Over five years… Courtney Benn Contracting and subsidiary secured 92% of MARAD spares and rehab contracts

-no Bill of Quantities presented

-no Bill of Quantities presented

A special internal audit into the Maritime Administration Department (MARAD) has revealed that between 2015 and 2020 Courtney Benn Contracting Services (CBCS) and its subsidiary company, Brenco Shipping were awarded 92% of the contract values for procurement of spares and rehabilitation and maintenance of vessels but major tasks remained incomplete and other irregularities were detected.

The audit report has led to Minister of Public Works, Juan Edghill writing to the Office of the Auditor General seeking a forensic audit of MARAD.

Chief Engineer, R Clarke, in an interview with the auditor, Dexter Smith stated that CBCS was able to secure over 90% of the contracts at the National Procurement and Tender Administration Board (NPTAB) because it was the most responsive and the other two contractors - Guyana National Industrial Company (GNIC), and another only named as “Viera”, rarely bid or their prices were too high.

Eighteen contracts were examined during the audit of which only one was awarded to GNIC.

In total MARAD spent $3.84 billion for the Procurement Spares & Equipment and Docking & Rehabilitation of Vessels between 2015 and 2020. The report revealed that Courtney Benn and Brenco were paid $3.55 billion of the total amount.

In addition, the audit showed that as much as 95% and in some instances 100% of the contract sum was paid in advance to the contractors after the contracts were signed despite some works not being completed. The NPTAB’s standard bidding document sets mobilization advances at between 15% and 30% depending on geographical location, the audit report noted. Based on the advice of the Public Accounts Committee of Parliament in a meeting with the Ministry of Public Works on January 18, 2021, it was stated that mobilization advances above the 30% ceiling were not permitted.

In many cases bonds were also not in evidence.

A site visit to the Mazaruni Dock Yard by the acting Shore Chief Engineer on January 12th, 2021, revealed that four vessels for which $675

million in contracts was paid to Courtney Benn and Brenco for rehabilitation are yet to be completed.

According to the report the Seamang, Ml Allan Young, MB Baramani, and a split barge, were in the dockyard. At that time there were no works ongoing on any of the vessels.

The absence of Bills of Quantities (BOQ) made it difficult for the engineer to determine whether works were done on any of those vessels. It was noted that BOQ’s were absent for all contracts that were awarded to Courtney Benn and Brenco. MARAD did no verification of work progress prior to payments of contractors.

The Seamang arrived at the dockyard on December 30th, 2012, the Allan Young on February 17th, 2020, the Baramani on July 13th, 2011 and the split barge on July 20th 2011. The latter entered the dry dock on September 12th 2018 and was undocked on December 4th 2019.

Grass was found growing on the wooden crane pad area of the main deck on the Seamang and the inspection showed little to no sign of recent works despite the fact that $73.32m was spent on docking and rehab in 2017 and repairs to the bulk head in 2019.

The MB Baramani was moored alongside the wharf and the only sign of recent works was the construction of a new engine base at the stern.

“This is the level of works completed after $359.09 million …was paid to Courtney Benn & Brenco Shipping for Spares and Docking & Rehabilitation in December 2017 and January 2018”, the auditor said.

ML Allan Young was found in dry dock with both propeller shaft and rudder stock extracted. The hull of the vessel had been sand blasted and epoxy applied to parts of it. Badly corroded areas of the hull had no epoxy coating.

The auditor said that between 2015 and 2020 MARAD spent $193.52m on this vessel – the last payment was for $13.58m in April 2020 for the replacement of split propeller shaft and fittings. However, the auditor said that though full payment was made, the work was not completed.

The split barge was moored at the dock yard and it was observed that the entire main deck and areas above the water line were coated with grey epoxy. The audit report said that $75.7m was spent on docking and rehabilitation in 2017, 2018 and 2020 and of that amount $56.4m was paid to Courtney Benn.

Verification

Meanwhile, it was disclosed in the audit report that several documents were not submitted for audit scrutiny and this affected the verification process. According to the report, Courtney Benn & Brenco contracts or payments did not have relevant supporting documents attached, while payment to other contractors had all relevant documents affixed. When asked why were payments facilitated without the necessary written approvals, the Accounts and Administrative Officer at MARAD, claimed that the then Director General gave verbal directives saying that if she was uncomfortable with carrying out instructions, she could take it up with the permanent secretary or the Minister.

Additionally, Courtney Benn and Brenco failed to submit Bills of Quantities (BOQ) although there were continuous requests for them to do so. The absence of the BOQs also affected the intended analysis of the Spares and Equipment for the $2.08 billion paid to Courtney Benn.

Based on a site visit, it was noted that items are in an unverifiable state and in damaged old boxes and there is no adherence to the Stores Regulations of 1993, Sections 3&4, which speaks to the safe custody and good maintenance of the stores.

Additionally, nine of the contracts were open-ended where completion dates were not stated but referenced in an annex which was not presented for the audit.

These contracts were for docking and rehabilitation of several vessels. One of the open-ended contracts was for the rehabilitation of the BARAMANI vessel since no execution period was stated. This contract was signed on December 5th, 2017 but there was no commencement order or project completion date.

On January 25, 2021, the internal auditor questioned the former Director General of MARAD, Claudette Rogers on the matters being investigated.

He asked Rogers to give a “walkthrough” of the systems from creation of the docking list to the completed contract. The auditor said that the response was that “such things cannot be given from the top of her head”.

The auditor further asked if as stated by staff that certain documentation such as BOQ for Courtney Benn and Brenco Shipping “resided” with Rogers. Her response, he said, was that the lack of access to records left her “incapable off giving credible information”.

The auditor also asked how $359m was spent on the Baramani but recent checks suggested that works were not done. He said that Rogers’ response was the “assessment is technical and she is not technical, her job doesn’t include going on site to certify works”.

As to whether she had given verbal directives to pay Courtney Benn and Brenco, the auditor said that Rogers’ response was that “The Accounts (Department) should not have made payments without relevant signed approvals. Payments cannot be made on verbal instructions; documents have to be produced before any payment is made”.

The auditor said that since adequate responses were not being provided to specific questions the meeting ended early.

Frustrate

The internal auditor was of the view that there was a deliberate attempt to frustrate the audit and that it was unbelievable that no bill of quantities for Courtney Benn and Brenco Shipping was available for examination. “The BOQ forms part of the submission for NPTAB and Cabinet’s deliberation & approval. How then have they conveniently gone missing”? he asked.

He further said that it was strange that other suppliers had the supporting documents attached but that those of Courtney Benn were missing. He said that ignorance cannot be claimed in the matter given that all the transactions followed the same patters and he asserted that the then Director General “must give account for the massive breakdown in the internal control systems”.

The auditor cited as an egregious example the signing of a contract for the acquisition of spares for $400m which was signed on July 4, 2019 with a mobilization advance set at 80%. However, on the same date the entire contract sum was paid.

During the period under audit, the auditor noted that the positions of Chairman of the MARAD Advisory Board and Director General of MARAD were held by the same person which he said raised conflict of interest concerns.

He added that there was a need for an immediate and total review of the general system and operations at MARAD. He asserted that “Persons found culpable through dereliction of duties or willful acts to the detriment of the agency, should be sanctioned with penalties that match the nature of the infractions”.

Caribbean rum producers are joining forces with French group CIRT-DOM, to garner the best deal for their exports into major markets, particularly the European Union.

Rum producers of the Caribbean Forum, members of the West Indies Rum & Spirits Producers Association (WIRSPA), recently clinched a MOU with their French counterparts CIRT-DOM - the traditional rum producers of Martinique, Guadeloupe, French Guiana and Reunion, which are all Departments of France.

A release from WIRSPA on February 20 said that the two groupings, each representing a tradition of rum production that stretches back hundreds of years, have with this 6th accord, recommitted to working together in the interest of building the rum category based on authentic origin, common rules and promoting a level playing field against increasing competition from products which benefit from production subsidies.

According to Chairman of WIRSPA, Komal Samaroo, “We have a long history of collaboration with our French counterparts, almost 25 years since the signing of our first agreement in 1997. Together we face a sharp rise in non-traditional imports of rum into our traditional markets, especially the European Union and the UK. Many of these competing brands do not always follow the rules, and many benefit from extensive production and marketing subsidies which place us at a competitive disadvantage.

These developments, coupled with the impact of Brexit and the new trade deals being pursued by the UK, underline the need for joint action,” he said.