Former DHBC board member disputes legality of contract for new bridge study

 -Patterson says established procedures followed

The Demerara Harbour Bridge (Department of Public Information photo)

With the legality of the award of the contract for a feasibility study and design for a new bridge across the mouth of the Demerara River now under scrutiny, a former member says it cannot be legally binding as the Demerara Harbour Bridge Corporation (DBHC) board never approved the project and the funding was not approved by Parliament, even as Public Infrastructure Minister David Patterson maintains that all decisions taken were above board.

The contract signed between the DBHC and consultant LievenseCSO on December 9th, 2016, cannot be deemed a legally binding agreement as it lacked the approval of the DHBC board and the Parliament, engineer and former Vice-Chairman of the board Joe Holder told Sunday Stabroek.

Since the life of the former board expired at the end of last year, a new board has not been constituted.

In an interview last Thursday, Holder said, the DHBC “had no legal authority” to enter into a contract with LievenseCSO to execute a feasibility for a new bridge “in consideration of payment by the DBHC from a bank account containing funds which are the property of the CRG (Cooperative Republic of Guyana) and not the DBHC without the prior approval of Parliament.”

The funds were taken from sales of The Asphalt Plant (TAP), which, Holder said, were deposited in a special bank account “owned and managed” by DHBC by virtue of a Cabinet decision in 2013. “The profit from the sale of asphaltic concrete is the property of the CRG and not DHBC,” he noted.

But Patterson, whose role in the contract award process has been questioned by the Public Procurement Commission, said the new asphalt plant was bought from the TAP funds on the board’s recommendation when Holder acted as chairman, and it was not approved by the Parliament. The funds of the asphalt plant and bridge are reported in the DHBC’s annual reports, which have been laid in the National Assembly, he added.

The TAP, Patterson noted, was previously run by the Transport and Harbours Department (T&HD) but because it was not being run effectively, it was transferred to DHBC without any funds in 2013. DHBC used its funds to repair the plant and buy materials, he said.

Government’s decision to raise the toll in 2017, he said, “was to ensure that DHBC had enough funds to be self-sustaining, so that they do not have to receive subventions from CRG, thus nothing has to go to Parliament for approval,” Patterson said.   

Holder also claimed that DHBC General Manager Rawlston Adams signed the feasibility contract on behalf of the DHBC without the prior knowledge and consent of the DHBC board. Adams did not submit a budget to the board which made provision for expenditure on the feasibility study prior to the signing of the contract for the approval of the board, he said.

“Mr Adams was not contracted with the DHBC to function as General Manager at the time he signed the contract,” he further added.

Adams had been providing services as general manager, Holder said, during the period August 2013 to July 2016 under a contract between himself and the Ministry of Public Infrastructure (MPI).

“Technically, he was therefore not an employee of DHBC, but a contractor to MPI providing services as general manager to DHBC.”

In January 2018, Holder further said, Adams submitted a proposal for a new contract to the Minister within the MPI to provide services for three years as general manager, DHBC and as project manager for the new bridge project starting “from 1 August 2016.”

When Adams signed the contract with LievenseCSO, Holder said, “he did not have a written contract with either DHBC or MPI, but was acting in accordance with the wishes of the Minister of Public Infrastructure.”

Patterson explained that Adams has been the GM since 2008 and his contract has always been signed by the Permanent Secretary of the ministry. This is consistent, he said, with appointments in similar agencies such as the Cheddi Jagan International Airport, Guyana Power and Light, Guyana Energy Agency, and the Guyana Civil Aviation Authority, among others. Contracts of chief executive officers and general managers, he said, are signed by the ministry rather than boards.

“What is more amazing,” Patterson said, is that Adams has been signing all the contracts for the DHBC from 2008 to the present time with the most recent being a $500 million contract for a new asphalt plant two months ago. He questioned whether that contract was also illegal along with the others he has previously signed.

“It appears the impression that he (Holder) wants to portray is that this single contract is illegal,” Patterson said, adding, “What about the payroll? Is his signing this off illegal as well?”

Continuing, Holder said, the DHBC Act makes no specific provision to execute a feasibility study for a new bridge across the Demerara River by means of a contract with a consultant, and to pay the consultant the revenue collected by DHBC under Section 4 of the act.

Patterson said there are no specific provisions in the act for the company to run “an asphalt plant either, yet they so do.” The Act, he said, “never limits the activities that the DHBC can perform.”

Holder quoted the DHBC Act 2003 in which it says that the general manager shall, “subject to the general direction and control of the board, be responsible for implementing the decisions of the board and the efficient discharge of the functions of the board.”

Further, the first schedule says that the general manager shall be responsible “for proposing policies, procedures and budgets of the corporation for the consideration and approval of the board” and for implementing the projects and programmes to be financed by the corporation except where specifically approved by the board.                 

He said Adams had not submitted to the board a budget providing for expenditure on the feasibility study prior to the signing of the contract for approval.

“The contract cannot, therefore, be deemed a legally binding agreement between DHBC and LievenseCSO,” he argued.

The board was informed that Adams was appointed project coordinator for the feasibility studies and subsequent operations but the authorising authority was not conveyed to it, he said.

“The board did not express officially any approval or disapproval of this sequence of events, and put on the agenda of its monthly meetings the monitoring of progress of the feasibility for the new bridge, and the subsequent request for proposals by contractors to make the new bridge a reality at the location recommended by LievenseCSO.”

The board subsequently learned that the proposed location of the new bridge is between Houston on the East Bank Demerara and Versailles on the West Bank Demerara.

Safety concerns

LievenseCSO had recommended that the bridge should be low level with a substructure conveying the live and dead loads to the river bed, and a superstructure with three traffic lanes and a lifting span across the shipping channel to permit ocean going vessels to pass through the bridge.

Holder noted that in 1976, when the Thos. Storey Engineers Ltd proposed to the Ministry of Economic Development the construction of a floating bridge between Ruimveldt and Versailles, the proposal was not approved by the then harbour master on the grounds of navigational safety.

He questioned whether approval has been given to construct a low level bridge between Houston and Versailles from a navigational safety point of view and if this was required by law.

On this issue, Patterson said, the Marine Administration Department, T&HD and the Central Housing and Planning Authority were consulted during the studies.

Holder said present and previous governments have signed contracts with consulting firms to provide prefeasibility or feasibility for a new bridge across the Demerara River in the vicinity of its mouth using the public, private partnership (PPP)/build, own, operate and transfer ownership after twenty years (BOOT) principle.

LievenseCSO, at a stakeholder forum at the Pegasus Hotel in April, 2017, Holder noted, said that when the new bridge is opened for business the existing DHB should be closed for business forever because the firm investing in the new bridge would not be able to recover its capital in 20 years unless the CRG subsidised the firm to the extent that the new bridge would operate by charging tolls which were identical with those charged by DHB operating in parallel with the new bridge during the first 20 years.

Due to the size of the investment in the new bridge, he said, this would be possible only if the CRG paid a large subsidy to the investing firm during each of the first 20 years of operation for which comparison with the current financial situation at Berbice Bridge is instructive.

According to Patterson, government has always stated that it will have some level of input into the funding of the new bridge.

“We have stated this publicly, if not, we could end up with a Berbice Bridge situation where the full toll is passed on to the end users. This is done worldwide. We will contribute at some level to ensure that tolls do not exceed, say $400 to $500 per car,” he said.

The closure of the DHBC two or three years from now, Holder said, will make the majority of its staff redundant and a significant part of the skilled work force employed by contractors who provide maintenance services to DHB would also become redundant.

Holder suggested that cost of severance and retraining of workers should be added to the cost side of the feasibility study for the new bridge.

While job loss might be true due to the closure of the DHB, Patterson said, it is anticipated that in three years’ time there will be hundreds of other job opportunities for these highly skilled workers. He said, “Actually we are already losing some workers to the emerging oil and gas industry.”

People’s bridge

Holder, who was the engineer at the forefront of the construction of the DHB, urged against closing down the world’s longest floating steel bridge, claiming that it was constructed on the modular design principle and has an indefinite life, provided that it is effectively and efficiently maintained with timely replacements of defective components. Since the implementation of a new toll structure in 2017, DHB, separate from TAP, he said, has been operating at a profit, and is no longer subsidised by tax payers.

It is part of the built heritage of Guyana, he said, “and arrangements should be made for it to be added to the list of the national monuments of Guyana. It was constructed by a Guyanese work force using the principle of workers participation in management, especially in the administration of discipline, with manual workers recruited by the Employment Exchange from areas adjacent to the DHB site, with unskilled labourers being paid the national minimum wage.”

He suggested that it be called “a people’s bridge” and it should be seen as a tourist attraction connected with and symbolic of the capital city Georgetown, in the same way that Tower Bridge is connected with and symbolic of London, and Brooklyn Bridge connected with and symbolic of New York City.

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