Courtney Benn Contracting now owes $140m for work not done – Patterson

-repaying in cash

Courtney Benn Contracting Services Limited (CBCSL) had signed an agreement with the APNU+AFC government to repay millions of dollars for works not done for the Demerara Harbour Bridge Corporation (DHBC), as was revealed in a 2014 Audit and now owes about $140M, Minister of Public Communications David Patterson says.

“We were legally advised that they (CBCSL) could not work off the monies towards another contract because that would be a violation of the contract and of the laws so they have to actually repay,” Patterson told Stabroek News.

“So actually, there is a system where they agreed to repay the money directly, they give a cheque in about $40M installments and I believe they have left back about $140M...” he added while explaining that when the matter comes up during Public Accounts Committee (PAC) meetings it would be further explained.

An audit report for 2014 of the DHBC revealed that CBCSL received large advances from the PPP/C government between 2008 and 2014 and some of the contracted jobs were not done.

“Several advance payments were made to suppliers for services and inventory totalling $498,813,241 at December 2014. Included in this balance is $424,690,611 advanced to Courtney Benn Contracting Serviced Limited,” the Audited financial statements for the corporation, which were laid in the National Assembly three Mondays ago stated.

“We have also noted that some payments were made since 2008 for which services/inventory have not been received up to the time of completing our audit in 2017,” the report on the bridge, on behalf of the Auditor General by the auditing company HLB, R. Seebarran & Co, added.

The report noted that as at end of last year August, the outstanding figure was reduced to $210,681,838 and the company had laid out a plan for how the remaining works would be done but that the issue of the providing of performance guarantee bonds was not addressed.

But Patterson explained that that sum was further reduced and the outstanding sum as at June of this year was about $140M. He said the company has accepted the state’s legal advice that the outstanding sum could not go to current works so it will repay in cash to the agency that it got the advances from who will then give it back to the Treasury.

“We [MoPI] thought that it could go to works that has to be done but were told that is not how it is done and you have all these legal obligations and so forth. So they have, and have been doing I must say, paying in increments,” he said.

“Yes, of course they will do that until all has been worked off, not worked in the sense of work but you know, until it comes down to zero. This, I must add is in no way my fault because all of this was since 2008, but we are ensuring that we hold companies accountable for taxpayers’ money,” he added.

General Manager of the DHBC, Rawlston Adams, said that his company continues to work with the CBCSL to ensure all works advanced for were completed.

However, he lamented that the company was refusing to give the corporation the necessary performance guarantee bonds.

“As we speak, that [sum] is continuing to reduce but we still have the issue with the contractor providing the bond. We are working to ensure all the works are completed but again, we still have the issue,” Adams said.

“The contractor is refusing to issue us the bond,” Adams added.

This newspaper has tried multiple times to get a comment from CBCSL on the issue to no avail. Once, the newspaper was referred to the company’s Chief Accountant, Mr. Sankar (only name given) who took excerpts of the report and what was relayed by the DHBC and promised to get back to Stabroek News. He never did and subsequent calls were always met with either he was not in or was at a meeting.

The Audit Office said the Board of Directors of the corporation needs to consider whether the advancing of the sums to CBCSL has been “beneficial and whether the corporation may not in effect be financing the company”.

Highlighting that similar irregularities had over the years been pointed out but nonetheless continued, the report made reference to performance guarantee bonds for prepayments which had expired and had not been renewed. “As noted in Appendix I attached, the performance and advance bonds for outstanding works of $262,184,220 at December 31, 2014 expired at various dates in 2013, 2014 and 2015. These bonds have not been renewed to date,” the report said.

HLB, R. Seebarran & Co stated that at the time of their field audit, in October of 2016, and when the matters were discussed with General Manager Rawlston Adams and his accountant, letters were also dispatched to the suppliers to refund advances for the years 2008-2012. A request was also made for the suppliers to have the remaining bonds renewed.

However, no refunds were received nor were the bonds renewed.

The failure by the DHBC to ensure that it has up-to-date bonds exposes it to credit risk and shoddy works, the report noted. “The failure to renew performance and advance guarantee bonds when due for renewal could result in the corporation having no security and no work or poor quality work executed by the contractors,” the report stated.