Government yesterday said that the arrangement for a pharmacy bond on Sussex Street with businessman Larry Singh of Linden Holding was “undoubtedly undesirable” and several options are being looked at including shortening the lease and the state will now secure its own facility.
The about-face on the Linden Holding deal came after weeks of searing criticism of the arrangement which was revealed in Parliament on August 8th following intense grilling of Health Minister Dr George Norton by the opposition PPP/C.
While the imminent reversal of the deal is an embarrassment to the APNU+AFC government, critics say the climb down still does not answer the question of who in the administration engaged Singh for the contract when he had no experience in storing pharmaceuticals neither did he have an appropriate building. With the question unanswered, critics say there would be doubt about the government’s commitment to transparency even though it yesterday recommitted itself to vigilance over contracts and restated that Norton had taken responsibility for the “imbroglio”.
In the statement from the Department of Public Information, the government said that
Cabinet had been engaged in full and thorough discussions on the issue of the storage contract.
“Cabinet has concluded that the arrangement was undoubtedly undesirable”, the statement said adding that Cabinet also considered the options and recommendations in the report of the Cabinet Sub-Committee which had been tasked with reviewing the decision of the Ministry of Public Health to lease facilities at Singh’s Sussex Street premises.
The statement said that Cabinet considered a range of options including shortening the lease period for the rental of the Sussex Street facility while speeding up the search for another facility. It said that the Government has agreed to secure its own pharmaceuticals storage facility and is assessing suitable sites. The statement also said that the options of purchasing, constructing or leasing will also be explored but added that the conditions for the storage facility being in close proximity to the Georgetown port and easily accessible remain applicable.
“Though it has, out of necessity, taken some time to arrive at these decisions, Cabinet is satisfied that significant advances have been made on this matter and when the full menu of actions is completed, the best arrangement, in the interest of the people of Guyana, will be concluded”, the statement asserted.
It added that Cabinet noted that Norton had taken responsibility for the imbroglio and had publicly expressed regrets over the controversy. Norton has deflected questions on whether he was the fall guy for this deal.
“Further, the Government recommits itself to managing the affairs of the state in a transparent and accountable manner and to respect public opinion at all times.
“Cabinet recommitted itself to be vigilant with regard to all contracts and arrangements and assure the people of Guyana that efforts will continue to strengthen the delivery of health care services which, for too long, have been held hostage by close friends and cronies of the previous administration”, the statement declared. The latter remark was a clear reference to the sole-sourcing that had been engaged in by the former PPP/C government with the New Guyana Pharmaceutical Corporation (NGPC). Ironically, it was the intention to switch pharmaceuticals storage from NGPC to Singh’s Linden Holding which tripped up Norton and the government.
The statement also said that Cabinet acknowledged the frank expression of views by a wide cross section of the Guyanese society which it “respects as vital to true participatory and inclusionary democracy”.
A range of voices had been scathingly critical of the deal including transparency advocate and former Auditor General Anand Goolsarran. He had told Stabroek News that government needed to urgently address the issue of who recommended Singh for rental of the bond. He also stressed that Permanent Secretary of the Ministry of Health, Trevor Thomas’ refusal to comment to Stabroek News on the issue could not suffice as his signature is on the contract and he should be upholding the laws, especially pertaining to his role.
Goolsarran added “I am really sad, I am really disappointed, I am really angry at the turn of events. Some of us fought so hard against bad governance, lack of transparency in the operations of government, and lack of proper accountability, only to be treated as enemies of the State.
“It is indeed in the height of hurtfulness that our efforts are being negated each passing day by a government that appears not to care anymore and that, by its actions, now sends the clear message that ‘it’s our turn now’”.
As the controversy raged, on August 26th Norton apologized for misleading Parliament on several aspects of the deal.
At a press conference at Parliament, he offered his “sincere and profound regrets” to President David Granger, Prime Minister Moses Nagamootoo and Speaker of the National Assembly Dr. Barton Scotland along with his parliamentary colleagues from both sides and others who were present in the Committee of Supply at the time the false answers were given.
“I take full responsibility for this unfortunate episode…” the Minister said while committing that it would “not happen again.”
The false information given following questions from the opposition included that the bond was already occupied and that the Government was paying the New GPC over $19M a month in rental fees. The Minister had said at the time it was because the Government wanted to save monies that it sole-sourced the bond from Singh for $12.5M per month. However, it was later revealed that the bond was still undergoing renovation at the time and the Government had not yet paid New GPC.
On August 10, as numerous questions arose about the deal, President Granger announced that he had appointed a Cabinet Sub-Committee to review, examine and report on the storage of medicine and medical supplies. The appointed of this sub-committee was ridiculed by Goolsarran and others who said that a sub-committee could not be tasked with probing a decision that had been made by the full Cabinet.
And while the full Cabinet nixed the deal yesterday, its sub-committee which included Prime Minister Moses Nagamootoo and Minister of Natural Resources, Raphael Trotman had justified the leasing of the Sussex Street bond for the storage of drugs but recommended that government should try to negotiate a reduction of the agreed $12.5M monthly rental fee.
According to the sub-committee’s report, the lease should be revisited and strengthened and if there is a refusal by Linden Holding Inc, government should give a year’s notice of a termination of the lease and build its own facilities in the intervening period.
“With respect to the rental sum of $12,500,000 it is the sub-committee’s considered opinion that the value should be re-assessed as it is likely that a similar facility could be obtained at a lower rate,” the report said.
It adds that the general terms of the lease “are not altogether unfavourable” to the Ministry of Public Health as the lessor is obligated under the agreement to maintain the facility at a standard that will meet national and international specifications for the storage of drugs and pharmaceuticals.
However, the sub-committee added that the agreement could be strengthened with more specific terms that address insurance and maintenance.
Singh’s known ties to the PNCR, the main component of APNU, and his appearance at the recent PNCR’s congress had added fuel to concerns that he had been improperly sole-sourced for this contract because of his connections to the party and its officials. It is now left to be seen how much longer the government will maintain the monthly lease for the Sussex St premises.