The award of a contract in St. Vincent and the Grenadines for which the Caribbean Development Bank (CDB) later declared “misprocurement” was “essentially a fraud against the CDB”.
“It should be evident to all by now that what we are talking about here is the most recent example of the corruption by the ULP (Unity Labour Party) regime, and I want to set out the basic proposition that is simple and clear,” Opposition leader Godwin Friday told a press conference in Kingstown on Tuesday.
“It is clear, despite all the protestations and long, drawn-out attempts at explanations by [Prime Minister] Dr. [Ralph] Gonsalves and his acolytes, that there was fraudulent misrepresentation in the tendering process for the project, resulting in what was essentially a fraud against the CDB.
“The CDB was made aware of the issue, the CDB investigated the issue and the CDB acted to recover its money and preserve its good name,” Friday said.
The Barbados-based CDB has concluded that the contract for the “Yarabaqua River Defence” project should not have been awarded to Reliable Construction Ltd., whose bid was EC$1,421,576.
The bank cancelled the contract after conducting a review, triggered by a complaint by Bally and Bally Investments, an unsuccessful bidder.
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.
Gonsalves has said that his government will finance the project and will keep Reliable Construction as the contractor, without putting the project out to tender again, saying this will be too time-consuming even as homeowner’s properties would be at risk of damage or destruction by bad weather if the project is put on pause.
Reliable Construction has refused to answer questions from iWitness News about its experience in gabion wall construction and river training.
Friday noted that the mission of the CDB, which was established in 1970 to act as a development bank for Caribbean countries, is to “reduce inequality and halve the incidence of extreme poverty by the end of 2025, through supporting inclusive and sustainable growth and promoting good governance”.
“You will note the reference above to ‘good governance’. About that particular subject, the CDB says that the bank ‘strives to ensure that its processes, practices and systems conform with, and adhere to applicable corporate governance standards’,” Friday said.
He said that as a result of its strict adherence to international standards of good governance, the CDB enjoys top of the line ratings on the international financial markets.
“Indeed, the CDB is one of the most highly regarded institutions in the entire region, possibly the world, and justifiably so,” he said.
A “CDB Statement on Procurement Processes”, issued last Thursday, said it is not the bank’s practice to comment publicly on the specific details of individual procurement contract awards.
The bank further said that the information in the statement “is not a comment on a specific project”.
The statement, however, said that over the past five years, US$358.5 million in contracts have been awarded to CDB-financed projects across its 15 borrowing member countries.
“Recipients of the financing are responsible for managing CDB-financed projects, including the award and administration of contracts under the projects, in accordance with the bank’s procurement policies and procedures. These are underpinned by principles of economy, efficiency, fairness and transparency,” the bank said.
The statement continued:
“Where a contract is not procured in accordance with its policies and procedures, CDB will declare misprocurement and will cancel the financing for the contract even if a no-objection had already been issued by the Bank.
“In line with international best practices, CDB’s internal governance structure includes four independent offices — Office of Integrity, Compliance and Accountability, Office of Independent Evaluation, Office of Risk Management and Internal Audit Division. These multiple lines of defence have provided effective safeguards and ensured that the Bank adheres to the principles enshrined in its procurement policies and procedures.”
At Tuesday’s press conference, Friday was asked how, in the absence of more detailed information from the CDB, does one arrive at the conclusion that corruption or fraud was perpetrated.
“I am looking at all the circumstances,” he said. “The onus must now be on those persons, the parties that were involved in the awarding of the contract and the execution of the work.”
He said that the CBD does not flippantly declare misprocurement, adding that when this occurs, “the onus is on those persons who are involved in the process to demonstrate otherwise.
“Not by making some public declaration or flying a banner in the sky and saying no fraud, no corruption,” Friday said.
“I think the onus is there [on the government] to say let’s satisfy the public that this is a serious problem because the CDB doesn’t make this decision lightly, we have an obligation to satisfy the public as to what exactly went wrong and then to make this known to the public.
“Instead, what we are having here, it seems to be more obfuscation and moreover, it is an admission that there is nothing really wrong because they are going ahead the same way. And it is either that the CDB doesn’t know what they are doing or the government, as I say, is contemptuous of the people, the taxpayers of this country and would simply do whatever the hell they like,” he said.
The government has defended its Tenders Board’s decision to award the CDB-financed contract to Reliable Construction, saying that that they did so on the advice of the bank’s consultants and after receiving a letter of no objection from the bank.