Dear Editor,
The headline story of SN on September 28, 2017 that ‘Restricted bidding for the new Demerara River bridge raises red flags’ provides the opportunity to revisit the earlier prequalification tender notice by the Ministry of Public Infrastructure (MPI) for the “finance, design, build and [maintenance]” of the bridge. That tender invitation, based on its text and subsequent events, is intolerably ambiguous. In addition the ‘restricted bidding’ in your article is worthy of comment.
As a side note: this writer wrote Stabroek News about a year ago stating that legislation was needed to regulate the private funding of public projects (‘Legislation is needed for public-private partnerships’, Oct 1, 2016 ). In my view that legislation is still needed now and urgently so, as the Procurement Act, at least as presently existing, cannot properly encompass the regulation of private funding, or any other type of funding, for public projects where costs are recovered from user-citizens directly.
To return to the tender invitation: this is careful to state that it is envisaged that the bridge will be completed by 2020. This is an admission, perhaps unintended, that the new bridge will be part of the election campaign by the current government. Relevant here is the recent article under ‘Ian on Sunday’: ‘Thinking, already, about the next general election’ (SN Sept 3, 2017) in which the writer highlights “people worrying” about the next general election in Guyana, and reasons that this is terrible for the nation. On the other hand, though clear on completion time, the tender invitation exhibits ambiguity on whether the bridge will be built by government loan, or private capital via investors and bankers.
The invitation requests contractors to offer lump sum bids for design and construction of the bridge. The “complete basic design” will be provided by MPI as a reference. Conflictingly contractors are also requested, “in order to improve the funding package…” to “…advance proposals for financing the project”, all confirmed by later statements of MPI. No reference is made as to the availability of a prospectus or similar document, needed by a financier in these circumstances. Even if a prospectus is available, these two requests are incompatible with each other. The first is for the design and construction of the bridge, evidently to be funded by government loan. The bid can be based, correctly so, on the physical characteristics and environment of the location (“complete basic design”) and a bid can be accepted following a lump sum offer. However the second request (to “advance proposals for financing”) requires private investors to be attracted to the construction if they perceive the bridge to be viable in giving a surplus on investment. Diverse interests need to be met: that of the government in gaining a quality bridge; the investor in obtaining an adequate financial return; and the investor’s bank in gaining worthwhile loan interest and charges. In this case it is highly unlikely that a bid can be accepted after offer of a lump sum, since other essential criteria including ‘value for money’ and ‘affordability’ should need to be established and agreed, usually by negotiation, and the outcome is dependent on just how risks are allocated between the government and the private investor (with the investor’s bank taking all possible steps to avoid risks).
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For the last four months, the Office of the Contractor General has been conducting a probe into the Jamaica Urban Transit Company Limited’s (JUTC) engagement of Millennium Security Limited (MSL) to provide services to the state-owned bus company, Dirk Harrison revealed yesterday.
Managing director of the JUTC, Paul Abrahams, told The Gleaner/Power 106 News Centre yesterday that the company paid some $12 million to MSL for providing security at its facilities, which store spare parts and lubricants, in an effort to control theft. He said this interim arrangement was in place for eight months.
However, the contractor general told The Gleaner that he received a complaint from a citizen who raised concerns about the manner in which MSL was selected to provide services to the JUTC.
Harrison said he requested documentation from Abrahams, who has supplied some information. He is currently awaiting further material from the company.
“The JUTC had been formally advised, requisitions were sent to them, and answers have been provided, and the answers require further questions to be asked, and those are being asked of the entity,” Harrison said.
Opposition spokesman on transport, Mikael Phillips, on Wednesday charged that the JUTC had breached procurement guidelines in the awarding of a contract valued in excess of $50 million in which the brother of a member of the board has an interest.
However, Abrahams said the JUTC did not enter into a contract with MSL.
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The Jamaica Urban Transit Company (JUTC) is refuting claims by the Opposition that it has awarded a multi-million dollar contract to an entity connected to one of its board members.
Opposition spokesman on transport, Mikael Phillips, has claimed the JUTC’s board has awarded an over $50 million contract to a company in which the brother of a member of the board has an interest.
The contract is reportedly for the provision of property loss and recovery assessment services, accident investigation, damage assessment, disciplinary hearings for all workers and security at all depots and other JUTC properties.
Phillips says the entire board should resign over the matter.
He also wants the contractor general to launch a full-scale investigation into the award and for Transport Minister Mike Henry to say whether the contract was taken to the Cabinet.
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With municipal elections slated for next March, the nation is again heading into political season. It is known that during these times, political parties are “scratching around” for campaign finances for their campaign machineries.
If you listen to the PUP, the VIP, and COLA, however, the party in power, the UDP, doesn’t have to “scratch” around, because they have their hands in the public coffers, which is to say, taxpayers’ pockets.
This is a “clear attempt to enrich select UDP Ministers and cronies and pad [the party’s] election coffers.” –the Opposition PUP
Well, to mix our metaphors, the UDP just plucked out a PetroCaribe-sized gob of grease to get their election motors oiled and rolling. That’s the view of these parties after Prime Minister Dean Barrow’s administration issued an almost 8-million-dollar contract to a UDP crony for a project, which, according to a statement issued by the Government of Belize on Thursday, is for rehabilitation, and drainage infrastructure improvement of 1.9 km or about 1.1 miles of Fabers Road in Port Loyola constituency, of which Hon. Anthony “Boots” Martinez is the area representative.
The winner of the contract, Imer Hernandez of Imer Hernandez Development Co. Ltd., is the nephew of disgraced former UDP Deputy Leader and Deputy Prime Minister, Gaspar Vega.
In a statement issued today, the Opposition PUP referred to the contract as a “grossly bloated” one in which there is, “no rational justification” for such exorbitant costs. The release further states that the conventional rule of thumb for routine reconstruction roadways is one million dollars per mile.
According to the PUP, with municipal elections just months away, this is a “clear attempt to enrich select UDP Ministers and cronies and pad [the party’s] election coffers.”
The PUP revealed that in 2016, Cisco Construction was awarded a contract for the rehabilitation of 3.5 miles of the Philip Goldson Highway, which included widening the entire road by 10 feet and the placements of lights and the construction of a heavy-duty retaining wall to stop the erosion of the riverbank. The money spent under this contract amounted to less than four million dollars per mile [for the 3.5 miles rehabilitation project], said the PUP, who went on to say that “it is beyond comprehension that routine works on one mile of Fabers Road would be almost double that.”
The party took shots at Minister of Works Rene Montero, who, it says, has been scrutinized for bloated contracts before. The release pointed to a short stretch of road in Santa Elena, from the Loma Luz Boulevard to the Hawkesworth Bridge, which cost tax payers almost seven million dollars.
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Five years after an audit revealed Cayman was “wasting millions of dollars” each year on the purchase of goods and services, the territory has rewritten its rules for public procurement in a bill that could come before the Legislative Assembly this month.
The Procurement Bill (2016) sets up an entirely new process for public bids for anything from purchasing supplies to the construction of public buildings, focusing on a tendering process at the “department level” – meaning a lower-level committee process will first review the proposals. Those committee reviews will then be passed on to a new entity called the Public Procurement Committee for a secondary review.
Although the local political leadership and Cayman’s deputy governor will have a hand in appointing members of the new Public Procurement Committee, the bill seeks to place layers between their direct involvement in public bids by having senior civil servants appoint members of the initial bid committee. The three-person “departmental” bid committee will review offers for any project and then pass its recommendations to the procurement committee, which will review it and either concur or disagree with the initial decision.
The issue of political control in the procurement process arose after former Auditor General Alastair Swarbrick noted in 2011 that certain elected officials appeared to be interfering in public tendering.
“We found evidence that some politicians are not complying with the procurement rules that have been established … and, in some cases, contravening the laws and regulations [of the bid process],” Mr. Swarbrick stated. “In other countries, the practice of politicians being involved in the administration of government’s transactions has resulted in cases of corruption and abuse.”
The government’s director of procurement, who has already been hired, will make rules to prevent the appointment of individuals on department committees who may have personal or financial conflicts on the projects they are overseeing, according to the legislation.
A code of conduct for procurement principles included in the bill states: “There shall be no corruption or collusion with suppliers or other persons involved in a procurement project.”
In addition, the government entity handling the project bids is forbidden from “splitting” the project to avoid minimum bid amount requirements set under the legislation, unless it can show there is a proper business case for doing so.
“[The government] entity shall not split or subdivide a contract to acquire goods, services or works in order to limit competition or to avoid requirements under this law,” the bill states.
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