GWI probes ‘reckless spending, poor financial management’; SOCU called in
A forensic audit is being conducted at the Guyana Water Incorporated (GWI) to investigate “reckless spending” and “poor financial management,” according to the Chief Executive Officer of the GWI, Shaik Baksh.
During a press conference on Friday, Baksh said that an internal audit of the utility company revealed that there was “reckless spending” over the past five years. During that time, he said that several expenditures pointed to “poor financial management”.
Concerns raised by Baksh include an $87 million overpayment for work not done on the Vlissengen road pipe project; GWI’s inability to account for over $500,000 spent on the construction of a building in Region Five (Mahaica- Berbice) and about $89 million spent on end of year parties in 2018 and 2019.
In addition to the allegations of reckless spending, Baksh said there were instances where national procurement rules appeared to be breached. Baksh said that the internal audit showed there were instances of fictitious invoicing, questionable delivery of goods, sole-sourcing of chemicals for water treatment and contract splitting.
He specifically detailed that there were irregularities with the use of SeaQuest, a food-based chemical agent that, reportedly, can improve water quality by reducing the effect of iron content in water.
According to the CEO, Seaquest cost the company $1.8 billion over four years. But, he related that there was a “middle man” conducting the procurement and that there appeared to be sole-sourcing of the product.
Additionally, Baksh said that the Board of Directors “expressed discomfort” when they were asked to waive the public tendering for this product and that this waiver was not granted.
“This is totally unacceptable and certain steps will be taken,” Baksh said on Friday. Later, he related that the contractor of SeaQuest claimed that over $200 million is owed.
While SeaQuest has been used over the past few years, Baksh also claimed that the water treatment plants were not maintained. In addition to the forensic audit being conducted, Baksh also stated that the Special Organised Crime Unit (SOCU) has been engaged in financial irregularities discovered by the internal audit.
Beyond these concerns, Baksh said that $800 million was owed to suppliers when new management took over in August last. Since then, only about $200 million remains outstanding and GWI has been able to improve its credit standing.
Since August, also, the CEO said that efforts are being made to intensify works to provide better services to residents, including efforts to fix the transmission and construct treatment plants in five different locations.
“We are moving as a company to bring 90 per cent of treated water to the coastal belt,” Baksh said.