The Sussex St bond revisited

In its column in yesterday’s Sunday Stabroek, Transparency Institute Guyana Inc (TIGI) addressed the country’s ranking in the most recent report of Transparency International on corruption perceptions and considered the various factors which could have given rise to the improved score.  It stated that among the achievements which could have led to an appreciation in the country’s performance were the appointment of an Ombudsman, the eventual release of the 2016 Production Sharing Agreement with an ExxonMobil subsidiary, the sacking by the Guyana Revenue Authority of several employees for corrupt practices, the activation of the Local Government Commission and the commencement of the Commission of Inquiry into land ownership.

Noting that Guyana, however, remains perceived as among the most corrupt countries in the world, TIGI  provided a longer list of events which may be contributing to that perception. Interestingly, the unilateral appointment of the Chairman of GECOM made it onto the TIGI list because of the lack of accountability for the decision; President Granger refusing to provide reasons for his rejection of nominees on three lists. Just as an aside, four months on, Chief Justice (ag) Justice Roxane George is still to issue a decision on the challenge to the unilateral appointment of Justice (rtd) Patterson as Chairman even as GECOM gets into full swing in preparation for local government elections.

Another item that made it onto the TIGI list of negatives was the rental of a drug storage bond on Sussex Street early on in the life of the APNU+AFC administration. In its discussion of the matter, TIGI said “This deal for which single sourcing to a party member was not justified, reeks of corruption. It was not rescinded in 2017 and it remains in place”.

Such a declaration should be of grave concern to the government – particularly as it regularly delivers fulsome and cloying declarations about adherence to rigorous procurement standards and transparency.

The last official word on this contract came on December 14, 2017 when the Minister of Public Health, Volda Lawrence, under questioning in Parliament during the consideration of the 2018 budget estimates, stated that an allocation for the continued use of the bond was made for all of this year. This allocation was made even though the Minister herself had stated that the ministry was moving away from the renting of private bonds.

The rental of this bond by the ministry remains eminently worthy of a criminal investigation and it is left to be seen which of the various accountability institutions will seek into it and take the relevant action. Such institutions and agencies would include but not be limited to the Public Procurement Commission, the Integrity Commission, the State Assets Recovery Agency and the Special Organised Crime Unit.

Aside from the standard questions, there was one highly dramatic sequence worthy of celluloid when an impromptu visit to the bond by MPs on December 8, 2016  – months after rental began – found not a single tablet in its spaciousness.

The key questions have to do with the violation of procurement norms.

At some point in early 2016, the Ministry of Public Health (MoPH) engaged a financier who was known to have had a longstanding relationship with the PNC and later, the PNCR, Mr Larry Singh, to provide it with the use of a bond. Mr Singh was never in the bond provision business prior to this point. If MoPH required the services of a bond to store drugs then it was mandatory that it go to tender for the provision of these services. It did not do this and the absence of a tender process constituted valid grounds for the immediate termination of the contract and its investigation. This was not done by the APNU+AFC government.

The next question that had to be answered was whether the government did indeed need space. A specialised drug storage bond at Diamond on the East Bank of Demerara had reserve capacity for storage at the point that Mr Singh was contracted. Furthermore, for months, as evidenced by the visit of December 8, 2016, the bond was virtually empty. At $12.5m a month – and this is now continuing in 2018 – the taxpayers of the country are footing the bill for a bond that might not have been necessary and for an arrangement that violated all known procurement norms.

The pivotal question which remains unanswered even though senior ministers in the government have been repeatedly asked is how did Mr Singh come to be in the proximity of discussions for a bond when he was never the provider of such services? Who in the government initiated the deal and how was Mr Singh – out of all of the hundreds or thousands of persons  who  might have been eligible – favoured with the contract? The answer would most likely be that Mr Singh’s PNCR connection in the government enabled access for him and he has since been collecting $12.5m a month of taxpayers’ money for services which may not have been needed in the first place and which were awarded without any competitive procurement. This should clearly be considered as government corruption.

The Minister of Public Health at the time was Dr George Norton. He was found lying to Parliament on this deal after he dismissively handled questions posed  by the opposition. Dr Norton lied on several scores including when he stated that $12.5m would be a saving on what was being paid to New GPC for storage when in actuality nothing was being paid and for stating that the bond was in use when it   wasn’t. He was then shifted sideways by the Granger administration instead of being subjected to an investigation on how Mr Singh came to be a provider of bond storage services.

There were other unsettling aspects of the transaction. Mr Singh only purchased the building on March 4, 2016 and for $25m – the identical amount provided by the government as a deposit for his services. Taxpayers had essentially financed Mr Singh’s business for a project that may not have been needed and one that he did not compete for. He has since presumably been making a healthy return compliments of the taxpayers of this country.

Lying to Parliament by a minister should attract severe consequences both from the legislature  and the executive. Nothing of any significance has occurred.

As with the D’Urban Park project around which swirls a host of questions about corruption and procurement violations, this government will not be able to credibly argue that it or its members haven’t engaged in graft until it can satisfactorily answer all of the related questions and prosecute those guilty of infractions. The outstanding questions on the Sussex Street bond persist even as it continues to be a burden to taxpayers.

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