President Dr Irfaan Ali today ordered that penalties outlined in a number of government contracts be enforced for companies that continue to default on their contractual obligations.
Following an early morning meeting with representatives of ministries and agencies responsible for awarding and monitoring government contracts, the Head of State also disclosed that a new unit will be established to ensure proper compliance by companies executing works for the State.
Specifically, the President met with engineers and project managers from the Ministries of Public Works and Housing to discuss the status of major infrastructure projects.
These include the Cemetery Road project which is being executed by Avinash Construction and Metal Works Company, the Conversation Tree Street project awarded to Kalco Guyana Incorporated and Jagmohan Construction and General Supplies, the Diamond to Buzz Bee Dam highway project, and all four-lane highways.
The project updates were provided to the Attorney General and Minister of Legal Affairs, Anil Nandall who has been tasked with issuing letters of notice to defaulting contractors.
Additionally, the Ministry of Finance was tasked with calculating the liquidated damages.
Liquidated damages refer to a provision allowing for the payment of a specified sum in the case of a breach of contract. In this case, the President says the government will go after those defaulting contractors that have gone past their project deadline and the justifiable extensions.
“All projects beyond the contracted time, where we have exhausted justified extensions, (we will) issue a letter today instructing that the liquidated damages be instituted immediately. We cannot tolerate this,” President Ali said.
Further, the Head of State disclosed that actions must now be taken to strengthen project management teams in the public sector.
As a result, the Attorney General’s office will now have a specialised unit dealing with contracts and project management, as part of efforts to ensure compliance.
President Ali noted that all project managers and senior engineers under this unit will be properly qualified.
“We are adopting a no-nonsense approach in contract management. We are going to have an independent team managing and reviewing project files so that we have project audits. As project engineers and project managers, you have to ensure that your files are updated, your minutes are recorded and signed. As we take action, we have to get paper work intact,” the Head of State emphasised.
Delays
The contract for the Cemetery Road project was awarded in 2022, and caters for the construction of a two-lane carriageway being extended into four lanes. This is expected to significantly alleviate traffic congestion in the area. However, the project has suffered significant delays due to procurement challenges, resulting in the prolonged execution of the project.
The Conversation Tree to Dennis Street project was also awarded in 2022, with a stipulated deadline of November 5. This project involves the construction of a four-lane carriageway from the East Coast Highway at Conversation Tree to Delhi Street. It also includes a double-lane carriageway on the reserve west of Delhi Street for northbound traffic, and installation of concrete revetments between the East Coast Demerara Highway and the Railway Embankment.
The project was split into two lots: Lot 8A of the project was executed by S. Jagmohan Construction and General Supplies Inc to the tune of $$1,066,358,738, while Lot 8B was awarded to Trinidad company Kalco Guyana Inc to the tune of $830,293,458. Kalco has been behind schedule, with its last progress report hinting that 25 per cent of the work has been completed.
