Special audit for D’Urban Park project
- Auditor General
Given the amount of money involved, Auditor General Deodat Sharma says that a special audit will be conducted into the controversial, billion-dollar D’Urban Park Development Project (DPDP).
Yes, I will do it… It is part of the 2016 audit under the Ministry of Public Infrastructure,” Sharma revealed when contacted by Stabroek News.
Former Auditor General Anand Goolsarran is also calling for a forensic audit of the project. In a column due to appear in Wednesday’s issue of Stabroek News, Goolsarran says that there were missteps in the execution of the D’Urban Park Project.
“This was perhaps due to a lack of proper advice in terms of adherence to the relevant constitutional, legislative and regulatory requirements relating to the use of funds garnered for the project…,” Goolsarran says.
“In the final analysis, it is the taxpaying public that has to come to the rescue of meeting the financial obligations of the project which, with careful planning, might have resulted in significant cost savings. The past cannot be undone but whatever happened in relation to the project should serve as an important lesson for the avoidance of a repeat of the mistakes made.”
Having commissioned dozens of forensic audits since it entered office 19 months ago, the planned special audit of its flagship D’Urban Park project will be a severe embarrassment to the APNU+AFC administration. While President David Granger and some of his senior ministers have attempted to play down the public concerns about the project, these continue to be raised.
A shadowy company, Homestretch Development Incorporated (HDI), was formed to manage the site and is now owed approximately $798 million. The government took over the project after HDI floundered in the lead up to 50th Independence anniversary celebrations. By that time, in the name of the government, it had collected donations and materials towards completing the site. When it was removed from the project, it was taxpayers’ money that had to be utilized.
The 2015 Auditor General’s report states that $36.509 million from the Lotto Fund went towards the rehabilitation of D’Urban Park without parliamentary approval, and government is now seeing additional funds to pay off HDI.
The matter was a hot topic during the Budget 2017 debate and later during the scrutiny of the Estimates of Expenditure. The government has said that it can only provide $500 million to HDI and those who don’t get their money could sue HDI.
Sharma told Stabroek News that the special audit would likely begin early next year. As of now, the planning process for the 2016 audit has started. He went on to explain that when the 2015 audit was completed late last year, planning for the 2016 audit began; this was around September.
“We are planning now and preparing to do the audit,” he stressed.
Approximately half a billion dollars were spent by government on the project and despite this, the National Assembly was asked to approve extrabudgetary spending.
In August, Minister of Finance Winston Jordan tabled Financial Paper 1/2016 in the House, which covered $931,018,292 in extra government spending from January 1 to July 28 this year.
The figures showed that an initial $72.8 million was previously approved for the D’Urban Park Development Project and government was seeking approval for a further $406.7 million, which had already been spent. The $479.6 million total which was spent by government does not include donations from companies and citizens.
Previously, Minister of Public Infrastructure David Patterson had said that $150 million was provided from the Contingencies Fund to complete Phase 1 of the project. In a statement in May, he had also revealed that donations were made to a registered company under a separate head outside of the ministry.
The 2015 report, which was laid in the National Assembly on October 13 said that of the $305.826 million taken from the Lotto Fund, $36.509 million went towards the rehabilitation of D’Urban Park,
Last week, Patterson came under fire in the National Assembly after it was discovered that $500 million were allocated to his ministry to pay off debts for the controversial project and the private company which mobilized cash and kind for it.
During the scrutiny of the Budget 2017 Estimates of Expenditure, Opposition People’s Progressive Party/Civic (PPP/C) Member of Parliament (MP) Juan Edghill challenged Patterson, regarding the allocation.
Patterson then explained to the Committee of Supply that the money was to be used to pay off expenses for the project and its private building company, HDI.
The minister informed the House that the company had submitted an audited report which showed that a sum of $60 million was raised in donations to commence works on the DPDP site
He added that government has indicated that it can “only accommodate $500 million as a full and final settlement, so what that means is that HDI would have to make some apportionment relative to the debts owed… If you were owed $2 million by HDI, if they say that you could only get $1.2 million, then you could either accept the $1.2 million as a full and final settlement or you could sue HDI… for the amount that is owing to you.”
Goolsarran, in his column, has raps the government over this stance.
“The minister indicated that the government could not afford more and that any aggrieved contractor was free to sue the company. This is an extraordinary statement coming from the minister, which sets in train a dangerous precedent since the government, through whatever mechanisms it chooses, can enter an agreement for the supply of goods and services and refuse to honour its obligations. It is both legally and morally wrong to deny payments to suppliers and contractors who have acted in good faith. The government must also accept that it has failed badly in the effective planning and execution of the project and in ensuring that reasonable estimates of the associated costs were reflected in the National Budget, notwithstanding that some of the costs were met from private contributions in cash and in kind,” Goolsarran asserts
Patterson told the National Assembly earlier this month that on November 22, HDI wrote to the Finance Ministry asking for assistance with liabilities owed to persons and companies that contributed services and materials for the project.
The minister started reading from a long list of names of contributors to the project, including Baishanlin, Courtney Benn Contracting, BK International, Palm Court, National Hardware, Buxton Gas Station, and Puran Brothers.
Edghill asked the minister to provide the names of persons owed, how much was owed, and what works were conducted, as well as whether the “project that from all estimation cost $900 million of taxpayer money plus $60 million in cash and kind donations, can be defined as a project done by private funding.”
He also questioned the procurement process used to engage persons.
Several days later, Jordan informed that the $500 million allocated to pay debts owed to HDI for the controversial project was the full and final settlement the government was willing to make.
While acknowledging that approximately $798 million was owed by the company, he maintained that HDI will have to apportion the $500 million in a manner that will satisfy its creditors who will either accept what is offered or take HDI to court. Meanwhile, PPP MP Anil Nandlall took issue with Jordan’s comments saying that government was adopting a wrong approach.
“Ministers of this government continue to exhibit a reprehensible aura of arrogance, bullyism and a ‘wrong and strong’ approach in their public outpourings. The latest outburst has come from the Minister of Finance in relation to the over $750,000,000 owed to contractors and suppliers of materials for the D’Urban Park project,” Nandlall said in a statement released to the media.
He said that Jordan boldly asserted that the government will pay only $500 million and will not pay the outstanding $250 million and when pressed by reporters said those owed “can take it or leave it” and sue the private company Homestretch Development INC, a company that no one excepting, a few in government, knew existed until recently. He said that as far as the public was aware, the company had no assets and no known capabilities to pay $250 million.
“In a nutshell, the Minister of Finance is telling these contractors that the government has, or will rob them. This is the same minister who in his budget speech only two weeks ago said that this Government is committed to the rule of law and will respect the constitutional and legal rights of the people of Guyana.
It is now clear that apart from being robbed everyday by bandits, the government has now signalled an intention to rob the Guyanese people, as well. This must be an unprecedented approach for a government to take in the modern world,” Nandlall, the former Attorney General stressed.
He said that Jordan’s posture came on the heels of Minster of Natural Resources Raphael Trotman’s statement that people need to stop lamenting about the heavy tax burdens imposed by the budget and should “get busy” and the government’s arrogant and outright rejection of an invitation to meet with the Private Sector Commission (PSC) and the Labour Movement to discuss the 2017 budgetary measures.
According to Nandlall, this exhibition of arrogance and intolerance must be strongly rejected. “My advice to the persons who are owed the $250,000,000 is to sue the government, the private company and its directors/shareholders, personally. The corporate veil will not protect directors and shareholders who have fraudulently and deceptively withheld from the public that they were dealing with a private company but in fact deliberately led them to believe that they were dealing with the Government of Guyana,” he said.