(Kaieteur News) – Finance Minister, Dr. Ashni Singh on Friday made it clear that the government will enforce strict contract management to ensure contractors deliver projects on time and on budget and will institute liquidated damages against companies that fail to meet contractual obligations.
He said, “the president and cabinet have taken a firm position as it relates to ensuring contractual compliance, that the contracts that we have with those who are providing goods and services are executed on time, in keeping with the specifications that are outlined in them and in keeping with the costs reflected in the contract and so stronger contract and project management are very much a priority for us and enforcement.”
In keeping with this stance, he said, “the cabinet is taking a firm position on the enforcement of liquidated damages in the event that you have time overruns.”
Ongoing construction activities at the Monkey Mountain Airstrip in Region Eight.
Dr. Singh noted that majority of government projects are completed on time, lauding his cabinet colleagues for supervising these works. He however acknowledged that there are instances where projects exceed their estimated deadlines.
As such, he explained, “The cabinet has taken a position that we must enforce and we will enforce the provisions as they relate to liquidated damages, to ensure that we have timely completion, unless, obviously, there are strong and compelling, extenuating or justifying circumstances.”
He said the directive regarding the enforcement of liquidated damages come directly from President Irfaan Ali who has instructed all ministers in his cabinet to ensure the respective permanent secretaries enforce these measures in contracts, particularly in relation to timely completion.
The announcement by the finance minister comes on the heels of a comment by the Prime Minister, Mark Phillips that the administration has not yet determined whether the contractor executing the country’s largest financial project in history- the Wales Gas-to-Energy development- will be slapped with penalties for failing to meet yet another deadline- by the end of 2026.
Lindsayca Guyana Inc., the company that was initially awarded a US759 million contract by the GoG to deliver 300 megawatts (MW) of electricity by the end of 2024 has failed consistently to meet promised deadlines with the project now expected to deliver a fraction of power by the end of 2026.
The delays have resulted in multimillion US-dollars losses for Guyana as the country’s rapid expansion continues to demand increased electricity supply.
While the company pushes to meet another deadline, the GoG could not definitively say whether the contractor will face any penalties if it fails again to deliver power to the country by the end of the year.
During a recent press conference, Minister of Public Utilities and Aviation, Deodat Indar said, “At the end of the year, myself and the Prime Minister have gotten the commitment from Lindsayca, the Gas-to-Energy (GTE) contractor that we will get one of the turbines that will generate 57MW of power.”
As such, Kaieteur News questioned government officials to say whether Lindsayca could face penalities for failing to meet the yearend deadline.
To this end, Prime Minister Mark Phillips explained, “We’re taking things one step at a time. We had a meeting with Lindsayca and we left the meeting with the assurance that they would reach the deadline for simple-cycle power in December 2026. Let’s give them an opportunity to deliver. When we reach that point we’ll determine the next step.”
Kaieteur News reported that the two-year delay of the Wales GTE project is expected to cost the country approximately US$884M or more than the initial cost of the two gas plants currently under construction.
Source: Kaieteur News
