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| Government Reveals No Misappropriation of Funds in Ile Perseverance Housing Project |
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In response to an official request from the members of the National Assembly to the Minister of Finance during budget time in December 2008, regarding the missing USD 4.5 million on the Ile Perseverance Housing Project, the Ministry of Finance has conducted further investigations which reveal that the true loss to government was US 2.4 million.
According to the report the loss resulted from a breach of contract on the part of a company the government had contracted for the housing project on Ile Perseverance. The company, called Cellate Marble LLC & Precast Technology, received advance payment from the Government but did not start construction for the project. The report states that the payments the government made were in line with the contract and international standards. Cellate had won the tender for the project in May 2004 and customary visits were made prior to that by high-level officials, where Cellate gave necessary information to the government about their work. According to the investigation the government conducted sufficient due diligence before entering into contract with Cellate but Cellate misrepresented themselves by not revealing pertinent information. Whilst the government was abiding to the conditions of the contract, Cellate did not and no construction work was undertaken, apart from a plant factory, in spite of receiving advanced payments as per the contract. In following normal procedures, the government acted on the advice of the Attorney General to terminate the contract and seize the plant factory installation and some equipment brought into the country by Cellate. These were sold for a total of USD1.1million which off-set part of the payment the government had made to Cellate. Furthermore, Barclays Bank had guaranteed Cellate to the extent of USD 1.5 million and the company had also misrepresented itself to the bank. The government called on this guarantee but after discussions with Barclays opted for a low interest loan in order to help complete the housing project. The total net loss to the government was USD 2.4 million but because of the indirect benefit of the guarantee from Barclays: the low interest loan, this amount was effectively reduced. There have been two other reports regarding this matter, one written by MLUH and one written by the internal audit team within the Ministry of Finance. Both of these previous reports do not suggest any misappropriation of funds on the part of the government. The government has pursued all legal remedies in order to address this mass loss, which also includes the cost incurred for the food and air fare of the workers that were brought into the country by Cellate but were neglected by the company. The Minister of Finance has submitted a report to the Leader of Government Business and the Leader of the Opposition in the National Assembly. The Chairman of the Finance and Public Accounts Committee, Hon Terrence Mondon has also received a copy of the report. |
