–as government looks to penalise contractors for failing to meet contractual obligations

PRESIDENT, Dr Irfaan Ali, on Wednesday instructed all relevant ministries and agencies to issue letters for liquidated damages to contractors for delayed projects.

The Head of State on Wednesday held an early-morning meeting with stakeholders at State House where he instructed the country’s Finance Minister, Dr. Ashni Singh; Attorney-General, Anil Nandlall, S.C., and Public Works Minister, Juan Edghill to begin the process of issuing letters to ‘non-performing’ and defaulting contractors who have gone past their project deadlines and justifiable extensions.

“All the projects that are beyond the contracted time, where they have exhausted justified extensions we will issue a letter today instructing that the liquidated damages be instituted immediately. We cannot tolerate this…liquidated damages must be instituted,” the Head of State stressed.

Currently, several massive infrastructural projects are underway across the country. These include the rehabilitation of small community roads and the construction of major highways and bridges, among other initiatives geared at improving the lives of all Guyanese.

In some instances, justified extensions were granted to contractors; however, delays were persistent on some projects.
One such project, the long-delayed Cemetery Road upgrade in Georgetown, has faced significant setbacks.
Minister Edghill had announced that the contractor, Avinash Constructing and Scrap Metal Inc., must complete the project by the end of March 2024 or face contract termination.

The project, initially slated for completion by the end of January 2024, has faced extensions and delays, raising concerns about the contractor’s ability to deliver.
Recently, Attorney General and Legal Affairs Minister Anil Nandlall outlined the Cabinet’s decision to enforce contractual clauses swiftly and rigidly in cases of breaches or unexplained delays.

“Government will not countenance negligence from contractors. Government will not countenance delinquency. Government will not countenance breaches of contractual obligations. These contracts are multimillion dollars in nature.

“So, it’s not a question of contractors not making money. There are cases where a delay may be justified, or a breach may be justified,” Nandlall said during a recent broadcast of his Facebook programme “Issues in the News”.
These clauses, he noted, include penalties such as liquidated damages and the option for the government to terminate contracts and sue for damages.

Liquidated damages are an exact amount of money, or a set formula to calculate the amount of money a party will owe if it breaches a contract or fails deliver on a contract.

While acknowledging that some delays or breaches may be justified, Nandlall stressed that each case would be evaluated individually. He had clarified that the government’s intention is not to unjustly penalise contractors, but rather to ensure compliance with contractual obligations.