GOVERNMENT has decided to make public the contractual agreements for the construction of the Specialty Hospital, maintaining that the documents will prove there is nothing unethical about signing a Memorandum of Understanding (MoU) with Fedders Lloyd.

At the Ministry of the Presidency yesterday, Minister of State Joseph Harmon told the press that the documents will be made public shortly in keeping with the government’s commitment to remain transparent and accountable to the nation.

According to Harmon, there is a provision in the contract that allows government to replace the initial contractor if it encounters major obstacles in the execution of the project.

“There is a provision that if one of the contractors for some reason or another, either through fraud or any other matter of that nature, that the party, in this case the Government, can move to either the next person or any other company,” Harmon explained.

On Wednesday, November 25, 2015 Finance Minister Winston Jordan signed an MoU with Fedders Lloyd on behalf of the government for the construction of the Specialty Hospital. Fedders Lloyd in entering the MOU will review the works already started; conclude a design of the hospital that is acceptable to the government; and commit to fully equip the facility on completion of its construction.

Work on the Specialty Hospital was halted after allegations of impropriety and fraud were leveled against Surendra Engineering – the contractor who won the bid for its construction in 2012.

MOU SAFEGUARDS
However, before this MoU was signed with Fedders Lloyd there was no public tendering other than the one which led to the 2012 award to Surendra Engineering. But Harmon, in admitting that the project was not tendered out for a second time, maintained that the clauses within the contract allow for the next company in line to execute the project.

He explained, however, that the National Tender and Procurement Administration Board (NPTAB) had disqualified Fedders Lloyd based on its offer.

“The basis for disqualifying Fedders Lloyd was the fact that it had offered two prices…I understand that Fedders Lloyd would have offered a sum and then a discount which made the price different. I think what the Tender Board might have said is the discount was not lawful. But, in the contract itself, the agreement signed between the parties, that is what is anticipated,” he further explained. “Too many things were done in the dark that you were just getting the end result of things and not the whole process,” he added.

Minister Jordan had explained that the decision to utilise the instrument of the MoU safeguards the procurement process and seeks to optimise the use of public funds, in this case a loan, in the most beneficial way.

It was noted that following the allegations of fraud, the then government proceeded to the court for remedies after terminating the contract. The court ruled in favour of government and the construction of the facility came to a standstill. However, the future of the Line of Credit (LOC) was threatened.

“Following the APNU+AFC Government’s accession to office, it reviewed the project and concluded that since there was no existing contract that could be enforced, it was impractical to continue to keep the LOC in its existing form, especially since it was attracting commitment fees.”

As a result, government asked the EXIM Bank of India to cancel the LOC for the Specialty Hospital and to reallocate the balance of funds to a project to modernize three primary healthcare facilities.

But the Government of India (GOI) in its response, while indicating its no objection and support for the modernisation of primary healthcare facilities suggested that the GOG should consider salvaging the Specialty Hospital, as it will complement primary healthcare facilities in Guyana.

WILLING PARTNER
“GOG having examined the merits of the proposal began searching for a willing partner to complete the Specialty Hospital using the remainder of the LOC. In the interest of time, government approached Fedders Lloyd – one of the original bidders – to explore the possibility of them completing the project. Fedders Lloyd expressed continued interest and was prepared to complete and fully equip the facility,” the Finance Minister explained.

But despite the lengthy explanations given by the government, the People’s Progressive Party/Civic is still crying “corruption.” The main Opposition political party yesterday said it stands ready to challenge the government’s decision legally.