Tax payers cheated of $150 million
scandalous Sussex Street Drug Bond deal involving a monthly rental of $12.5 to a friendly city businessman is to continue under the end of year. This is a promise by Health Minister Volda Lawrence. By then tax payers would have lost some $150 million going down the drain in what is considered to be among the most blatent corrupt deal under APNU/ AFC government.
Despite widespread condemnation of the deal which is widely believed to be a payback for campaign funding during the last election, the government has bluntly refused to terminate the contract wich was handed out in violation of all procurement laws and practices.
After the scandal broke out it was found that the building was an ordinary rental building, unfit to store drugs. The owner of the premises had no previous experience in drug storage. Further, the government had enough drug storage space. An experienced private drug importer had offered to store drugs free of change but this was denied.
Lawrence’s pronouncement comes in wake of the concern expressed by opposition parliamentarian Anil Nandlall that one year after the scandal over the rental of the property, the contract was yet to be terminated.
Despite the controversy over the rental of the property, the Ministry budgeted $ 150 million for the full year’s rent for 2017. Observers had expressed the view that the contract should have been scrapped immediately and that those monies should never have been approved.
Controversy erupted last year after it was revealed that government was paying businessman Larry Singh, of Linden Holding Inc., a monthly rental of $12.5 million for the building at Sussex Street to store drugs.
A Cabinet subcommittee was convened after former Public Health Minister Dr. George Norton had been found lying to Parliament in relation to the rental of the bond.
The subcommittee’s report had stated that the lease should be revisited and strengthened and if there was a refusal by Linden Holding Inc, the landlord, government should give a year’s notice of a termination of the lease and build its own facilities in the intervening period. “With respect to the rental sum of $12,500,000, it is the subcommittee’s considered opinion that the value should be re-assessed as it is likely that a similar facility could be obtained at a lower rate,” the report said.
Just over a year ago, the government in response to the subcommittee report said that the lease was “undoubtedly undesirable” and that it would consider shortening it while expediting the search for another facility. A year later, the lease continues, meaning that Singh contin- ues to collect a large rental. It is unclear if the rental was adjusted.
Nandlall said that despite the sub-committee’s recommendation of an early termination of the five-year contract, it had not been terminated. “The nation’s taxpayers [have] so far lost nearly 200 million dollars in the process and the Treasury continues to bleed at 14 million dollars month. Yet we are told that we cannot afford to offer subsidies to our pensioners in relation to water rates and electricity bills; we are told that we cannot afford to remove VAT from private education for our children, medical supplies for our sick, educational supplies for our students, agricultural and mining equipment for our farmers and miners; we are told that we do not have money for the sugar industry so tens of thousands of people are being put on the breadline,” Nandlall stressed.
The rental was only made public following questions posed by Nandlall in the Committee of Supply in August, 2016. At that time, he reminded that over $50 million had already been paid in rent but the bond was never used.
The deal with Singh to rent the Sussex Street property for use as a drug bond was said to have been initiated by the APNU+AFC government because extra storage capacity for drugs was needed. This was despite that fact that a government bond existed at Diamond on the East Bank, where more pharmaceuticals could be stored.
Singh had never run a bond storage operation before and critics have said the deal appeared to be a sweetheart arrangement to give business to a PNCR supporter. There have been many questions as to how Singh was chosen given the fact that there was no public tendering for the rental of that building.