GOVERNMENT, in the latter part of 2014, sued Surendra Engineering Company Limited (SECL) for over GY$100M and US$4.3 – the latter being sums that were lost in its contract with the company for the design and construction of the proposed Specialty Hospital – as well as other costs.

In a hearing before Justice Rishi Singh in the Commercial Court yesterday Government won its lawsuit.
Government was awarded all of its lawsuit’s claims with the exception of damages in excess of $100M.
The award included: US $4.3M (GY$900M) – sums that were lost in its contract with the company for the design and construction of the proposed Specialty Hospital; costs in the sum of US$10,714.50 (GY$2.3M); and interest at the rate of six percent per annum from the date of filing to the date of judgment and at the rate of four percent until fully paid.
The embattled company was slapped with the lawsuit following breaches of contract, which forced the termination of the company’s engagement on the Specialty Hospital.
Since the lawsuit was filed, there had been difficulty in serving SECL’s representatives with the relevant legal documents.
Attorney General and Minister of Legal Affairs, Anil Nandlall, yesterday stated :“After having being unable to locate the company’s locally registered address in Berbice to effect service of the Writ, notice of service was made in the Guyana Chronicle on two consecutive occasions, December 13, 2014 and December 20, 2014.”
There was no representative for SECL present in court yesterday.
“When the matter was called no one appeared for or on behalf of the defendant company. The matter was called again on January 23, 2015, and once again no one appeared for or on behalf of the company,” Nandlall said.

EXPENDITURE CLAIMS UNSUPPORTED
SECL’s contract for the design and construction of the Specialty Hospital was activated in September 2012 after a bid of US$18.1M.
Under the contract it was agreed that the company would provide services in relation to designing, building, equipping, testing, delivering, installing, completing and commissioning certain facilities for the Surgical Specialty hospital in Turkeyen, Georgetown.
As agreed in the contract, on December 27, 2012, SECL was given an advanced payment of 20 percent of the contract sum – US$3.64M. On November 18, 2013, an additional payment of US$649,440 was made.
Subsequently, SECL failed to submit payment receipts to account for the total advanced payments of US$4.3M – the second sum claimed in the lawsuit. Instead, SECL submitted fabricated, unsigned and inflated invoices with no evidence of actual payments made to support the expenditure claimed.

IRREGULARITIES UNCOVERED
Additionally, VIKAB Engineering Consultants Limited held a 12-month contract as a consultant on the project. VIKAB Engineering, according to Health Minister, Dr. Bheri Ramsaran, was working with a local evaluation team when irregularities and contract violations were uncovered.
Initially, the Government’s concerns were related to delayed milestones and inadequate accountability by SECL for public funds the company had received on signing the contract with the Ministry of Health, but the Government of Guyana subsequently discovered that SECL’s representative in Guyana had submitted a fraudulent document purporting to emanate from the Central Bank of Trinidad and Tobago.
Also, the Advance Payment Guarantee expired on March 11, 2014, and the company failed to renew same in accordance with the terms of the contract.
After being informed of the expiration of the Advance Payment Guarantee, Surendra Engineering Corporation then attempted to submit an Advance payment Guarantee, Performance Security, and Insurance from a company in Trinidad and Tobago called ‘Worldwide Bankers Re Company Ltd’.
However, after queries by the Government of Guyana, it was informed by the Central bank of Trinidad and Tobago that ‘Worldwide Bankers Re Company Ltd’ is not a registered insurance company under the Insurance Act of Trinidad and Tobago.
As such, the fraudulent act by SECL was seen as the last straw.
An investigation then commenced, after a dossier of documents had been submitted to the police by Mr. Nandlall, with a letter requesting such a procedure. Following this, a Writ of Summons and Statement of Claim were filed by Nandlall on October 16, 2014.
The Government of Guyana terminated the contract on the grounds that Surendra Engineering Corporation Limited: failed to renew/provide the Advance Payment Guarantee; engaged in fraudulent practices; and failed to satisfactorily perform its obligations under the terms of the contract.
Since June last year, there have been engagements between Government and SECL on a number of issues regarding the allegations of fraud and financial irregularities.

(By Vanessa Narine)