The government of St. Vincent and the Grenadines is in talks with the Barbados-based Caribbean Development Bank (CDB), which, last month, rescinded financing of a project after a review.
The bank concluded that the contract for the “Yarabaqua River Defence” project should not have been awarded to Reliable Construction Ltd., whose bid was $1,421,576.
The bank cancelled the contract after conducting a review, triggered by a complaint by Bally and Bally Investments, an unsuccessful bidder. It also ordered the government to repay, with interest, the money drawn down from the loan, which Prime Minister Ralph Gonsalves said is some $142,000.
The bank later waived the order to repay the amount.
Bally and Bally Investments said Reliable Construction Ltd., did not meet minimum experience requirements in the key activities of gabion wall construction, reinforced concrete construction, and river training.
The firm’s managing director, Cameron Balcombe told the CDB “there has either been a false declaration made in their forms or unlawful and unfair intervention by someone of influence” on behalf of Reliable Construction Ltd.
Speaking on radio on Sunday, Gonsalves said:
“But all of this would have been assessed by the consultants, the independent consultants and also the CDB man who was the point man on this project, who gave the no objection.”
He said that when the CDB conducted its review, it concluded that Reliable Construction Ltd. should not have been granted the contract “on the basis, I have been advised, that they did not have the experience and so on to do it, but that’s not a view which is shared by other people”.
Gonsalves further said:
“When you are doing a contract, depending on the size of the contract, depending on their rules, the conditions, you’d want to see that the company which is doing it has all the capabilities.”
He said that sometimes this relates to how much work the firm has done over a particular time period, the nature of the work and the magnitude of it.
The prime minister said that the CDB said in a letter on Aug. 13, 2018 that I had no objection to the government of SVG awarding the contract to Reliable Construction Ltd., for the sum of 1,421, 567, VAT inclusive.
“Now, if you are sitting down with the Tenders Board and you’re reviewing all the documents, the consultant says that’s the better fella, the best of the seven bids, the chief engineer is telling you yes, CDB gives you no objection, … what will you do at the tenders board unless you see something which was glaring, something which jumps out at you and say, ‘No, no there must be a mistake here, man. We have to go back to the consultant? We have to go back to this no objection from the CBD’,” Gonsalves said.
The prime minister said the technical people within his government are “ interrogating the question” of whether the IBI consultancy group, which evaluated the bids, “had acted wrongly”.
“They are paid for under the contract. They are the design and supervision consultants for the entire NDM project you know. Not just that one alone, not just that one alone,” he said.
“But clearly, the consultant thought it was in order, the chief engineer sent it on and the CDB official who was in charge of the project overall, that he gave a no objection.”
Gonsalves said the Director General of Finance and Planning, who is chair of the Tenders Board, told him the no objection that was given by the CDB official “was of significant persuasive value in informing the recommendation by the Ministry of Transport and Works to award the contract to Reliable and that it was also highly persuasive to the Tenders Board to approve the said award”.
The prime minister said he noticed a letter being quoted by the principals of Bally and Bally that either somebody made a false declaration or there was some undue influence from somebody higher up.
“Now, when the story first came, I was not bothering with it, because I can’t respond to everything, until the parliamentary opposition got involved and they want to take that line that [there is] undue influence and corruption,” he said.
Commenting on the development, last week, Member of Parliament for East Kingstown, Arnhim Eustace, a former senior CDB executive, said that bank’s decision to withdraw funding for the project is confirmation that Kingstown has broken the bank’s rules for the award of contracts.
Responding to the opposition, Gonsalves said:
“I don’t think these people understand how the process works. They think that Julian, and or Ralph, if money is there from the CDB, they leave the money and Julian and or Ralph simply say, ‘Give Reliable.’”
Gonsalves said his government is in discussion with the CDB about the matter, “because the question is, given the CDB’s involvement, should they not be estopped from saying that the money which has been disbursed should be paid back by us.
“Meanwhile, Reliable transport, Reliable Construction, has started the works and from all reports, they are doing the work fairly well. Now, they have to stop now,” he said.
Gonsalves said that because of his government’s work in strengthening the nation’s procurement procedure, the government has approved an $80 million policy loan at 0.5 per cent in interest over 30 years.
He further noted his government’s passage of the Procurement Act last December.