Govt. still to recover ‘Fip’ Motilall’s performance bond

The Guyana Government is yet to receive any of the money claimed under the performance bond that had to be lodged with the Hand in Hand Insurance Company to the tune of some US$1.5M. This past week, Head of the Presidential Secretariat, Dr Roger Luncheon, while refraining from being definitive on the matter, said that he was unaware, “which probably means no,” that the matter has been resolved to the satisfaction of the administration. That bond was negotiated and brought into force when the contract with Makeswhar ‘Fip’ Motilall’s Synergy Holdings was signed in January 2010, for an eight-month duration.

Makeshwar ‘Fip’ Motilall

That meant that for the latter half of 2011, Synergy Holdings Inc. was operating with an expired bond, pursuant to its stipulations. The bond did carry a stipulation that claims could be made for six months following its expiration with that time line coming to an end last Wednesday. Government did lay claims prior to this deadline, but the claim did not mean automatic payment. Hand-in-Hand had also issued a mobilization bond to Synergy Holdings, but that too expired. Hand-in-Hand in its financial report for the company in 2010 has listed under Contingent Liability, the Amaila Falls Hydropower Road project. In that report it was stated that the Government of Guyana had granted to contractor, Synergy Holdings Inc., the authority to construct the road to Amaila Falls and the Transmission Line Clearing Project. It said that on March 31, 2010, Hand-in-Hand on behalf of Synergy Holdings Inc., issued advance Mobilisation and Performance Bonds totaling US$1,540,000 each. “At the onset, these bonds were collaterized by a guarantee from Wm Fogarty’s Ltd to the extent of US$500,000 for the initial four-month period.” The Financial Report for Hand-in-Hand also said that the, “Advance Mobilisation Bond which expired on November 18, 2010, had since been released by the Government of Guyana.” It further states, “The Hand-in-Hand Mutual Fire Insurance Company Ltd remains responsible for the current performance bond, which is to be secured by counter guarantees in the form of: Escrow Account to the extent of US$500, 000; Debenture on the machinery/equipment for the difference.” Hand-in-Hand in an official announcement following the termination of the contract had stated that “The position of an insurance company with regard to any insurance policy or claim is strictly confidential and would not be disclosed by the insurance company unless required by law or legal process.” The insurance company had also stated that “If a claim is made under a performance bond, it goes through our claims verification and investigation process…This process is performed in respect of each and every claim regardless of size.” Large claims are submitted to the Board of Directors of Hand-in Hand for its consideration. “The Hand-in-Hand is very happy to settle any claim it is determined to be liable to pay.” The formal announcement that Hand-in-Hand was issuing the bond came during intense scrutiny of Synergy Holdings and Motilall’s ability to complete the road, just one month after inking the contract. It was at that time that Executive Director of NICIL, Winston Brassington, along with his Deputy, Marcia Nadir-Sharma, and Finance Minister Dr Ashni Singh, hosted a press briefing to quell the brouhaha that followed the announcement by Bharrat Jagdeo that Synergy Holdings Inc, headed by Motilall, had secured the contract. Brassington at that time told media operatives that there need not be any worries given that there were safeguard measures in place to ensure that Govt. receives what it is being tendered for, hence the mobilization and performance bonds. It took more than two years of intense media scrutiny and exposure coupled with the then imminent failure on the part of Motilall before the Government moved against him and terminated the contract.