The storage bond fiasco

Dear Editor, The nation continues to reel from the shock generated by the $12.5 million per month rental of a storage bond at Sussex Street, Charlestown, Georgetown by the Ministry of Public Health for a fixed term of 3 years. It is already established that the security deposit of $25 million paid by the government was used by the landlord to purchase the property; that an investment of $25,000,000 yields returns of $12.5 million per month and will yield $450 million in 3 years, all of which makes it one of the most lucrative transactions ever done in the history of this country. Minister Dr George Norton told the Committee of Supply that drugs and pharmaceuticals were already in the bond and that the bond satisfied the standard international requirements for such facilities. Within the hour of that disclosure, the press descended upon that facility and found carpenters still renovating and no drugs or pharmaceuticals were at the premises.

Another inaccuracy peddled by the Minister was that the government was renting bond facilities from New GPC at a cost of $19 million per month. The landlord is Linden Holdings Inc, whose principal shareholder is a known associate of the administration. The office of this company is located in a building owned by Minister Cathy Hughes. This contract was simply handed to the landlord in complete disregard and in violation of the Procurement Act. The nation was told that cabinet examined, discussed and deliberated on this contract, but found nothing wrong with these alarming details and gave the contract its approval.

When the astonishing information regarding this rental contract was made public and the pressure begun to build, Cabinet made another egregious blunder. It appointed a sub-committee of Cabinet to investigate a decision of Cabinet. It is as if Cabinet fell into a comatose state. It became oblivious to the principles of natural justice and the axiomatic conflict of interest and naked incest which permeate that decision. That this committee is comprised of three lawyers only compounds the stench. Two decipherable recommendations have emanated from this impugned sub-committee: that Minister Norton must apologize; and the contract must be reviewed. Without the consent of the landlord, a review of the contract would be a futile exercise. It is already executed. It is a done deal. It can only be altered or amended with the consent of the parties.

Upon my written request, Minister Norton finally furnished a copy of the rental agreement to the National Assembly as promised over two weeks ago. It has generated even greater scandal. It is important that I highlight the following:

(i) The copy circulated is unsigned. I believe this is deliberate. They do not wish to disclose the signatories to this agreement.

(ii) The contract purports to be between Linden Holdings Inc and “The Ministry of Public Health, a statutory body corporate”. The Ministry of Public Health is not a statutory body corporate. It is simply a department of government. Therefore, it has no legal personality and cannot enter into a contract in law.

(iii) The agreement binds the tenant “to use the Demised Premises for the purpose of a professional office”. Not a bond to store pharmaceuticals.

(iv) There is no provision in the lease that speaks to any PAHO/WHO or any standard requirements in relation to the storage of drugs.

(v) The contract was granted in violation of the Procurement Act and is unlawful.

The three lawyers who reviewed the contract either found none of the above objectionable or did not read the contract. In either situation, the incompetence is intolerable. No apology can fix this. This is not a blunder. This is negligence of a criminal degree. Nothing short of revocation shall suffice.

BK International /Haags Bosch This saga, as it is unfolding, has more twists and turns in its plot, than any Hollywood or Bollywood movie I have ever seen. With every passing day a different slant emerges from government, in a desperate effort to defend and justify the payment of US$5.7 million to BK International, whom the government itself accused of breaching its contractual obligations and doing sub-standard work at the Haags Bosch dumpsite. When approval of the first payment was sought in the National Assembly in February 2016, the nation was told that it was monies which were paid in January 2016, towards “an out-of court settlement” in relation to legal proceedings filed by BK for compensation. When Kaieteur News broke the

story in March 2016, that the government is paying this contractor US$5.7 million as a “settlement”, the Attorney General dispatched a letter threatening to sue the newspaper. His contention then was that the “settlement” was being “negotiated” but not concluded. So at that point in time, the preposterous position of the government was that they already made a payment in relation to a “settlement” whose terms were still being negotiated.

From March-August 2016, the nation was repeatedly told by several ministers of government that this US$5.7 million was paid as an “out of court settlement” in relation to legal proceedings filed by BK seeking compensation from the government to the tune of US$10 million. Indeed the government, narcissistically, patted itself on the back for being able to reduce this sum of US$10 million suit by BK International to US$5.7 million. On a hunch, I decided to search for a copy of the legal proceedings filed by BK. I searched the Supreme Court Registry for the years 20152016 but could find no such proceedings. I made this information public. To its credit, Kaieteur News was relentless in its pursuit of the truth in this matter. Finally the camel’s back broke. Minister Bulkan eventually conceded that no such proceedings were ever filed by BK and that the monies were paid based upon a mere letter threatening litigation. Every practising lawyer in Guyana will tell you that this letter is the most potent and fruitful pre-action letter ever written. It demanded US$10 million and yielded US$5.7 million in return. This letter should be framed and hung on the wall of the office of every lawyer in this country.

But the saga does not end there. Enter a surprising and unscripted character: the Solicitor General. She discloses, but only to the Chronicle, that the PPP agreed to pay off BK. Her tale is that the US$5.7 million represents payments for the works completed. So in two sentences, she has dismantled all the explanations the government has proffered over the last 8 months about “out-of court settlement”, “settlement”, etc.

For the record, I reject the contention the PPP ever agreed to pay BK International any sum of money as is alleged by the Solicitor General. The gravamen of the contention between the government and the contractor was precisely the non-payment of monies by the government because of the sub-standard works by the contractor; hence, the termination of the contract. If the government had agreed to pay, then the monies would have been paid. There would have been no problem.

Yours faithfully, Mohabir Anil Nandlall, MP