Gov’t spent $265M for Sussex St bond’s rental over 21-month period

From July, 2016 to March of this year, the government’s rental of the controversial Sussex Street, Albouystown drug bond has cost nearly $265 million, Minister of Public Health Volda Lawrence has revealed.

Lawrence made the disclosure in a written response to a question posed by Member of Parliament Anil Nandlall, which was circulated yesterday in the National Assembly.

Nandlall had asked in May for the total sums paid to Linden Holding Inc. (LHI) for rental of the Lot 29 Sussex Street, Albouystown property, up until March 31st of this year.

The response indicated that between July, 2016 and March, 2018, $264,500,000 has gone towards the property’s rental.

In response to what actions were taken to implement recommendations for the contract to be renegotiated for a lower rate, or for the lease to the terminated, Minister Lawrence related that on October 31st, 2016, a “Notice of Quit” was filed by then Permanent Secretary Trevor Thomas, and a reminder sent a year later, on October 3rd, 2017, by Permanent Secretary Colette Adams.

The controversial bond

The bond is still being rented and one of the main reasons being given for the situation is the delay in the completion of a building in Bartica to house a CT scan machine.

“There’s sensitive equipment that is there for Bartica. They are building the space to house the equipment but that isn’t completed as yet. So, it can’t move from there as yet because it has to have a certain temperature and that is part of the reason,” a source told Stabroek News last month.

It was also related to this newspaper that currently the ministry has an overstock of supplies and there are 16 containers that have to be cleared and stored.

“As you know, we are building a new bond in Kingston and we are expanding our bond at Diamond. We are hoping to get the one in Diamond finished by August but for the moment we have got to use the [Sussex Street] bond because we need to store our stuff there,” the source said.

In December of last year, Lawrence confirmed that budgetary allocations were made for the rental of the bond for the entirety of 2018. This was despite the Ministry having indicated prior that there were intentions to end the contract for the building’s rental.

Lawrence, during the consideration of the budget estimates, had indicated that provisions were made for the rental of the bond at a rate of $12.5 million per month, the same rate as last year.

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

The disclosure in 2006 that government was paying businessman Larry Singh, of LHI, the monthly rental of $12.5 million for the building at Sussex Street to store drugs had attracted significant criticism.

A Cabinet subcommittee was convened after former Public Health Minister Dr. George Norton had been found to have misled the National Assembly on 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 landlord LHI, 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.

Rental of the bond also formed the basis of a private criminal charge which PPP/C MPs had brought against former Public Health Minister Dr George Norton. The charge was later quashed by the Chambers of the Director of Public Prosecutions.

 

 

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