Minister of Health Dr Frank Anthony told the Parliamentary Committee of Supply yesterday that the head office for his ministry is on track to be completed by mid-2022.
Asked by former junior Public Health Minister, Dr Karen Cummings whether the budget allocation would see the Ministry’s Brickdam, Georgetown head office being finally completed, Dr Anthony reported in the affirmative and disaggregated how the provision would be expended.
He told the Committee that $259 million would be going toward fixing the defects of the building while $13 million is to be paid to the supervising firm to ensure that the corrective works are up to standard.
“This is a long-standing project and I think it would have gone over budget. This was one of the APNU+AFC projects but it went beyond the budget and we are trying to fix it and correct some of the defects that were there. Last year we had to terminate the contractor for failure to honour (his) mandate…we are on track to complete (the building) by mid-year,” Dr Anthony told the Committee of Supply yesterday.
The construction of the ministry’s head office was conceptualized by the former government but the project has had its fair share of controversies. Chung’s Global Enterprise was awarded the contract twice, first in 2017 and in January 2019 with a duration of one year.
In 2017 the contract was valued at $356.826 million and was signed on November 7. Several extensions were granted for the project but the contractor consistently failed to deliver.
Back in 2020, after taking office, the PPP/C government terminated the contract. In an October 31st, 2020 letter sent to the Chief Executive Officer of Chung’s Global Enterprise, Cleon Chung, Attorney General Anil Nandlall had informed that the contract had been terminated with immediate effect. He had cited several breaches in its agreement with the contractor as being among the reasons for the decision.
Among the breaches highlighted was the lengthy delay in the completion of the building, and the increase of the prices on the bill of quantities for variations to the contract which helped to bloat the estimate for the construction of the building by an additional sum of $513 million.
According to the letter, the ministry had pointed out that after a visit at the end of September 2020, less than 70% of the works were completed despite the contractor receiving a sum of $308,449,233. The sum was handed over as an advance payment/mobilization of payments on eight interim payment certificates.
Further, the letter had alleged that Chung’s Global Enterprise breached the contract agreement when it on the 3rd of August, 2020 repriced the bill of quantities for variations to the contract.
In the 2020 Auditor General’s report, the project was once again flagged for falling short on expending the allocation.
“The sum of $141.400M was allotted for (i) provision for Ministry’s Head Office Complex, and (ii) provision for building and consultancy services at Head Office and electrical works. Amounts totalling $60.708M were expended, resulting in a shortfall of $80.692M, which is more than half of the sum allotted. This is an indication that the Ministry has not executed its anticipated level of activities under this Programme. As a result, the intended benefits of improved facilities, operational efficiency, and health services were delayed,” AG Deodat Sharma said in his report.
He also stated that a review of the $36.549m performance bond, dated November 23, 2017, revealed that it expired on 24 November 2019. As such, he highlighted that the Ministry would more than likely encounter difficulties when attempting to levy on the bond for the contractor’s failure to meet his obligations.
The Auditor General’s report also highlighted that at the end of December 2020, amounts totalling $321.9 million, which is approximately 90% of the contract sum were paid to the contractor.
“Included in the sum paid is an amount of $71.365M, which was advanced to the contractor. However, only $36.549M was recovered. On 20 February 2020, the Ministry approved the contractor’s request to defer the repayment of the advance until Interim Payment Certificate № 9. The basis for this approval was unclear since the contractor’s performance was poor and efforts should have been made to secure the best interest of the Ministry,” Sharma’s report stated.
