Contracts to my relatives saved Guyana $millions

–    sacked GuyOil boss

Sacked Managing Director of the Guyana Oil Company (GuyOil), Badrie Persaud, says that the award of

Sacked GuyOil head, Badrie Persaud

contracts to his relatives ended up saving the entity millions.
The official, who was appointed in 2006, has released a statement following a damning forensic audit report on GuyOil that spoke of wrongdoing and unilateral decisions taken over time.

The audit report has been posted online – on the Ministry of Finance’s website. It speaks of Persaud overseeing contracts to his brother, nephew and even approving a gas station to his brother-in-law.

Persaud, in a released statement this week, gave an explanation about a contract to his nephew, Avinash Persaud.

According to former GuyOil boss, some years ago, through his initiative, about four acres of land were reclaimed from the river at the Providence terminal, East Bank Demerara. The final works of leveling the reclaimed land was left to be done. Managers were asked to seek quotations from contractors to execute the work.

“Because the contract was not a large one, contractors were not inclined to take it on. One contractor responded with a price of $4.5M. This was considered very unreasonable. At about the same time, Avinash (his nephew) was mobilizing his equipment in Georgetown to go to the Linden Highway and I told him about the work we had at the terminal.”
Persaud said his nephew was asked to make contact with the terminal manager, visit the site, and submit his price for the work.

“His price was $860,000. So management had two prices – $4.5M versus $860,000. The auditor was intent on focusing on the contractor being a relative of the Managing Director, rather than the cost saving of $3,640,000 to the company,” Persaud said in his statement.

He said that as a matter of fact, for the 10 years, he had been the Managing Director of GuyOil, the paramountcy of the interest of the company was always observed.

Another glaring case of conflict of interest that the auditors flagged was a transportation contract of $62M to a brother of the former head – Indarjeet Persaud.

The former GuyOil official explained that during the years of high oil prices on the world market, GuyOil was selling fuel at very thin margins and sometimes at a loss, all because the government policy was to keep the price at the pump below $1,000 per gallon.

“Given this scenario, management decided to review all the cost centres in the company’s operations and seek ways and means to reduce same. Operating the company’s Road Tank Wagons (RTW) stood out as a high cost centre.”

Persaud explained that the unit cost to the company to truck one litre of fuel from the Providence terminal to Georgetown was calculated. This was below $2.00/L. Most contractors offered a price of $2.00/L and above. The price offered by Indarjeet Persaud was $1.11/L, significantly below the company’s unit cost.

“Tenders for trucking fuel were again requested in September 2015 and Indarjeet Persaud’s bid was competitive.”

Persaud said that no explanation was sought by the auditor. The $62M was for fuel trucked over a 4-year period.

GuyOil is a state-owned company that was established to protect the fuel market.

Guyana does not produce oil and is heavily dependent on imports for its needs.

However, fuel acquisitions have been under the spotlight in recent times, with audit reports pointing to several corrupt practices.
Persaud was sacked by GuyOil’s board in February after they reviewed the audit report which accused the official of making unauthorized decisions. The board said it had no confidence in Persaud.

Questions were raised over several other contracts issued by Persaud as GuyOil’s head.