Fedders Lloyd MOU raises question of Ramjattan’s influence -TIGI

Despite his denial, the MOU for Fedders Lloyd to continue work on the Specialty Hospital without the project going back to tender and outside of the Procurement Act, raises the question of whether Vice President Khemraj Ramjattan’s influence was brought to bear in the decision to award the contract, the Transparency Institute of Guyana Inc (TIGI) has said.
“TIGI has no reason to disbelieve the Vice President when he stated that there was no client relationship with Fedders Lloyd and that he acted in the public interest against what he considered an injustice. However, the fact that the continuation of the works on the Specialty Hospital was awarded to this company via an MOU without going back to tender and without legal support from the Procurement Act, raises the question as to whether the Vice President’s influence might not have been brought to bear in the decision to award the contract,” the transparency body said in its column in the Stabroek News on Tuesday in which it noted that the furore raised concerns about conflict of interest involving Ramjattan.
Ramjattan had advocated on behalf of Fedders Lloyd after it lost out in the original bidding process.
“The Vice President has denied that he had any involvement in the decision but later on went on to defend the Government. It would have been better if he had not said anything further on the matter,” TIGI added.
The APNU+AFC administration has been criticised for its handing of the project to Fedders Lloyd without going to tender and government officials have trotted out a variety of reasons for the selection of the company without a tender process. The government of India had provided a US$18M line of credit for the project but after the first company Surendra Engineering was fired from the project, about US$13.6M remained.
Initially, the Ministry of Finance said that government had approached Fedders Lloyd “in the interest of time,” to undertake the completion of the project. Subsequently, the Ministry said that Fedders Lloyd qualified to be selected by virtue of the firm having been one of the two bidders that were in contention for the original project under the former PPP/C government.

Disqualified

However, the evaluation report obtained by Stabroek News shows that company was disqualified from the process and questions have been raised about why the Ministry would mislead the public since the evaluation report would have been available to the APNU+AFC administration.
Subsequently, Ramjattan said a provision in the contract for the specialty hospital allows for government to employ a third party to complete the project in the event of fraudulent practices by the original contractor and it was under this clause that Fedders Lloyd was chosen to finish the project. Observers however note that such a contract cannot supersede the law.
Among the critics of the government for its handling of the project was former president of TIGI Calvin Bernard who had said the circumstances warranted retendering the project. Former Auditor General Anand Goolsarran had also said the MOU inked by government with Fedders Lloyd to complete the specialty hospital should be cancelled and the bidding process restarted.
Meantime, TIGI also pointed out in relation to the significant salary increases for cabinet ministers by the very cabinet, the situation could be viewed as one of conflict of interest, and it would have been more appropriate for a body with no connection with members of the Cabinet to make that determination.
“TIGI is of the view that the Government should have awaited the outcome of the deliberations of the Commission of Inquiry set up to, among others, review to emoluments and conditions of service of the Public Service before deciding on salary increases for its Ministers. Perhaps, this very Commission could have been tasked with the responsibility of making recommendations for ministerial salary increases since its proposals for reform of the pay and grades for public servants could have been used as an important reference point. As it stands, the salary increases for Cabinet Ministers are arbitrary and have no sound basis for their determination,” it said.

Bonus

It noted that the recently announced $50,000 bonus for public servants earning less than $500,000 per month could be seen as appeasement for its action in relation to the salary increases of Cabinet Ministers. A bonus is an incentive for good performance, and therefore the Government needs to reflect on what other incentive it can offer to public servants earning more than $500,000 per month, the transparency body said.
It also highlighted the conflict of interest involving the audits of government’s holding company NICIL’s accounts and noted that both former President Bharrat Jagdeo and NICIL’s Executive Director Winston Brassington have boasted that NICIL has been receiving unqualified audit reports and therefore nothing is wrong as regards the financial management of the entity and its financial reports.
However, this assertion is at complete variance with the results of the recently concluded forensic audit of the entity, TIGI said, while also pointing out, among other things, that the spouse of the former Chairman of NICIL had overall responsibility for the audit of NICIL while the same chairman instructed that the audits of all public corporations vested in NICIL be contracted out to Chartered Accountants in public practice but the audit of NICIL must remain with the Audit Office where his spouse holds the number two position.
The transparency body also called for the release of audits commissioned by the APNU+AFC government into a number of agencies.

Forensic audits

It highlighted a Stabroek News editorial which pointed out that some $133 million would have been expended in the conduct of numerous forensic audits of government agencies and department; several of these audits have been completed some ago; and the Government is yet to deliberate on them.
TIGI pointed out that there is there is no official release of the results of the audits and questioned whether the reports of other Commissions of Inquiry (COI) would be available for public scrutiny. In this regard, it cited the COIs into the sugar industry, the one into the death of Walter Rodney and the one into the Public Service which is now underway.
“Suffice it to state that to the extent that the above reports are not made available for public scrutiny, some of those persons in possession of them may feel hard pressed to release the contents to the media, considering the effort they might have put in into the studies as well as out of concern for the public interest. Even if this does not happen, we have seen a growing degree of unauthorized access to the emails and computer files of persons and organisations, and some of the reports may very well find themselves in the public domain through this medium,” TIGI declared.

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