WITH immediate effect, the government will be imposing strict actions against errant contractors who have caused damages or destruction to public property or the property of any public utility during the execution of public works projects.
According to a release from the Attorney General Chambers on Thursday, this decision is a direct response to the wanton destruction of public property and the properties of public utilities by contractors in the execution of their contractual obligations in infrastructural projects and other public works.
It added that all contracts executed by the Government of Guyana, Public Authorities and State Agencies, shall now contain express clauses that would compel contractors to “repair and rehabilitate all damages or destruction” with the intent of restoring the property damaged as far as possible to the state it was in prior to the said damage or destruction.
“These clauses shall further provide that a breach of the aforesaid clauses by contractors shall empower and authorise the other party of the contract to assess the value of the damage or destruction caused, the public loss and inconveniences suffered thereby and the cost of repairing and rehabilitating the said damage or destruction in the manner aforesaid; and the total value thereof shall be deducted from or levied against performance or other bonds lodged, retention securities provided, or from payments due under the contracts,” the release stated.
Under Article 32 of the Constitution of Guyana, the state is mandated to protect and maintain public property.
Previously, Attorney-General and Minister of Legal Affairs, Anil Nandlall, had said that such a move would be in keeping with the People’s Progressive Party Civic (PPP/C) government’s dedication to ensure contractors adhere to their contractual obligations and deliver the expected results.
“These are contractors who are issued with contracts from the government and, for whatever reason, have been breaching those contracts causing tremendous delays in the execution and completion of public works across the country, stalling the government’s infrastructural development drive,” Nandlall said.
In order to tackle this problem, he stated that the Ministry of Finance has been given instructions to expeditiously carry out an audit to identify contractors who are not in compliance.
Once identified, this information will be transferred to the AG, who has been explicitly instructed to inform these contractors, enforce liquidated damages as permitted by contract terms, and commence legal proceedings for contract violation.
“We cannot continue to have contractors not discharging the contractual obligations in accordance with the contractual specifications. Government will not tolerate substandard work and breach of contracts from contractors who are paid billions of dollars to discharge their contractual obligations.”
He continued: “Contractors who are performing well and who are discharging their contractual obligations have no reason to worry. The delinquent ones, however, that delinquency will attract certain legal consequences and the government intends to move strongly and swiftly in that direction.”
Last year, the government terminated the Mineral Agreement and Mining Licence issued to Troy Resources Guyana Inc. (TRGI) and its affiliates, Troy Resources Limited and Pharsalus Gold Inc after it failed to address several critical issues, including unpaid royalties, rental fees, non-compliance with the work programme and environmental management concerns.
The Karouni Mineral Agreement, initially signed on October 16, 2014, was intended to facilitate the development and operation of a mining project at the Karouni Property. TRGI commenced operations in November 2015 but encountered operational challenges that led to an extended period of “care and maintenance,” beginning in early 2021.
Despite commitments to resume operations, TRGI failed to do so, even proposing the liquidation of its assets to the government. This proposal was rejected, primarily due to the delay in addressing outstanding financial obligations.
One of the significant issues leading to the contract’s termination was TRGI’s unpaid royalties totalling over $2.6 billion, which the government is actively seeking to recover through legal means.
Additionally, despite disapproval from the Guyana Gold Board (GGB) and suspension of TRGI’s exports owing to unpaid royalties, the Ministry of Finance, during the former APNU+AFC administration in 2019, allowed TRGI to resume exports, which further exacerbated the outstanding debt.
Since taking office in 2020, the administration has nullified several multi-million-dollar contracts owing to multiple breaches by contractors.
