British Virgin Islands
A proposed new procurement law is designed to promote international commerce while ensuring that the government’s contractor selection process is transparent and fair to Virgin Islands businesses, according to Premier Andrew Fahie.
Mr. Fahie brought the Public Procurement Act, 2021 for a second reading on Nov. 1 in the House of Assembly, and legislators debated it before heading into closed-door committee for the remainder of the day’s proceeding.
In recent months, the ongoing Commission of Inquiry has been highly critical of the government’s procurement methods, raising concerns about practices such as widespread contract splitting and tender waivers.
But Mr. Fahie said on Nov. 1 that the Public Procurement Act and other good-governance measures working their way through the House had been in the works since before the COI.
HOA members reconvened Wednesday afternoon after the Beacon’s print deadline.
Fair treatment
The bill is designed to “provide for the fair, equal and equitable treatment of all tenderers,” according to a draft published in the Gazette.
To that end, it would “foster and encourage participation in public procurement proceedings by tenderers regardless of nationality, thereby promoting international trade.”
At the same time, however, it would also seek to “ensure that BVI tenderers are provided with ample procurement opportunities in order to encourage and support national development,” the draft states.
The bill would repeal part of the Public Finance Management Act 2004 but keep a five-member Central Tenders Board chaired by the financial secretary to review tender evaluations; make recommendations to Cabinet on projects; register classified companies; make policy recommendations; keep abreast with worldwide environmental and sustainability development standards; and work to eventually turn procurement into a digital process, among other responsibilities.
“There is no question that your government, all members of this House on both sides of the aisle, and the members of the public — especially those who provide goods and services to the government and to the various state agencies — all want a procurement system that is fair, that is transparent and promotes value for money whilst empowering local contractors and businesses to be successful,” the premier said on Monday. “We all want a procurement system that we can have confidence in.”
He noted that the legislation has been in the works across multiple administrations.
In June, the House also passed the Contractor General Act 2021, which would create an independent office to oversee and investigate how government contracts are awarded.
That bill, however, has not yet received assent from the governor.
Tendering
During Monday’s debate, lawmakers stressed the importance of ensuring that VI contractors have adequate opportunities to compete for tendered projects and have access to resources that will help them grow enough to bid on larger contracts.
The proposed law requires state-owned enterprises to “ensure that BVI tenderers are provided with ample procurement opportunities in order to encourage and support national development.”
Junior Minister for Trade and Economic Development Shereen Flax-Charles said this support should start at an early stage, including programmes for high schoolers interested in learning more about architecture and construction.
Under the proposed law, the government would be able to seek goods and services using various approaches based on the size and complexity of the project.
These approaches include open tendering, restricted tendering, requesting quotations, requesting proposals without negotiation, requesting proposals with consecutive negotiations, and single-source procuring.
The bill sets out specific conditions for when each procurement method should be used.
Emergencies
The bill also makes special provisions for relaxing certain rules to allow single-source procurement in the event of a natural disaster, public health emergency, or other exceptional circumstance.
Such special procurements should “be limited to the period of the emergency,” according to the bill.
As of Beacon press time yesterday, the bill had not yet to come for a vote in the House, but every representative who spoke on Monday lent their support.
Besides the premier and Ms. Flax-Charles, they included Deputy Premier Dr. Natalio “Sowande” Wheatley; Transportation, Works and Utilities Minister Kye Rymer; Health and Social Development Minister Carvin Malone; Opposition Leader Marlon Penn; and opposition member Mitch Turnbull.
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Guyana
The Guyana government says the China Railway Group Limited, which was initially selected to construct the Amaila Falls hydropower project in 2012, has now been granted approval to construct the renewable energy project.
A statement issued by the Ministry of Finance said Cabinet granted its ‘no objection’ for the Office of the Prime Minister to engage the company.
It said that the project will be built on a build-own-operate-transfer, or BOOT, model under which the company will supply electricity to the Guyana Power and Light Inc at a cost not exceeding US$0.07737 per kilowatt-hour.
On Monday, Vice-President Bharrat Jagdeo told reporters that with the cabinet’s no-objection, the government would soon move into negotiations with the company.
Jagdeo said that the government will be buying the power that is generated through from Amaila Falls and not the project itself. Importantly, though, the government will have oversight for the project.
“That’s not coming on our debt as government debt because we are not borrowing to do that,” Jagdeo said, adding that the government, through state-owned Guyana Power and Light, can resell the power to consumers for about GUY$0.15 cents/kWh. Currently, consumers pay about GUY$0.30 cents/kWh.
The statement from the Ministry of Finance noted that the project will lower the cost of electricity needed to power Guyana’s economic diversification and transformation into a low carbon economy, as well as reduce the cost of power to the businesses and households.
The project is also expected to support initiatives such as the electrification of transport and e-mobility and accelerate the development of a robust information and communications technology sector needed for an interconnected world as well as a competitive manufacturing sector.
This no-objection for the Chinese company follows the publication of a request for proposals by the government in various national newspapers during July 25 to August 15. Four companies submitted proposals.
According to the press release, China Railway Group Limited was identified as the “most capable partner” by the evaluation committee after a “rigorous” evaluation process. Subsequently, the National Procurement and Tender Administration Board submitted the relevant recommendation to Cabinet for approval of China Railway as the winning bidder.
Amaila Falls as a source of renewable energy was first identified in 1976 by Canadian company Monenco during a survey of hydroelectric power potential in Guyana. In 2009, the project was launched as part of Guyana’s efforts to pursue a more low-carbon future, using less fossil fuels like the heavy oil that Guyana Power and Light currently provides.
In 2014, the government earmarked US$80 million earned by Guyana under the Guyana-Norway partnership within the Low Carbon Development Strategy as equity financing for the project. But, the plan for development of the facility was later voted down in the National Assembly by the past administration and eventually shelved, despite a 2016 Norwegian study supporting its merit.
Jagdeo said that with the project now back on stream, no equity contribution from the government is needed.
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Guyana
With no bids received for the Ogle to Eccles four-lane highway project, government will be retendering with help from India to attract interest from a wider pool of contractors.
The project, which is being funded by India’s Exim Bank, has been delayed as a result of the situation.
Minister of Public Works Juan Edghill yesterday explained that following the re-engagement with the Indian government, Guyana has been given approval to retender the project. He stated that the bank has agreed to have the technical prequalification done by India’s Ministry of Transport with the aim of drawing a wider pool of contractors. This process was initiated on October 29 and will run concurrently with the local ministry invitation for financial bids from interested companies.
Edghill told Stabroek News that while the process is being done simultaneously, only financial bids of firms which are compliant in the technical prequalification will be opened.
The funding agency will provide a list of approved pre-qualified bidders to the Ministry by December 6 and financial bids here will be opened on December 10 at the National Procurement and Tender Administration Board.
The initial bids were expected to be submitted by August by four Indian companies that were pre-qualified by the Government of India to tender for the project.
Government is hoping to have at least 12 lanes, which includes the highway, to relieve the East Bank Demerara traffic congestion, Vice President Bharrat Jagdeo told a news conference on Monday as he disclosed that by 2023 an additional four lanes of road will be opened up.
“On the 15th November, we’re opening the bid for the piece between Eccles [and] Diamond and hopefully before the end of the year, we can award a contract for that road. By end of next year [and] early 2023, we should have a four-lane road to Diamond coming from Mandela,” Jagdeo explained on Monday.
Since taking office, government has been working to ease the traffic congestion on the East Bank Demerara Public Road via the construction of new alternative routes.
A section of the road between Eccles and Diamond has already been completed and another phase is being constructed linking Eccles with Mandela Avenue.
The new section of the road, for which bids are being received, will be a four-lane highway from Eccles to Great Diamond and will act as a connector to the Ogle to Eccles highway.
Just after taking office, the PPP/C-led government amended the design of the proposed Ogle to Diamond bypass road to bring the project costs in line with the funds made available by the Indian government.
During a visit to India in January 2015, then President Donald Ramotar had received a US$50 million loan commitment from the Indian Exim Bank to fund the road project.
The procurement process will see invitations extended to international bidders and will be monitored by the Indian Government.
Under the project, the first phase of the road is to be constructed from Ogle, East Coast Demerara, to Haags Bosch on the East Bank of Demerara and will later have a connection to Diamond, East Bank Demerara.
Vice President Bharrat Jagdeo on Monday disclosed that the government was hoping to have the project started by the end of this year but the failure to draw bids does not allow for the timetable.
This, he said, will negatively impact government’s developmental process along the route.
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Guyana
As questions mount on the government’s failure to have US$9b in Exxon-Mobil’s expenses audited, it has been disclosed that the Ministry of Natural Resources had been responsible for the evaluating of the financials of companies that had bid for the contract but it apparently abandoned the process without advising the procurement board.
The expiration of the deadline for the examination of the expenses means that the country has not been able to determine if the US$9b expenditure by ExxonMobil and partners was warranted. If the expenses were overstated it would have caused a reduction in Guyana’s profit oil take.
For the third day running Stabroek News yesterday sought a response from the Ministry of Natural Resources (MNR) to no avail. Sources told this newspaper that the ministry has not said anything to the National Pro-curement and Tender Administration Board (NPTAB) on tenders that were submitted for the auditing of the US9b in expenses. The tenders were opened in April of this year.
It is unclear how the ministry came to be responsible for evaluating tenders, given that the statutory process lies with the NPTAB, but one source explained that oil and gas contracts are evaluated by a special body, given that it requires expert technical evaluation while the NPTAB has “administrative oversight”.
The government’s failure to have the massive US$9b in expenses audited will raise serious questions about its management of the sector.
It was Vice President Bharrat Jagdeo who last week casually disclosed at a press conference that ExxonMobil’s post-2017 expenditure for the Liza-1 and Liza-2 wells would not be audited as government was not able to select a strong local group to undertake it. This statement was made although the government had advertised this year for foreign firms.
“We have been very disappointed that we have not been able to select a group to do the audit of the post-2017 expenditure on Exxon. The reason is we did not have a strong local content. We had two local groups that came in but they were not strong enough. We want to build a capacity in Guyana to do this audit,” Jagdeo said.
“We think our people have enormous skills, forensic skills, auditing skills, and we are looking to see if we can’t have an arrangement where we have a consortium of local people partnering with a foreign company so we can build capacity right here in Guyana. We are disappointed that from the individual bids we did we have not been able to do this. When I get back from Scotland (from the COP26 conference) I have asked the minister to see if we can’t get all the groups that expressed interest to see how we can partner, they can partner with a foreign company to do this audit. We also have to build this capacity in GRA (Guyana Revenue Authority). GRA has been mandated to build a capacity to do this. But it is a disappointment because it has been quite a while,” he added.
However, there has been no information on if the MNR as the procuring entity had informed the companies of why they did not qualify or why the Government of Guyana never announced that none of the tenders met the required criteria. No explanation was given on why the contract was not again advertised or if government had asked ExxonMobil to extend the two-year statutory period, given the lack of capacity here and the impact of the COVID-19 pandemic on works globally.
President Irfaan Ali had in August of this year promised that his government would be transparent on activities in the oil and gas sector and that it would have built a website to publish information for the public.
“I do not believe that we have been hiding anything as it relates to the oil and gas sector,” he further contended as he claimed that “every piece of information that the government has, every discussions we have had… has been made public and shared with the public.”
Ali yesterday returned to Guyana from Scotland where he had been attending the COP26 climate summit. This newspaper has reached out to his press and communications department for a response on the auditing of the US$9b.
In 2018, when he was Opposition Leader, Jagdeo had blistered the APNU+AFC administration over its sloth in auditing US$460m in ExxonMobil’s pre-contract costs and when the PPP/C took office last year he assured that all costs will undergo strict security. But now in 2021, as PPP/C Vice-President, he has casually excused his government from forensic scrutiny of nearly 20 times the US$460m.
Jagdeo had said last year that the $460m pre-contract costs was under review and that the Department of Energy had advised that it had audited up to 2017 and that the review of the report was still being looked and that the Department of Energy has told him that it had someone reviewing other costs up to 2017.
He reasoned that while the US$460m has been the focus, the nation has to be reminded that post contract costs totaling over US$20B have been added to that total and that will be the key area of scrutiny. “The Department of Energy said to me they have a person reviewing costs up to 2017, we have not gotten around to that as yet. We will ensure that every cent, from the beginning, to Payara, all of it, has to be reviewed,” he said.
“The post-contract costs are the bulk of it…we are talking upwards of (US$) 20B that have to be reviewed. It is a task we have to come around it. That is looking out for national interest,” he added.
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Guyana
As a citizen, I have always believed in accountability by public officers and transparency in their action. Criticism with merit must be welcomed by any public official when it is genuine and is presented by someone that’s real. As the Chief Executive Officer of the Guyana Sugar Corporation (Guysuco), I am always open to constructive criticism.
The evidence will reveal that there is no one by the name of Patrick Lewis who is in the employ of Guysuco at the LBI Head Office for the past 25 years and who purportedly authored a letter in yesterday’s Sunday Stabroek. The only reason why I am responding to the letter is because I hold Stabroek News to be a responsible newspaper that historically verified the authenticity of its letter writers.
I want to state three pertinent facts, not in response to that letter, but for public consumption:
As CEO of Guysuco, I worked hard to implement the spirit and letter of Section 24 of the Procurement Laws of Guyana. With the help of the newly installed Board, some 85% of the value of Guysuco’s capital procurement is now done at the National Procurement & Tender Administration (NPTA). Let me be clear – these projects are designed by Guysuco and all documents are supplied to the national authorities for them to conduct the procurement process. The Procurement Law of Guyana dictates where these tenders are evaluated and approved and it is not within the Corporation.
The remaining 15% is procured by way of open tender, subject to the full scrutiny by the Board by way of the Procurement Sub-Committees.
Guysuco many years ago hired a former Auditor General of Guyana, with a Doctoral Degree in Accounting Systems, to write its Procurement Manual. That Manual was approved many years ago by a former Board of the Corporation and is still in place today. A re-training programme is being launched for all procurement staff to remind themselves of the words, spirit and intentions of the Guysuco’s Procurement Manual.
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