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Govt is right to give Fedders-Lloyd Specialty Hospital contract- Ralph Ramkarran

Representatives of Fedders-Lloyd at the Liliendaal construction site for the Specialty Hospital.

Former House Speaker, Ralph Ramkarran and the main oppositiion People’s Progressive Party Civic (PPPC) are at odds over whether the Indian company, Fedders-Lloyd, should have been awarded a contract to build a Specialty Hospital that has been mired in a three-year long controversy.

Government has cited time constraints in agreeing to give Fedders-Lloyd the contract to build the hospital. The administration has also sought to justify going ahead with the project, which it had opposed while in opposition, on the grounds that India has said there was need for a Specialty Hospital to supplement primary health care institutions.

Writing in his weekly Conversation Tree (www.conversationtree.gy) column, this week titled “Clutching at Straws,” Ramkarran said nothing was wrong with the coalition handing the contract to Fedders-Lloyd because it was the lowest bidder.

“Taking into consideration the fact that only two entities came close, the crooked friend of the then Government, Surendra Engineering, and Fedders Lloyd and the qualifications and reputation of Fedders Lloyd together with the further delay that a new bidding process would occasion, the Government made the right decision to sign the MOU with Fedders Lloyd and to proceed later without a new bidding process,” he reasoned.

Ramkarran said Guyana’s Treasury would stand to benefit from a deal with Fedders-Lloyd because it would take into account work already done at the Liliendaal site for the health care institution and the use of old prices for materials and workmanship. “There is absolutely no reason why a new bidding process must be undertaken when the contract is ready to be awarded. If the value of the works already done is subtracted from the contract price, a new contract price is arrived at. The Government gets an advantage because the bid by Fedders Lloyd, the lowest at the time, is three years old. Prices have risen since then. A new bidding process is therefore to Guyana’s disadvantage,” he said.

Back in September 2012, government had explained that Fedders-Lloyd had lost out on the contract because it had failed to comply with the administrative rules of the tendering process, chiefly offering a 23 percent discount on the original price without including it in the actual bid of US$22.96 million. The Health Ministry at that time had said that the National Procurement and Tender Administration Board (NPTAB) had frowned on Fedders-Lloyd’s bid because it had failed to meet “administrative compliance.” “The Ministry of Health is not responsible for the lack of knowledge and or understanding of Fedders Lloyd to the evaluation criteria. The evaluation criteria utilized for the assessment of the bid-as is the standard operating procedure for all tenders in Guyana-is administrative compliance, followed by technical compliance, and followed by price. Clearly neither technical nor financial compliance is of any material value if the tenderer fails administrative compliance,”  the ministry had said.

The Health Ministry at the time had said that one of the reasons for Fedders-Llloyd’s disqualification was that it had obtained its bid security from the Bank of Nova Scotia in Guyana rather than from a bank in India with correspondent relationship with a bank in Guyana.  The Ministry had said that it is not the lowest bid that necessarily wins but the “lowest evaluated bid.”

Opposition Leader, Bharrat Jagdeo  has since called for the release of the evaluation report on all bids that had seen Surendra Engineering being awarded the contract. Government later scrapped it and sued that company for damages which were awarded earlier this year by the Guyana High Court.

The prominent Senior Counsel argued that there was no reason for a new contract or bidding process. “There is no rule or principle which dictates that for a new contract, a new bidding process has to be undertaken,” he said.

Ramkarran seized the opportunity to lash out at the then PPPC-led administration for prequalifying the New Guyana Pharmaceutical Corporation and handing out numerous radio licenses. The Government cannot take into account, but can certainly alert the public, that those who are now demanding a new bidding process tolerated for a decade or more the extraordinarily stringent pre-qualification conditions that ensured, contrary to Guyana’s interests, that only one entity was pre-qualified to supply drugs to the ministry of health. Those same folks who now cry foul presided over the giveaway of radio and TV licences worth billions without a bidding process,” he said.

There is absolutely no reason why a new bidding process must be undertaken when the contract is ready to be awarded. If the value of the works already done is subtracted from the contract price, a new contract price is arrived at. The Government gets an advantage because the bid by Fedders Lloyd, the lowest at the time, is three years old. Prices have risen since then. A new bidding process is therefore to Guyana’s disadvantage. Taking into consideration the fact that only two entities came close, the crooked friend of the then Government, Surendra Engineering, and Fedders Lloyd and the qualifications and reputation of Fedders Lloyd together with the further delay that a new bidding process would occasion, the Government made the right decision to sign the MOU with Fedders Lloyd and to proceed later without a new bidding process.

Ramkarran also defended his colleague former Executive Member of the PPPC, Khemraj Ramjattan, against that political party’s claim that the Fedders-Lloyd deal amounted to corrupt transaction because Ramjattan had been advocating in favour of that company. The former House Speaker also rubbished the PPPC’s claim that Ramjattan has violated the National Assembly’s rules also known as Standing Orders.

“This Standing Order does not preclude a member qua member from seeking to protect his or her constituents from fraud in the national bidding process involving US$18 million, even if a party is the member’s client. Mr. Ramjattan would have been failing in his duty to his constituents and to the nation had he not alerted the nation and his constituents to the dubious selection of Surendra Engineering, even if Fedders Lloyd was his client, which he has denied. It is this act of exposure, which has made Mr. Ramjattan the target of the Opposition, which interprets the Standing Order to suit its own sleazy objectives.

“Vice President Khemraj Ramjattan has played an honourable role in exposing the flawed bidding process and the shallow, whimsical, reasoning that led to Surendra Engineering being awarded the contract. This flawed award has led to the loss of $900 million by the unsuspecting Guyanese taxpayer resulting from Surendra Engineering’s fraud. Mr. Ramjattan did a service to Guyana, albeit unsuccessful, in preventing loss to Guyana by the fraud of Surendra Engineering,” he also said.

Ramkarran partly blamed the coalition government for the quagmire that its public image appears to have fallen into. “The Government has not displayed any enthusiasm for an effective public relations system and capacity, which would have answered the criticisms that are being made in gloating and triumphant glee by the Opposition. The first criticism is of the MOU with Fedders Lloyd without a new bidding process and the second relates to the role of Vice President Khemraj Ramjattan in the matter. 

The failure of the Government in dealing promptly with these matters facilitates accusations of nepotism and corruption by the most corrupt administration in post Independence Guyana, which now holds office as the Opposition,” he said.