No law was broken in government’s holding company NICIL’s funding of the ill-fated High Street project with the funding for the project being approved at the parliamentary level, the entity’s Executive Director Winston Brassington has said.
A forensic audit into the National Industrial and Commercial Investments Limited (NICIL) had found that $350M in public funds was expended on the High St building, where the former Guyana Broadcasting Corporation (GBC) once stood on Princes and High streets. Though the project began years ago, it is not completed and its fate is unclear.
The audit report had said that at NICIL’s board meeting of 16 August 2007, Brassington inform-ed the Board that the handing over of the site took place earlier in the day. The minutes recorded then Finance Minister Ashni Singh as having agreed that “there should be no press release as this might draw attention to NICIL’s spending when ideally (it) should have been the expense of central Govern-ment.” Singh was chairman of NICIL’s Board of Directors at the time.
“This is quite an extraordinary statement coming from the Minister and is a clear acknowledgement of the improper use of NICIL’s funds,” forensic auditor Anand Goolsarran had commented.
At a press conference on Monday, Brassington dismissed Goolsarran’s statement.
“There was no nexus between the isolated statement used and a law that has been broken. NICIL owned the land having paid the valuable consideration for it at the time of the merger of GTV and GBC and the relocation of the GBC operations to its current location. In both sugar GuySuCo and Bauxite (Guymine, Linmine and Bermine) companies have many similar arrangements,” he said.
NICIL’s head criticised Goolsarran’s usage of minutes from board meetings to draw a link between what was said and any evidence of wrongdoing on the part of NICIL. There was no nexus between the isolated statement used and a law that has been broken, he said.
The contractor for the project was the Kishan Bacchus construction company. The report had said that it is evident that the Ministry of Labour and NICIL failed to ensure that the contractor executed a valid performance bond against which recoveries could been made for any overpayment as well as defective and incomplete work performed.
The report also pointed out that with the firm owing government tens of millions, in spite of the substandard work done, Singh urged that $51 million of work be identified for the contractor to do rather than seeking to recoup the money owed.
Brassington defended this saying that Bacchus had presented a CLICO bond as part of his contractual obligation. “On the appointment of a judicial manager during the CLICO downfall, all business and insurance coverage was terminated/suspended. As such, to minimise any exposures due to this fall out and given other factors including the contractor’s performance, the recommendation was made to have the contactor return the value owed to NICIL in works,” he said.
He charged that the audit used extracts from the minutes of the Board meetings without sufficient explanation and, as such, it could be perceived that Bacchus did not provide bonds while working on the project, while he had in fact, done so. He said that a call on the performance bond would have been a call on the government to pay the bond since CLICO was financially unable to honour the bond thus it would have fallen on government.
According to Brassington, due to the changing needs of the various parties, Bacchus’ contract was discontinued.
Brassington further said the building changed hands multiple time before finally becoming the property of the Guyana Geology and Mines Commission and the specifications needed to be redesigned on multiple occasions. He said throughout the process, the project was under the professional and technical supervision of Orin Hinds and Associates, Marcel Gaskin, Monty Marshall, among others.
The Goolsarran report had said that the role of the engineering supervisor needs to be called into question and highlighted the fact that the consultant was hired without tender.
“It is not clear why the consultant was not selected on the basis of competitive tendering and who initiated arrangements for his hiring…the consultant was retained to supervise the work of the contractor. The end result is that some $350 million of public resources has been wasted,” the report said.
Meantime, Brassington said he was unaware that the building is set for demolition as stated by Goolsarran. “While the construction of 44 High Street was aborted, NICIL, to the best of its knowledge is no aware of any policy decision to tear the building down due to floors not being built to specifications. It is disappointing that the forensic auditor came to this conclusion without asking or seeking clarification from NICIL on the issues surrounding the construction of 44 High Street,” he said.
Goolsarran had recommended criminal charges and/or disciplinary actions based on the decisions made by NICIL and government officials.
Stabroek News had reported previously that the complex was built in 2008 and has since been the source of much controversy due to defects in construction. It was at one time billed to be the head office of the GGMC. The GGMC had invited and evaluated bids for completion of the building but contention over the award last year saw the project put on hold and garnering the attention of Cabinet.
Among the defects, it was reported that the building’s foundation contained sub-standard material and the contractor had carried out works on the foundation and on the interior of the building that were in excess of contractual specifications. It was also disclosed that the ceiling of the building was improperly designed and as a result the placement of air vents and roofing works would have resulted in limited vertical space and the situation would need to be rectified.