…sends formal notice of termination of contract
S Maraj Contracting Services, the contractor whose $413 million contract to repair the deplorable Leguan Stelling was recently terminated, has been ordered by the Government to forfeit all payments due and to clear the site, with the threat of legal action hanging over its head.
According to a letter seen by Inews, Attorney General and Senior Counsel Anil Nandlall wrote to Sattrohan Maraj of S Maraj Contracting Services, reminding him that despite the company being granted several extensions, a project that was supposed to be completed by June 18, 2019, is still not complete.
In fact, Nandlall pointed out that despite the extensions granted by the Transport and Harbour Department (T&HD), the project has been delayed for approximately 20 months. And according to the AG, the company has only completed a minimal amount of the scheduled work.
“As a consequence, your company has committed a fundamental breach of the terms of the contract and as a result thereof, the Government of Guyana hereby exercises its right to terminate the contract with immediate effect,” the letter said.
Nandlall further pointed out that the Government will enforce contractual provisions to reclaim the performance bond of $43.3 million; the mobilisation bond of $81.3 million; 10 per cent of the contract sum and the value of works not performed.
“In addition, the Government of Guyana reserves its right to institute legal proceedings against your company for compensation for breach of contract and unjust enrichment. Please arrange to have the site cleared immediately,” Nandlall further informed the contractor.
This comes just days after Public Works Minister Juan Edghill had announced that the contract for the Leguan Stelling would be terminated, owing to the contractor’s inability to complete the project.
The Minister and his team had met with residents who echoed their concerns about the slow pace at which the project is being done. On this note, Minister Edghill had stated that the contractor would have applied for an extension to complete the project but he posited that it is unacceptable.
However, in a subsequent release issued by the Minister, he stated that on February 19, he met with the contractor along with a team from T&HD and was guided by the special report on the rehabilitation of the Leguan Ferry Stelling conducted by the Audit Office of Guyana.
Based on the Audit Office report, it was determined that the contractor, S Maraj Contracting Services, is incapable, unable, and does not possess the wherewithal to successfully execute the project.
The contract with S Maraj Contracting Services was signed on September 20, 2018, under the leadership of David Patterson, the then Minister of Public Infrastructure as it was named under the A Partnership for National Unity/Alliance For Change (APNU/AFC) Government.
The contractor would have received $199,435,000 in payments. This is outside of the normal procurement practices and a breach of the Fiscal Management Accountability Act, a breach the audit report highlighted. Presently, actual works and materials on site are estimated at about $100 million.
This is only the latest in a series of contracts the People’s Progressive Party (PPP) Government has had to come in and revoke from recalcitrant contractors. Other contracts are already being litigated.
Last month, the Government instituted a lawsuit against Courtney Benn Contracting Services Limited and Caricom General Insurance Company in which it is seeking in excess of $413 million in damages in relation to the breach of contract for the rehabilitation of the St Rose’s High School.
The Government has also taken BK International and the North American Fire and General Insurance Company (NAFICO) to court over breach of contract in the construction of the Yarrowkabra Secondary School. The Government is seeking over $717.8 million in damages.
