PPP/C MP Juan Edghill yesterday wrote the Chairman of the Public Procurement Commission (PPC), Carol Corbin calling for an inquiry into the government’s renting of a property in Charlestown for the storage of drugs.
The $12.5M per month deal in 2016 between the government and businessman Larry Singh – who has had a long association with the PNC – had raised ire on three grounds: whether there was need to rent a bond, what qualified Singh to rent such a facility to the government and how did he know that the government was in the market for a bond.
Despite expectations that the deal would have been terminated, up to last month, the government was still paying the monthly rental though it still has not provided convincing information that the bond was needed.
In his letter to Corbin which was released to the press today, Edghill sought an investigation under Article 212 AA of constitution which deals with the functions of the PPC. Noting that the government continues to rent the Sussex Street, Charlestown facility, Edghill raised several queries and requests.
- Who made the decision to sole source and under what circumstances?
- What was the emergency need referred to by the Minister?
- How was the company’s primary director, Larry Singh, made aware that a drug bond was needed? How was the Linden Holding Inc engaged to ink a contract?
- How was a contract for a bond for the storage of pharmaceuticals and medical supplies sole sourced from an entity that did not own and /or operate such a facility?
- Why did the contract stipulate rental of “office space” and not rental of a pharmaceutical bond?
- Was this price fair as it relates to market value for similar such facilities?
- Are the taxpayers getting value for money?
- Is this contracted facility operating according to WHO/PAHO standards for facilities used for the storage of pharmaceuticals and medical supplies?
- Identify what breaches took place in the procurement process
- Identify any recommendations for remedial action and preventative measures for its recurrence
After the controversy over the bond erupted in August, 2016, Cabinet set up a sub-committee which recommended an early termination of the five-year contract. However, to date there is no evidence to suggest that this contract has been terminated or is nearing termination.
The Cabinet sub-committee had been convened after former Public Health Minister Dr. George Norton had been found lying to Parliament in relation to the drug bond.
The subcommittee’s report has stated that the lease should be revisited and strengthened and if there is a refusal by Linden Holding Inc, the landlord, 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 subcommittee’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 added 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 subcommittee added that the agreement could be strengthened with more specific terms that address insurance and maintenance.
The rental was only made public following questions posed by PPP/C MP Anil Nandlall in the Committee of Supply in August, 2016. At that time, he reminded that over $50M had already been paid in rent but the bond was never used.
Subsequently he said, no tablets were found in the bond when an inspection was done by a team of Members of Parliament following a dispute on the floor as to whether the facility was in use. The visit occurred during the 2016 Budget Debate.
“The nation’s taxpayers have so far lost nearly 200 million dollars in the process and the Treasury continues to bleed at 14 million dollars month. Yet we are told that we cannot afford to offer subsidies to our pensioners in relation to water rates and electricity bills; we are told that we cannot afford to remove VAT from private education for our children, medical supplies for our sick, educational supplies for our students, agricultural and mining equipment for our farmers and miners; we are told that we do not have money for the sugar industry so tens of thousands of people are being put on the breadline”, Nandlall told Stabroek News last month while adding that this “waste” of taxpayers’ dollars joins a long list of similar or more egregious expenditure of public funds at the hands of the Granger-led government.
The deal with Singh to rent the Sussex Street property for use as a drug bond was said to have been initiated by the APNU+AFC government because extra storage capacity for drugs was needed. This was despite that fact that a government bond existed at Diamond on the East Bank where more pharmaceuticals could be stored.
Singh had never run a bond storage operation before and critics have said the deal appeared to be a sweetheart arrangement to give business to a PNCR supporter. There have been many questions as to how Singh was chosen given the fact that there was no public tendering for the rental of that building.