AS previously threatened, the Guyana Government has moved to the court to recover the millions of dollars that it has so far expended on the incomplete project to rehabilitate the Leguan Stelling. As a consequence, the terminated contractor, S. Maraj Contracting Services is being sued for more than $400 million in a lawsuit brought against the company by Attorney-General, Anil Nandlall. In the claims filed in the High Court, the government said that it is seeking in excess $100 million in general damages, while an additional $41.3 million is being sought as liquidated damages. The government is also seeking to recover another $41.3 million as the sum due, owing and payable under the performance bond issued by Assuria General, the contractor’s insurance company.
According to the submission, Nandlall is also asking for the company to pay another $81.3 million under the Mobilization Bond issued by the insurance company and for an Order for Restitution in the sum of $81.3 million. The Attorney-General, on behalf of the state, is also seeking compensation for aggravated damages totalling $100 million.

The $413 million contract to rehabilitate the Leguan Stelling was recently terminated after fundamental breaches of the contract signed on September 20, 2018 were detected. Most glaringly is that fact that the project has been delayed for two years. The Attorney-General had previously indicated that the contracted works were slated to be completed on or before June 18, 2019.
“The T&HD (Transport and Harbours Department) has granted several extensions of the contract and notwithstanding those extensions, the project has been delayed for approximately 20 months,” Nandlall said in a recent letter sent to the company.
He reminded the contractor that, so far, his company had only completed a minimal amount of the scheduled work. As a result, the contractor was fired on the grounds of “failing to comply with the schedule of works” as well as special conditions of the contract for the inordinate delay in completion of works under the contract.

ENFORCING CONTRACT PROVISIONS

The letter had also indicated the government’s intention to enforce several provisions of the contract in relation to “the performance bond of $43,325,926; the mobilisation bond of $81,398,376;” as well as the “10 per cent contract sum as liquidated damages and the value of works not performed”.
“In addition, thereto, the Government of Guyana reserves its right (to) institute legal proceedings against your company for compensation for breach of contract and unjust enrichment,” Nandlall posited in his letter to the contractor. The Attorney-General had also instructed the company to have the construction site cleared immediately. In a statement earlier in February, Minister of Public Works, Juan Edghill, announced that following a thorough review of the project, it was determined that the company is “incapable, unable, and does not possess the wherewithal to successfully execute this project valued at $413,259,260”.
Edghill had said that since the signing of the contract under the previous administration, the contractor received payments totalling $199,435,000, which is almost 50 per cent of the overall contract sum. This, he reminded, was “outside of normal procurement practices and a breach of the Fiscal Management Accountability Act” and “can be best described as a corrupt transaction”.

“A contract that should have been completed in six 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,” Edghill added, lamenting the fact that the contractor was in possession of “tens of millions of tax payers’ dollars” for almost three months before he was required to begin work.
It was reported that by April 19, 2019, the advance payment bond as well as the performance bonds for the project had expired. Edghill had said too that on October 30, 2019, the contractor, having received the contract to build the stelling, used the argument of a faulty bill of quantities and earned himself 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,” Edghill had posited.