Provision made in 2018 budget for renting of Sussex St bond

The Sussex Street bond

Despite the Ministry of Public Health having stated its intention to end the contract for the rental of  the controversial Sussex Street bond, Minister Volda Lawrence confirmed last night that budgetary allocations have been made for its rental for the entire year of 2018.

During the consideration of the 2018 budget estimates yesterday, PPP/C Member of Parliament Dr Frank Anthony questioned Lawrence on what the budgetary allocation for the line item 6241 (Rental of Buildings) under the Policy Development and Administration Pro-gramme, at a total sum of $180.3 million, was going towards.

Lawrence subsequently explained that the figure was budgeted to cater for the rental of four buildings. She further explained that a building was being rented for the Chief Medical Officer (CMO) at a rate of $25,000 per month, a building in Queenstown for displaced staff from a health facility at Liliendaal at a rate of $1.5 million per month, another that is pegged at 1.5 million but is still to be negotiated, and the rental of the Sussex Street drug bond at a rate of $12.5 million per month.

Opposition Member Vishwa Mahadeo subsequently rose and questioned whether the sum was budgeted for the entire year, to which Lawrence said yes.

However, she then explained that it is the Ministry’s intention to bring the contract to an end by the end of the year.

“As we speak right now it seems that we may go over another two months because we are storing the CT scan for Bartica there,” Lawrence said, while explaining that the place to house the CT scan is still 55% completed.

Mahadeo then questioned why budgetary allocations were made for the entire year when the Ministry only expects to be using the drug bond for approximately another two months, which he said would leave some $125 million unspent.

The Ministry’s entire budgetary allocation of $23.45 billion was then subsequently approved by the Committee of Supply. 

In September this year,  Lawrence told Stabroek News that the rental of the Sussex Street drug bond wasn’t expected to be renewed beyond December 31, 2017, as she said that the government is still aiming to cease the use of all private bonds by that time.

Lawrence’s pronouncement then had come in the wake of the concern expressed by opposition parliamentarian Anil Nandlall that one year after the scandal over the rental of the property, the contract was yet to be terminated.

Despite the controversy over the rental of the property, the Ministry budgeted $150 million for the full year’s rent for 2017.

Asked in September if there is any possibility of the drug bond contract being renewed, she reiterated that by the 31st of December, “our aim is not to be using any private bonds.”

Controversy erupted last year after it was revealed that government was paying businessman Larry Singh, of Linden Holding Inc., a monthly rental of $12.5 million for the building at Sussex Street to store drugs.

A Cabinet subcommittee was convened after former Public Health Minister Dr. George Norton had been found lying to Parliament in relation to the rental of the bond.

The subcommittee’s report  had stated that the lease should be revisited and strengthened and if there was 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 had said.

Over a year ago, the government in response to the subcommittee report said that the lease was “undoubtedly undesirable” and that it would consider shortening it while expediting the search for another facility.

The rental was only made public following questions posed by Nandlall in the Committee of Supply in August, 2016. At that time, he reminded that over $50 million had already been paid in rent but the bond was never used.

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.

 

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