Guyana Gov’t sues financial institutions totaling over $186M

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Attorney General, Anil Nandlall.
Attorney General, Anil Nandlall.

[www.inewsguyana.com] – Attorney General Anil Nandlall has filed three actions on behalf of the State claiming a total of $186,132,052 against Citizens Bank Guyana, Caricom General Insurance Company and North American Fire and General Insurance Company, seeking to enforce Performance Bond Guarantees and Advanced Performance Guarantees put up by these companies in respect of different infrastructural contracts.

The Bonds and Guarantees were put up by these companies to assure and guarantee the performance of contractors under various contracts and the Government contends that these contractors have failed to discharge their contractual obligations.

In these cases, the Government is seeking to “cash in” these Bonds and Guarantees.

The actions were filed in the Commercial Division of the High Court and are set to be heard on 18th June, 2014.

On August 18, 2005 Citizens Bank Guyana executed a Performance Bond/Guarantee in favour of the Government of Guyana at the request of Golden Star Contracting Services Company Ltd. pursuant to a contract between the Government and the said company for the Rehabilitation of Access Road to Parika Stelling.

On January 11, 2008, the Government terminated the said contract owing to the Company’s repeated failures to correct defects within the time frame specified by the engineer. On April 23, 2008, the Ministry of Public Works and Communications in accordance with the terms and conditions of the contract wrote to Citizens Bank making a first demand on the Performance Bond in the amount of G$38,391,018 (thirty eight million, three hundred and ninety one thousand and eighteen dollars). Despite the aforesaid claim, Citizens Bank has to date failed, refused and neglected to effect payment of the said sum.

Meanwhile, on September 19, 2011, Caricom General Insurance Company Inc. executed Performance Bond and Advance Guarantee in favour of the Government of Guyana at the request of Maurice Balgobin pursuant to a contract between Maurice Balgobin and the Government for the Rehabilitation and Re-construction of Kaburi Village Road Region No. 7.

On September 24, 2012, the Government terminated the said contract owing to the fact that the Contractor failed to substantially complete the works even after an extension of 260 days was granted. On December 6, 2012, the Ministry of Public Works and Communications in accordance with the terms and conditions of the contract wrote to Caricom General Insurance making a first demand on the Performance Bond and Advance Guarantee in the amount of G$4,986,375 and G$1,892,009.

Despite the aforesaid claim, Caricom General Insurance Company Inc. has to date failed, refused and neglected to effect payment of the said sum.

Further, On May 7, 2012, North American Fire and General Insurance Company executed Performance Bonds in favour of the Government of Guyana at the request of Bovell Construction Services pursuant to a contract between Bovell Construction Services and the Government for the Amaila Falls Road and Transmission Line Clearing Project Section Six (6) Issano Junction to Kuribong River.

On December 27, 2012, the Government terminated the said contract owing to the fact that the Contractor removed equipment from the site which resulted in a stoppage of work constituting a fundamental breach of contract in accordance with the general conditions of the contracts.

On January 4, 2013, the Ministry of Public Works and Communications in accordance with the terms and conditions of the contract wrote to North America Fire and General Insurance Co. Ltd. making a first demand on the Performance Bonds in the amounts of G$56,345,060 and G$84,517,590. Again despite the aforesaid claim, North America Fire and General Insurance Co. Ltd. hasto date failed, refused and neglected to effect payment of the said sum.

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