Private citizen threatens legal action against Govt over controversial drugs bond deal


Government has been given seven days to terminate the controversial drug bond contract or face being dragged before the courts.

A letter, in the name of a private citizen, was dispatched to the Public Health Ministry’s Permanent Secretary on Tuesday that threatened legal action against the Government if it failed to rescind the tenancy agreement with Linden Holdings Inc – the company which owns the house on Sussex Street that has been rented by the State for G$12.5 million monthly for storage of medical supplies.

The Sussex Street "House" bond
The Sussex Street “House” bond

Majeed Hussain of Diamond, East Bank Demerara, registered his concerns about the shady deal in the correspondence, where he laid out his case for demanding that the agreement be quashed.

Chronicling the series of events that unfolded in this scandal, the taxpayer outlined several reasons why the legality of the contract could be challenged.

He posited that the monthly rental agreed upon was “unreasonable, irrational, excessive, arbitrary, capricious, constitutes a fraud upon public funds, is unlawful, null and void and of no effect”.

Hussain also contended that the premises was “absolutely unfit and unsuitable for the purpose of storing drugs and pharmaceuticals for the public health system of Guyana, and, therefore, the decision to rent the said demised premises for that purpose is unreasonable, irrational, whimsical, arbitrary, capricious, constitutes a fraud upon public funds, is unlawful, null and void and of no effect”.

He added that the procurement of the premises was done “in absolute disregard and in violation of the Procurement Act, Chapter 73:05, and, therefore, the said rental agreement is ultra vires, unreasonable, irrational, whimsical, arbitrary, capricious, constitutes a fraud upon public funds, is unlawful, null and void and of no effect.”

Against this backdrop, the taxpayer called on the Government to immediately terminate the contract.

“If you fail to do so, I have firm instructions to institute legal proceedings challenging the legality of the said agreement without further notice,” Hussain warned in the correspondence.

Public Health Minister George Norton
Public Health Minister George Norton

Hussain is being guided by Mohabir A Nandlall & Associates, operated by former Attorney General and Legal Affairs Minister Anil Nandlall, who himself has since labelled the issue as one of the major acts of corruption by the Government thus far.

Public Health Minister, Dr George Norton, notwithstanding the public flak, his public apology and the numerous questions surrounding the entire affair, maintained that there was no need for the contract to be retendered.

Dr Norton conceded that he was not comfortable with the way the entire affair played out, hence his apology but glowingly stated: “I am comfortable with the bond… I think it has what it takes to store the medication in a proper way.”

According to the lease agreement, in addition to the G$12.5 million monthly rent for usage of the building, Government will pay the required Value Added Tax (VAT) to the Guyana Revenue Authority (GRA). Inclusive of VAT, the rent would total G$14.5 million instead of the G$12.5 million that Government was touting.

The contract stipulates also that Government would be responsible for paying utility bills to the Guyana Power and Light (GPL) and Guyana Water Inc (GWI).

The Government also agreed to stand the expenses to maintain the building, including cleaning, regular and emergency repairs, the servicing of the air conditioning units, etc.

The contract stipulates that if the Government fails to execute the functions within a stipulated timeframe, the landlord will take up the responsibility and all costs incurred will be recoverable from the Government as if it were rent in arrears.

Furthermore, while Government was adamant that the building was certified by the Pan American Health Organisation/World Health Organisation (PAHO/WHO) for the storage of pharmaceutical supplies, the contract did not confirm this assertion.

And while Government continues to defend this decision, critics continue to question why the Administration would opt to exhaust such exorbitant amounts on a house under renovation for the storage of medical supplies when better options are available.

Former President and Opposition Leader Bharrat Jagdeo had pointed out that no competent Cabinet would approve a contract of G$12.5 million VAT exclusive (G$14.5 million) for a 6000-square-foot residential building versus G$237 per sq foot (VAT inclusive) for a 70,000-square-foot modern internationally certified pharmaceutical bond.

Additionally, others pointed out that Government owned a drug bond in Diamond, East Coast Demerara which has more than enough space to store the country’s pharmaceutical supplies.




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