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President of the Caribbean Development Bank, Warren Smith. (CDB file photo)
President of the Caribbean Development Bank, Warren Smith. (CDB file photo)
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The Caribbean Development Bank (CDB) on Tuesday said it reasserted in a recent meeting with Minister of Finance Camillo Gonsalves that there had been “no finding by the bank of fraud or corruption in declaring the misprocurement” in the Yarabaqua River Defence Project in St. Vincent and the Grenadines (SVG).

The bank, in a statement, said it declared misprocurement “as the procurement process was determined, on review, to be not in accordance with the bank’s procurement guidelines”.  

President of the Barbados-based bank, W. Warren Smith, and a team from the bank, met in Kingstown recently with the Gonsalves, and other representatives of the Government of SVG.

A CDB press statement said Smith highlighted the strong partnership with SVG since the bank commenced its operations almost 50 years ago.

He reiterated the bank’s determination to continue working collaboratively with the government to realise its desire for a better future for its people. 

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“The president acknowledged the ongoing public discussion on the Yarabaqua River Defence Project in St. Vincent and the Grenadines and the bank’s recent decision to declare a misprocurement on this project,” the statement said.

Smith stressed the importance of clarity with respect to CDB’s procurement practices, particularly as recipients of CDB-financed projects are responsible for undertaking procurement in accordance with prevailing CDB procurement policies and procedures. 

For capital projects, recipients typically hire experienced independent consultants to prepare the technical designs and to evaluate, and advise on, the procurement and supervision of contractors, the statement said.

Smith noted that CDB is not a party to the contracts awarded under a project. 

“It plays a supervisory role, checking that the procurement process undertaken conforms to its guidelines. The bank does not participate in the evaluation of bids or proposals. However, for major contracts, the bank will provide a ‘no-objection’ to key procurement documents, such as evaluation reports, before the process continues to the next stage,” the statement said.  

Against this background, Smith observed that misprocurement may result when a contract is not procured in full compliance with CDB’s policies and procedures. 

He stated that even if a contract is awarded after obtaining a “no objection” from CDB, the bank may still declare misprocurement in certain limited circumstances, including where it subsequently receives key information in relation to the process. 

Smith confirmed that the bank had originally granted a “no objection” to the award of a contract under the project, based on the bid evaluation report prepared by the independent consultants. 

IBI Group, the Canadian consulting firm that evaluated the bids has declined to comments on the CDB’s declaration of misprocurement.

Smith drew attention to SVG’s new Public Procurement Act, which was passed in December 2018 as part of an ongoing procurement reform programme for member countries of the Organisation of Eastern Caribbean States.  

Smith noted that with the passage of this act, SVG has one of the most robust legislative frameworks in the Caribbean. 

The process through which the Government of SVG awards contracts has come under scrutiny after the CDB withdrew funding for the project following an objection from a contractor.

The CDB, after an investigation following a complaint by Bally and Bally Investments Ltd., one of the tenderers, cancelled financing for the “Yarabaqua River Defence” project and ordered that the Kingstown repay any money already withdrawn for the project.

The decision by the CDB to withdraw financing for the “Natural Disaster Management – Rehabilitation and Reconstruction (December 2013 Trough Event) related-project, came after an investigation triggered by a Sept. 14, 2018 letter of objection to SVG’s Chief Engineer.

In his letter of objection, Cameron Balcombe, managing director of Bally and Bally Investments Ltd. complained about the award of the contract to Reliable Construction Ltd., another Vincentian firm.

Reliable Construction Ltd.’s bid was $1,421,576.

Balcombe pointed out that among the criteria for the award of the contract are that the bidder must meet minimum experience requirements in the key activities of gabion wall construction, reinforced concrete construction, and river training.

He noted that SVG is a small archipelago “and it is unlikely that major works costing over one million dollars would go unnoticed.

“I [am] confident, from my own knowledge and inquiries, that Reliable Construction Limited has not done any gabion basket or river training works of that magnitude or at all in this State or elsewhere to even qualify under the assessment as substantially responsive,” Balcombe wrote.

“Therefore, there has either been a false declaration made in their forms or unlawful and unfair intervention by someone of influence on their behalf,” the letter continued.

In a May 23, 2019 letter to Balcombe, Monica La Bennett, vice-president (operations) of the CDB, said the bank had conducted a thorough review of the procurement process of the award of the contract.

“As a result of this review, CDB has declared misprocurement in accordance with Paragraph 1.13 of CDB’s Guidelines for Procurement (January 2006), and will not be financing this contract,” La Bennett said.

She advised that all inquiries related to the matter be referred to the government of SVG.

Meanwhile, Leader of the Opposition Godwin Friday, weighed in on the issue at a July 30 press conference.  

He said that although the CDB did not use the word “fraud”, the CDB recognised and acted on the “fraud”perpetrated by the government in the award of the contract. 

Friday’s statement came as he was commenting on a July 22 statement by Edmond Jackson, chair of the Tenders Board.

In the statement, Jackson, who is also Director General, Finance and Planning, noted that the Barbados-based bank’s decision to declare misprocurement in the project did not contain any “allegation of corruption, fraud, impropriety or misbehaviour in public office by any official in the Government of St Vincent and the Grenadines or elsewhere”.

“Well, the CDB is a bank, not a police force or prosecutor,” Friday told the media. “So, naturally, the CDB would not make any allegation of fraud or corruption or anything of the sort.     

“Think about it; how many banks here in SVG have had employees steal from them and they never charged the employee with fraud? Usually, they fire them and, in most cases, that’s the end of it. 

“Well, it’s the same thing here. But the CDB saw the fraud, though, and they acted on it. They saw the fraud and they moved to end their involvement to recover their money from the fraud and normally that would have been the end of it for them,” the opposition leader said.

Friday said that because the Unity Labour Party government is misrepresenting the CDB’s position “to cover their corruption” the bank obviously felt obliged to release a statement in which it says “it is not the Bank’s practice to comment publicly on the specific details of individual procurement contract awards”.

3 replies on “No finding of fraud or corruption in declaring misprocurement — CDB”

  1. I really do not see how this advances us further along the way in an explanation for the grossness that had occurred, in the failed duty of care owed to us Vincentians.

    what is set out here has quite obviously failed to answer the necessary and pertinent question, as to why an unsuitable contractor, was awarded the building contract to do the necessary work by the Government.

    Why, when that chosen contractor had quite obviously grossly failed the “suitability criterions” needed for competence, as set out by the Development Bank!

    Surely what is sure needed is a “Public Enquiry” by a competent investigator! But will this family now give us one? Hardly likely!

  2. Its most unfortunate that banks always try and hide fraud against them, as admission of a weakness in a system affects how their investors view them. My opinions is that this is a white wash of the truth.

    If the government gave a contract to an unqualified company whilst unduly accepting them as qualified is in my view fraud against the lender. Because the lender was relying on the government to vet the applicants and not to issue a contract to an qualified party. If absolutely nothing was done wrong CDB would not have cancelled the contract and ask for the money back.

  3. the usual suspects…… as usual misrepresenting the facts .
    This IDIOT above……….how can the Gov vet for the lenders and issue a contract without the APPROVAL OF THE BANKS CONSULTANTS ……..notice the consultants remain silent …..NINCOMPOOPS !!!! LOL @ the FOOLERY

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