AG moves to the court to recoup $32.6M

THE Government of Guyana, through Attorney-General (AG) and Minister of Legal Affairs, Mr. Anil Nandlall, last Friday, moved to the courts to enforce the performance bond and advance payment guarantee, given by Diamond Fire and General Insurance Incorporated.

The performance bond is valued at $6.6M, while the advance payment guarantee is valued at $26M.
The insurance company acted at the request of JPM General Construction and Engineering Services, which was awarded the contract for the works to be done on phase two of the construction of the Synthetic Track and Field Facility, which includes the construction of a boundary fence and ticket booth.
The synthetic track and field facility, at Leonora, Region 3 (Essequibo Islands/ West Demerara), is Guyana’s first such facility.
The action followed failures in the execution of the contract.
The performance bond was set up to guarantee satisfactory completion of the project by the contractor, failing which the Government (who is the beneficiary of the bond) is guaranteed compensation for any monetary loss up to the amount specified in the bonds.
At the time of the execution of the performance bond and advance payment guarantee, the Diamond Fire and General Insurance Incorporated agreed and irrevocably undertook to pay the Government any sum not exceeding the amounts stated in the bonds upon receipt of the Government’s first demand.
The Government terminated the said contract owing to the company’s failure to discharge its contractual obligations on July 24, 2014, and on September 25, the Permanent Secretary of the Ministry of Culture, Youth and Sport wrote to the insurance company, indicating that the contract was terminated and that there would be a move to enforce the performance bond and advance payment guarantee.
Consequently, the Attorney-General Chambers has since filed a Writ of Summons and Statement of Claim at the Commercial Division of the High Court, in which Nandlall has claimed the $32.6M (performance bond of $6.6M and the advance payment guarantee of $26M).
Interest at the rate of 6 per cent per annum, from the date of filing to the date of judgement, and at the rate of 4 per cent until fully paid is also being claimed by Nandlall. The matter has been scheduled for hearing on December 17.
This is the second such major action, in the last six months, undertaken by the AG’s Chambers, in the interest of holding contractors to account and ensuring value for the Guyanese tax-payer dollar.