Dr Warren Smith, President of the Caribbean Development Bank (CDB)
Front Page
August 16, 2019
Nothing fraudulent in award of river defence contract – CDB

by Lyf Compton

President of the Caribbean Development Bank (CDB) Dr Warren Smith has reiterated that there are no findings that point to fraud or corruption in the issuance of the Yarabaqua River Defence Project contract.

In an August 14, 2019 release, the CDB stated that a team from the Bank met recently with Minister of Finance Camillo Gonsalves and other representatives of the Government at which time President Smith highlighted the strong partnership between St Vincent and the Grenadines (SVG) and the Bank.

The release said the Bank is determined to continue working collaboratively with the Government to realize its desire for a better future for its people.

“The President acknowledged the ongoing public discussion on the Yarabaqua River Defense Project in Saint Vincent and the Grenadines and the Bank’s recent decision to declare a mis procurement on this Project.

“He stressed the importance of clarity with respect to CDB’s procurement practices, particularly as recipients of CDB-financed projects are responsible for undertaking procurement in accordance with prevailing CDB procurement policies and procedures. For capital projects, recipients typically hire experienced independent consultants to prepare the technical designs and to evaluate, and advise on, the procurement and supervision of contractors,” the release said.

In a letter dated June 27, 2019, Alistair Campbell, this country’s acting chief engineer, informed Reliable Construction Services Ltd, the company that had been awarded the contract for the Yarabaqua River Defence Project, that the CDB had pulled its funding of the project.

According to the letter, this was as a result of a complaint received from an unsuccessful bidder — Cameron

“Dinky” Balcombe, the managing director of Bally and Bally Investment Ltd.

It was noted in the release that CDB is not a party to the contracts awarded under a project but plays a supervisory role, checking that the procurement process undertaken conforms to its guidelines.

“The Bank does not participate in the evaluation of bids or proposals. However, for major contracts, the Bank will provide a “no-objection” to key procurement documents, such as evaluation reports, before the process continues to the next stage,” said the release.

Against this background, President Smith said that mis procurement may result when a contract is not procured in full compliance with CDB’s policies and procedures. He stated that even if a contract is awarded after obtaining a “no objection” from CDB, as was done in this case, the Bank may still declare mis procurement in certain limited circumstances, including where it subsequently receives key information in relation to the process.

The President confirmed that the Bank had originally granted a “no objection” to the award of a contract under the Project, based on the bid evaluation report prepared by the independent consultants. Mis procurement was subsequently declared by the Bank as the procurement process was determined, on review, to be not in accordance with the Bank’s procurement guidelines.

“The President reiterated his previous assertion that there had been no finding by the Bank of fraud or corruption in declaring the mis-procurement,” said the CDB in the press release, while Smith also drew attention to SVG’s Public Procurement Act, passed in December 2018 as part of an ongoing procurement reform programme for member countries of the Organization of Eastern Caribbean States (OECS).

It was stressed that with the passage of this Act, SVG has one of the most robust legislative frameworks in the Caribbean.

On Wednesday, Minister of Transport and Works Julian Francis told SEARCHLIGHT that discussions on the Yarabaqua issue are still ongoing, while noting that some of the recent meetings with the CDB had been arranged a long time ago and had nothing to do with the recent mis-procurement.

In a statement dated July 22, 2019, written by the Director General of Finance and Planning and the Chairman of the Tenders Board Edmond Jackson, “the decision by the Tenders’ Board to award the contract relied upon the Bid Evaluation Report prepared by IBI Group (the consultant) and the letter of ‘no objection’ issued by the CDB”.

However, it was recently revealed that the CDB official who was responsible for the letter of ‘No Objection’ no longer works at the CDB. It is not clear why the official is no longer employed there.

Last month, Prime Minister Dr Ralph Gonsalves said the Yarabaqua river defence and river training work still needs to be done urgently and that project will stay with Reliable Construction despite the mis-procurement. The project is now being funded by the Government.

Meanwhile Balcombe says he will contest several other projects awarded by the Tenders Board.