight. The Auditor General has indicated that payments made in some instances were in breach of the Fiscal and Management Accountability Act.

It is important to note that on four separate occasions I engaged the contractor and Transport and Harbours Department on the completion of this project which yielded no success. I have therefore ordered that in keeping with the contractual terms that this contract be immediately terminated and any adverse consequences resulting from this must be placed squarely at the feet of the David Granger APNU/AFC administration with David Patterson and Annette Ferguson as the gazetted Ministers responsible .

I regret this wastage of tax payers money. The Attorney General would be engaged to ensure the recovery of every dollar of tax payers money. For the people of Leguan and Guyanese who have suffered, please be assured that every lawful procurement process will be taken to ensure that a contractor is engaged so that this stelling can be completed.

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