In a move to enforce accountability and ensure timely project completions, the Government has ordered over 60 defaulting contractors to pay liquidated damages to the Public Works Ministry. The action is part of a wider crackdown aimed at addressing delays and subpar performance in the construction sector, which has seen increasing frustrations due to missed deadlines and poor-quality work.
The contractors in question have been involved in various public infrastructure projects, including roadworks, building constructions, and other critical developments. These projects, intended to improve the country’s infrastructure, have been stalled or delayed due to the contractor’s failure to meet contractual obligations.
Liquidated damages refer to a provision allowing for the payment of a specified sum in the case of a breach of contract. Based on the value of the contracts, the percentage of the liquidated damage is calculated. This can range from 0.1 per cent up to 10 per cent of the contract sum.
One such sanction is imposing liquidated damages, which is money collected by the Government for contractual breaches.
According to Public Works Minister Juan Edghill, “more than 60 contractors have to pay liquidated damages” but this is out of some 5,000 contractors hired by Government to execute works.
The Minister, who was at the time responding to questions from media operatives during the End of Year press conference on Saturday, disclosed that non-performing contractors in the industry is less than one per cent.
Edghill explained that several challenges plaguing the construction sector, including limited workforce, shipping delays and logistic and supply chain shortages are taken into consideration before stern action is taken by Government.
Nevertheless, he noted that in some cases, the Ministry has had to write the National Procurement and Tender Administration Board (NPTAB) to blacklist delinquent contractors.
“The Ministry doesn’t blacklist contractors. It’s the National Procurement and Tender Administration Board, or the procurement commissions that have the authority to do that. But what the Ministry does is that when we are dissatisfied or we have what is called poor performance or bad performance, we notify those entities and they need to take a particular action,” the Minister said.
“And as a member of cabinet who still have a right to object, because contracts come to cabinet for no objections. If we know that we have a non-performing contractor and it comes to an objection, we have a right to say we’re objecting, and then the tender board would have to take the necessary action from there,” he added.
In 2024, the Ministry of Public Works (MoPW) managed over 4500 public infrastructure projects, engaging small, medium and large-scale contractors from across Guyana.
This included the $475 million Cemetery Road Project, 21 contracts for 2.7 kilometres (km) of concrete roads, and 10 contracts for 9.8 km across all sub-districts in Region One (Barima-Waini). Additionally, seven contracts covered 35 km of laterite road in Region Seven (Cuyuni-Mazaruni), while 42 contracts addressed 2.5 km, alongside 66 community participation contracts for roads in Region Eight (Potaro-Siparuni).
In Region Nine (Upper Takutu-Upper Essequibo), seven contracts provided 350 km of laterite road and 1.5 km each in four main villages. In Region Ten (Upper Demerara-Berbice), 21 contracts spanned 14.6 km, 16 contracts covered 1 km in Kwakwani, 32 contracts accounted for 2 km in Ituni, and 31 contracts were issued for 2 km in Coomaka.
Last year, the Ministry received its largest appropriations as a Government entity, starting with an original or approved appropriation of $236.1 billion, of which $224.892 billion were capital appropriations.
However, at the end of 2024, the Ministry had a revised budget of $245.13 billion.
Total expenditures represented $12.5 billion in current expenditure and $222.092 billion capital expenditure was recorded. Of that number $175.6 billion was expended locally and $46.4 billion was expended for foreign-funded projects.
