MINISTER of Parliamentary Affairs and Governance, Gail Teixeira, has called for a special audit of the $356.826 M contract awarded for the construction of the Health Ministry’s headquarters.
She made this request on Monday during a sitting of the Public Accounts Committee (PAC) at Public Buildings where the 2019 Auditor-General’s report for the Health Ministry was examined.

Chung’s Global Enterprise was awarded the contract in 2017 by the APNU+AFC administration to construct the Health Ministry’s head office building at Lot 1 Brickdam, Georgetown, for $356.8M.
Construction began on July 19, 2018, with an expected completion date within a year.

However, by September 2020, despite receiving $304.543 million and being granted two extensions, less than 70 per cent of the works were completed.  According to the Auditor General’s report, this amount included an advance payment of $71.365M. Only $36.549M of the advance payment was recovered at the time. The validity of the Advance Payment Guarantee could not be verified and seven payments totalling $233.178M were without valuations.
“Amounts totalling $33.330M were included in $233.178M for ‘variation works’. Approval or breakdown of works were not seen. There were lump sum payments for four items amounting to $26.408M and verification of variation works could not be done.
Forecasted completion cost was $870.208M, which is over the original contract sum by $356.826M. The performance bond was not submitted,” according to the Auditor General’s findings.
The PPP/C government subsequently terminated the contract in 2020, citing several breaches, including the lengthy delay in the completion of the building and the increase in prices on the bill of quantities for contract variations, which significantly increased the estimate for building construction by $513 million.

“A MESS”
Minister Teixeira sharply criticised the handling of the contract, describing it as a “mess” that necessitates immediate attention and thorough investigation.
“Was it an open tender? The contract was signed in July 2018, although the contract was awarded in November 2017. What happened? What transpired between 2018 and 2020? Were there cost overruns and incomplete work…in fact bad work done? Were there letters written to the contractor? Were they reprimanded? Were the engineers signing off on these additional costs without verifying what was going on?” she questioned.
“This is a mess. And in fact, it has cost us more now. Since 2020, more money has had to be poured into it to rectify works as well as to complete the work of the headquarters.”
In response to the minister’s question, Permanent Secretary (PS) of the Health Ministry, Malcolm Watkins said that in 2020, “what we inherited was pretty much a structure that was unfinished and an existing contract that was valued about $356 million.” According to him, Chung’s Global Enterprise was demanding over $850M to complete the building.

“So, therefore, there was some issue of underbidding,” Watkins said, adding that the contract was finally terminated and a fresh tender was held to select a new contractor.

He stated that the new contractor took over the project and “brought us to a functional building by July 2023.” We subsequently moved into the building, which is now operational. Watkins reported that the final cost of the Health Ministry headquarters building is close to $900M.
An official from the ministry informed the PAC that the scope of work had changed to include site preparation, offices, and bridge construction and the installation of two 450-gallon water tanks, among other things. The original contract cost was 35 per cent less than the engineer’s estimate.
These changes were approved, he emphasised. Moreover, the Health Ministry’s PS said that despite being overpaid $4.8M, Chung’s Global Enterprise satisfied works to the tune it was paid.
Minister Teixeira consequently suggested that the Auditor General’s Office conduct a special audit of this project from inception to completion. Her recommendation was supported by the PAC. She noted that this project is a violation of the country’s financial and procurement rules that should not be condoned. In terms of actions taken by the ministry, it has stated that every effort would be made to ensure that this situation does not occur again, that it has the performance bond, and that efforts are being made to locate the advance guarantee.