Haags Bosch dumpsite controversy…BK gets $1B settlement with new Govt
Months after the High Court reversed a decision to terminate the contract of BK International Inc. to
BK’s owner,
Brian Tiwarie
manage the Haags Bosch dumpsite, Government has agreed to pay the company a $1B (US$5M) in settlement.
The deal was hammered out over a month ago by the Ministry of Legal Affairs/Attorney General Chambers.
There has been no official announcement by the government and monies have not been paid over as yet, officials familiar with the deal said this week. There were also not immediately any details how the $1B figure was arrived at.
Government is currently assessing tenders for a new company to manage the facility, the country’s biggest dumpsite. A project to convert solid waste at the Haags Bosch dumpsite into electricity is also in the making.
The facility was opened in early 2011, replacing the dumpsite in Le Repentir Cemetery in the city which had to be closed because of health and capacity reasons.
BK, owned by businessman Brian Tiwarie, had been battling with both the previous and current governments over the management of the Haags Bosch facility, an area of 100 acres that is located behind Eccles, East Bank Demerara. Under the arrangements, BK was supposed to be paid for every tonne of waste he processed.
The matter came to a head last year when the administration of the People’s Progressive Party/Civic on February 27h terminated BK’s contract for the construction and operations of the landfill. They said that the company missed deadlines and committed other breaches.
On March 13, 2015, BK through his lawyer, Davindra Kissoon, filed a lawsuit asking Chief Justice (ag) Ian
BK’s lawyer,
Davindra Kissoon
Chang, to overturn the decision of the Ministry of Local Government and Regional Development to terminate the contract.
Tiwarie, in court documents, claimed that he was owed hundreds of millions of dollars for the construction and for the daily management of the Eccles site. The management period ends in 2019.
The lawsuit named the former Permanent Secretary, Collin Croal, former Minister Norman Whittaker and the Ministry of Local Government and Regional Development. Under the new administration that ministry has been renamed the Ministry of Communities.
In his claims to the court to overturn the termination, Tiwarie said that the decision was arbitrary and illegal and breached his expectation as contained in contract.
He asked for other reliefs and court costs.
He had accused Croal and Whittaker of causing delays and changing designs for the landfill.
The contractor also blamed the ministry for handing his company designs that were poor. He was forced to process double the waste by the ministry, contrary to his contract.
The company insisted that it complied for five years and invested millions of dollars of its own monies, expecting to reap the benefits at the end of the contract period in 2019.
Tiwarie also made it clear that over the 20 years he has been in business, he had built up a reputation to a point where he is a preferred contractor for Government and never had one terminated.
The company explained that in 2007, the then PPP/C Government decided that it had to find an alternative site to Le Repentir, which was becoming problematic.
Around 2007, the Inter-American Development Bank (IDB) loaned Guyana US$18.07M for the Haags
Former Local Govt. Minister, Norman Whittaker
Bosch project with BK and Puran Bros winning the tender in 2009.
While it was agreed that the construction would be for US$9.7M, this was reduced to US$7.7M because of cash problems facing the Ministry.
Tiwarie said that the agreement with his company was with the Ministry, and not IDB.
Construction began in 2010 at the site which was officially opened on February 1, 2011.
Tiwarie said that in 2012, the supervision of the landfill operations was placed under the Ministry of Public Works with the engineer Walter Willis as Project Manager.
However, BK and Willis clashed and Willis was removed from the project shortly after.
Tiwarie in his court documents said that his company construction cells, roadways, administrative offices, canteen and workshop, and a scale. In the process he hired 50 persons and managed to process 140,000 tonnes of waste annually.
However, the Ministry started delaying payments to BK despite invoices being submitted and letters of demand being written.
As at July 23, 2013, the ministry owed BK some US$324,677…the monies being for work done since 2012. This meant there were no payments for one and half years.
Aside from this, BK had filed claims against the ministry for breaches in the contract for US$8M. The company settled for US$1.7M.
The Haags Bosch dumpsite.
BK said that it did not even pay its Performance Security to the insurance company for the contract because of the delays by the ministry.
Chief Justice (ag) Ian Chang, in his 80-page decision late November in favour of BK, found that the company had a contract and there was an option that could be explored –that of judicial review given the fact the state entered its contract with BK “in the exercise of the State’s common law power to contract”; that “the general public had a direct interest in the project” given “the level of public expenditure…the importance of the project to public health and welfare.”
BK International was represented by Attorney–at–Law Davindra Kissoon of the London House Chambers. The Attorney General’s Chambers had appeared for the Minister and Permanent Secretary.
