Dear Editor,
It is learnt that the PS of the Ministry of Agriculture was instructed to submit her resignation for refusing to violate contract management procedures relating to some $10 billion in contracts to various contractors who have been in default. The contracts were for pump stations and other infrastructure work. The works have been stalled for more than two years and PS is asked to sign off on them.
The PS is a soft spoken woman of integrity and doesn’t want to run afoul of the laws and rules governing management enforcement of contracts. Persistently pressured to approve past contracts that violate contract management policy, and instructed to resign, the PS submitted her resignation rather than be in violation of contractual management rules. Who will replace her?
Rules on contracts relating to nepotism and friendship in awarding government contracts were violated as some ten billion dollars in contracts given to kits, kins and friends of high ranking officials who lack experience or a history of private construction and or doing government contractual works. Some are new contractors. All are in contract management default.
The rules governing large contracts require performance security and Advanced payments security. Before an awarded contract is signed, the contractor must obtain a security bond of between 10 to 15% of value of contract made out to the government ministry. When the contract is signed, government gives out advance payment of 20% of the value of the contract for mobilization. Favoured contractors got 35% advance payments for mobilisation. In addition to the 10 to 15% performance security, there is a mandatory advanced payment security (insurance bond) of same amount as the advanced payment for the contract.
So before work begins, some 30% to 45% of the value of the contract in two security deposits (performance and advanced payment) must be assured to the Ministry through a bank or an insurance company bond. The security deposits are time limited for a year and must be renewed if the contracts will be completed beyond a year. As the security termination date approaches, the contractors are reminded to renew it.
The two above securities have not been renewed in some ten billion contracts. In the above case relating to the $10 billions, the contracts were awarded more than two years ago. The securities in the amount of nearly $4 billions should have been deposited to the Ministry. Those funds should have been forfeited over a year ago for failing to complete the work.
The contractors accepted advanced payment funds but are not fulfilling the contract. Very little work was done two and a half years later. Contractual management rules should have been enforced and both securities should have been confiscated. The PS insisted that they be enforced. It is learnt that the PS was instructed to close eyes on management rules governing both securities. She has refused to comply as such action would be illegal, and she does not want to compromise on integrity. Were she to carry out the instructions, the ministry and government stood to lose some $4 billion from the $10 billion in contracts that have been in default. That is money that could put $200,000 in the hands of every poor family. In addition to losing the $4 billions, the Ministry will have to re-tender the work that will cost additional money well beyond the $10 billion that was contracted out.
Why is a PS victimized for doing the right thing and enforcing the law? Why are contractual rules violated? And who are the beneficiaries? It is rumoured that that a PS from another Ministry who had a run in with US authorities in Miami airport earlier this year is being considered as the replacement. The Vice President was informed of the management rules violations at the Ministry of Agriculture. Will he take action or close his eyes to this corruption?
Yours truly,
Rudesh Jodha Baksh
