Gov’t sues BK, North American Insurance over construction at Yarrowkabra Secondary School

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Attorney General and Minister of Legal Affairs, Anil Nandlall

Attorney General Anil Nandlall has sued BK International Inc. and North American Fire and General Insurance Company Limited for more than $717.8M over the construction of the Yarrowkabra Secondary School on the Linden-Soesdyke Highway.

In the lawsuit filed in the High Court, the Attorney General said more than eight months after the contract was signed between the Ministry of Education and BK International – the contractor, only 5 per cent of the works had been completed in breach of the Contract Agreement and the Work Execution Schedule.

The contract was signed on December 31, 2019 for the construction of YarrowKabra Secondary School at the cost of $826,757,737.

In accordance with the Agreement, the contractor submitted to the Education Ministry a performance bond in the sum of $82,675,774 for the period December 2019-December 2020, and thereafter for a defects liability period until January 1, 2022 issued by the insurance company on its behalf in favour of the Ministry.

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Additionally, approximately $165.3M was disbursed to BK International as a form of a mobilization/advance payment. Based on a revised order, which was issued by the Ministry on March 12, 2020, the multi-million dollar project is scheduled to be completed on March 11, 2021.

However, VIKAB Engineering Consultants Limited, which was hired to oversee the project, subsequently informed the Education Ministry that the contracting company failed and or neglected to complete the scope of works in accordance with the contractual work execution schedule, which was agreed upon.

“In the result, VIKAB reported this flagrant non-compliance with and breach of the Work Execution Schedule,” the Attorney General said as he laid down his grounds for the Application.

He added: “It will be contended that the First named Defendant failed or neglected to comply with the Work Execution Schedule because the First named Defendant failed and or refused to hire a sufficient number and quality of personnel suitable to perform the works in accordance with the Work Execution Schedule and the terms of the Contract Agreement.”

The Attorney General said VIKAB, based on the request of the Education Ministry, conducted an assessment of all the works done by BK International, and concluded that there was breach of the agreement.

“…the First named Defendant had only executed a total of five (5) percent of the works after a period of approximately five (5) months had elapsed which constitutes almost fifty percent (50%) of the contract period,” Nandlall detailed.

Notwithstanding the breaches, the contracting company has thus far received approximately $220.2M as payment for works done under the contract inclusive of $54.8M issued as an interim payment.

Now, the Attorney General is claiming general damages in excess of $100M against BK International for breach of the contract; another $82.6M as liquidated damages pursuant to the provisions of the contract; and $82.6M due, owing and payable by the company under the performance bond issued to the insurance company.

The Attorney General is also claiming $165.3M due, owing and payable by BK International for the advanced payment guarantee issued by the insurance company.

He also wants “an Order for Restitution from the First named Defendant in the sum of (one hundred and thirty seven million one hundred and eighty four thousand seven hundred and eighty two dollars) $137,184,782 constituting payments to the First named Defendant for which there were no works done,” and damages in excess of $50M for trespass committed by the company from November 2, 2020.

For aggravated damages, the Attorney General is claiming another $100M.

“Alternatively, an Order of Restitution against the Second named Defendant for all monies owning on the Advance Guarantee and Performance Bond to the Government of Guyana,” the Attorney General submitted.



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