Future of Specialty Hospital in limbo after World Bank blacklists contractor
The future of a planned Specialty Hospital at Turkeyen, East Coast Demerara, has been thrown yet again into limbo, after the Indian government said it could not support a controversial contractor which was
Signs of the times? -Nothing doing at the Turkeyen plot of land, East Coast Demerara.
recently blacklisted by the World Bank.
The company, Fedders Lloyd Corporation Limited, an Indian contractor, was selected late last year by the coalition Government as the alternate contractor after the previous one, Surendra Engineering Company Limited, was fired in 2014.
Fedders Lloyd was the second most qualified bidders for the US$18M project that had been initiated by the People’s Progressive Party/Civic government.
All seemed well with Fedders Lloyd and the Specialty Hospital contract until the World Bank debarred the company from participating in any work between April 6, 2016 and April 5, 2020.
Yesterday, Minister of State, Joseph Harmon, disclosed that the Specialty Hospital issue was raised by Minister of Finance, Winston Jordan on Tuesday during the weekly Cabinet meeting.
The Specialty Hospital, which would have offered Guyanese special medical procedures that normally would have to be done overseas, was to be funded from a US18M line of credit from the Government of India through its Export-Import Bank.
However, in late 2014, Surendra which had been facing flak for delays in another state contract involving US$4M in drainage pumps, was fired after government said that the company submitted fake bank documents.
Surendra was taken to court and a $900M judgment was handed down last year January.
According to Harmon, when the coalition government took office last May, it told the Indian government that it instead wanted the balance of money, some US$13.8M to improve three regional hospitals- at Bartica, Region Seven; Suddie in Region Two and the West Demerara Regional Hospital, Region Three.
The Indian government gave the assurance that it was prepared to fund the upgrade of the three hospitals.
Cabinet also granted its no objection to the continuation of the Specialty Hospital project and to the engagement of Fedders Lloyd Corporation as the contractor.
According to Minister Harmon, in June, the High Commission of India in Guyana wrote the Government informing that Fedders Lloyd had been debarred and was no longer eligible for the project.
According to the World Bank website, Fedders Lloyd apparently breach procurement guidelines in 2004 and then again in 2010.
Harmon disclosed that the Indian government made it clear that it wanted a fresh tender process to select an Indian contractor for the project.
“By this decision, the Specialty Hospital is again put on hold pending the completion of fresh tendering to select an Indian contractor,” the minister said.
According to Harmon, the Government of Guyana is worried about the US$13.8M balance as it is being significantly reduced by inflation, interest and other charges.
He said that as a result of these developments, the Ministry of Finance, Ministry of Foreign Affairs and Ministry of Public Health have been requested to “make certain enquiries” of the Indian government.
The findings, the Minister disclosed, will inform Cabinet on a definitive court of action on the Specialty Hospital.
Harmon also disclosed that the Attorney General Chambers is pursuing legal means to recover its $900M court judgment.
According to the World Bank website, the period of ineligibility of Fedders Lloyd Corporation Limited extends to any legal entity that they directly or indirectly control. The company is ineligible to be awarded bank-financed contracts for a period of four years.
Surendra itself is no stranger to controversy. After building the US$12.8M Enmore Packaging Plant, the former administration under President Bharrat Jagdeo then turned around and granted a US$4M contract to the Indian firm to supply 14 pumps to help reduce flooding on the coastland.
Diligent checks found that the company had no history in pumps. That contract is still mired in problems as Government has withheld some monies for spare parts not provided.
The announcement for construction of the 150-bed hospital was made in February 2011 by former President Bharrat Jagdeo when he returned from India.