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Govt sues Surendra Engineering for almost GUY$1 B over Specialty Hospital

The construction site for the Specialty Hospital, Liliendaal

The Guyana government has sued the Indian firm, Surendra Engineering, for almost GUY$1 billion in damages for alleged breach of contract and alleged corrupt or fraudulent transaction in connection with the failed construction of the US$18 million Specialty Hospital.

The writ claiming an estimated GUY$991,371,520 was filed on October 16 and the company has been given until December  3 to make an appearance.

In High Court documents seen by Demerara Waves Online News, Attorney General and Minister of Legal Affairs, Anil Nandlall states that Surendra Engineering has failed to design and complete the architectural drawings and building plans for which they received payment.

Nandlall adds that the Mumbai-headquartered company failed to mobilize, establish the site at Liliendaal, East Coast Demerara; supply civil engineering materials and other works listed in the contract.

In its Statement of Claim, the government further adds that Surendra Engineering failed to properly account for the advance payment of US$4,285,440 by not submitting payment receipts.

Government also claims that the defendant failed to renew/ provide the Advance Payment Guarantee and the Performance Bond for the period March 12, 2014 to present. But on July 24, 2012 submitted drafts of Advance Payment Guarantee, Performance Security and Insurance from Worldwide Bankers Re Company Limited, 22-24 St. Vincent Street, Port-of-Spain, Trinidad and Tobago for government’s approval.

The particulars of the alleged corrupt or fraudulent practices are that Surendra Engineering attempted to obtain  an Advance   Payment   Guarantee and  Performance   Bond  with  a  company   not  registered   as  an  insurance company   under  the  Insurance   Act,  Cap  84:01  of  Trinidad   and  Tobago, named  ‘Worldwide   Bankers   Re  Limited   purportedly   located  in Trinidad and Tobago;

According to the Attorney General’s Statement of Claim on behalf of the government, Surendra Engineering submitted    a  document    dated    13th  January,    2012 purportedly   emanating   from  Central  Bank  of  Trinidad   and  Tobago   and purporting   to  inform  that  Worldwide  Bankers  Re Limited  had  more  than five   (5)   years   in   the   reinsurance    and   coinsurance     business    and   is authorised   to  conduct  those  operations   since  1998. However, the Guyana government was informed  by the Central  Bank  of Trinidad  & Tobago  by  letter dated  the 2nd  September,  2014, was not generated  by Central  Bank of Trinidad and  Tobago;

“The Defendants   submitted fabricated,  unsigned  and sometimes   inflated invoices   with   no  evidence   of  actual  payments   made   or  to  support   the expenditure   claimed,” added the Attorney General.

Listing the claim for damages, the Guyana government  wants the High Court to award GUY$100 million for breach of contract and special damages amounting to US$4,285,440 (GUY$891,371,520).

A breakdown for special damages shows that US$3,636,000 or 20 percent Advance Payment was paid on December 27, 2012 another US$505,440 for design services and US$144,000 for site mobilization on November 18, 2013.

“The Defendant failed to perform their obligations under the terms of the Contract and to account for the advance payment of US $4,285,440 that is, submit payment receipts. Instead the  Defendant  submitted  fabricated,  unsigned  and sometimes  inflated invoices  with no evidence of actual payments  made  or to  support  the expenditure  claimed,”  states the Statement of Claim.

Government also wants the Commercial Division of the High Court to award interest, costs and further or other orders.

Surendra Engineering was contracted on September 14, 2012 to design and build the Specialty Hospital with a US$18 million line of credit from India’s EXIM BANK.