President Donald Ramotar yesterday defended the decision to award controversial developer Fip Motilall the contract to build the road to Amaila Falls, saying that there were “probably” good decisions made at the time that turned out otherwise.
The government on Thursday announced that it had terminated the Amaila Falls Access road contract with the Fip Motilall-run Synergy Holdings Inc, citing the contractor’s failure to meet deadlines. The Works Ministry is taking steps to complete the project even as the administration moves to complete financing for the hydropower station to be built at the falls.
In his first press conference since being elected President, Ramotar told reporters at the Office of the President yesterday that while he did not have the figure as to how much Motilall was paid, Guyana’s exposure was limited. Asked whether he felt it was a bad decision to give Motilall the contract in the first place, the president said he could not condemn it. “I would not say that because I think everything has to be taken in context and at the time when these things were done they were probably good decisions that has turned out the way it turned out. I don’t think its grounds for me to condemn it,” he said.
The US$15.4 million contract had been at the centre of criticism from the inception, with questions being raised about the company’s ability to construct roads and to complete large projects. Motilall’s company was awarded the contract after undergoing a tendering process, the government said in 2007. On Thursday, Minister of Transport and Hydraulics, Robeson Benn said that as of December last, Synergy Holdings had completed only 40% of the works, “despite repeated urgings and interventions from the project engineer and the consulting firm to have the project completed.”
Benn said the termination will result in the application of liquidated damages at the rate of US$10,000 per day from January 1 to the date of termination as well as the seizure of the contractor’s existing performance bond and the firm’s retention sum. It will also result in the seizure and possession of all pieces of equipment and all other property used by the contractor for the project.
Asked by Stabroek News how much Motilall was paid, Ramotar said yesterday that he did not have the figures but “as far as I know our exposure has been limited because the arrangement was put in place beforehand to pay for work that was done, that we were only paying for work that was done. We were not paying for work that was not yet done.”
On Thursday, Motilall said that his company has not been paid for work completed. He said that the government owes his company more than US$1M for works undertaken in the area, while adding that some US$5.8M was the total sum paid to him thus far for the project. He said under the agreement, some US$1.5M was utilized for mobilization.
Ramotar noted yesterday that there was an advance to Motilall “and so forth” and said he did not want to be very specific on the sums because Motilall is saying that he is owed some money and he preferred to wait until this has been worked out before speaking on specifics. Technical details are still being worked out, he said. “I don’t think that we owe him money from the information that I have,” the President said adding that this will be known definitively in another few days. “What I know that the government had done was to try to limit its exposure and they were only paying for work that was done so whether we owe Mr. Motilall or Mr. Motilall owe us, we’ll find out about that very soon,” he said, while emphasizing that measures were in place to limit the exposure of Guyana as far as the contract was concerned.
Speaking briefly on the termination of the contract, the president said that in December there was a meeting with the contractor. “We had a new commitment from him because he was behind time. We had a new commitment that he would finish the road by the end of April,” he recalled. Some of the strategies explained to the authorities was that Motilall would sub-contract part of the road so that they would have less work to do in finishing the road on time but it was also premised on Synergy having a performance bond since the first one was about to run out, Ramotar recalled. “He promised to have one by the 10th of January which he couldn’t get and as a result of that the contract was terminated and we’re looking at new ways and means to move that project ahead,” the president said.
He said that work has started on the completion of the road. “My general guidance to Minister Benn was to work as fast as possible so that we will not slow down or stop our work on the road to the Amaila Falls,” the president stated.
Questioned on financing for the Amaila Falls hydropower project, Ramotar said that a lot of work was done and the deals are “very close” to being finalized. He pointed out that is why the completion of the road is important because “we don’t want to have the money already ready to be allocated, all the agreements there and then we will have to pay commitment fees for it while we can’t use it because the road is not finished.”
The contract awarded to Synergy was for “the upgrading of approximately 85 km of existing roadway, the design and construction of approximately 110 km of virgin roadway, the design and construction of two new pontoon crossings at the Essequibo and Kuribrong rivers.” The fourth part of the project was for the clearing of a pathway alongside the roadway to allow for the installation of approximately 65 km of transmission lines.
The Government of Guyana is funding the construction of the Amaila Access road, as part of its equity contribution to the entire Amaila Falls Hydroelectric Project.