Dr. Warren Smith

No evidence of fraud or corruption in declaring misprocurement

The Caribbean Development Bank (CDB) has declared that it had found no evidence of “bank of fraud or corruption in declaring the misprocurement” in the Yarabaqua River Defence Project in St. Vincent and the Grenadines.

The bank revealed this during a meeting held here earlier this week with Minister of Finance Camillo Gonsalves.

The bank, in a statement, said it declared misprocurement “as the procurement process was determined, on review, to be not in accordance with the bank’s procurement guidelines”.

President of the Barbados-based bank, W. Warren Smith, and a team from the bank, met in Kingstown recently with the Gonsalves, and other representatives of the Government.

A CDB press statement said Smith highlighted the strong partnership with St Vincent and the Grenadines since the bank commenced its operations almost 50 years ago.

He reiterated the bank’s determination to continue working collaboratively with the government to realise its desire for a better future for its people.

“The president acknowledged the ongoing public discussion on the Yarabaqua River Defence Project and the bank’s recent decision to declare misprocurement on this project,” the statement said.

Smith 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 statement said.

Smith noted that CDB is not a party to the contracts awarded under a project.

“It 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,” the statement said.

Against this background, Smith observed that misprocurement 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, the bank may still declare misprocurement in certain limited circumstances, including where it subsequently receives key information in relation to the process.

The CDB head 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.

IBI Group, the Canadian consulting firm that evaluated the bids has declined to comment on the CDB’s declaration of misprocurement.

Smith drew attention to the island’s new Public Procurement Act, which was passed in December 2018 as part of an ongoing procurement reform programme for member countries of the Organisation of Eastern Caribbean States.

He noted that with the passage of this act, St. Vincent and the Grenadines has one of the most robust legislative frameworks in the Caribbean.

The process through which the Government awards contracts has come under scrutiny after the CDB withdrew funding for the project following an objection from a contractor.

The CDB, after an investigation following a complaint by Bally and Bally Investments Ltd., one of the tenderers, cancelled financing for the “Yarabaqua River Defence” project and ordered that Kingstown repay any money already withdrawn for the project.

The decision by the CDB to withdraw financing for the “Natural Disaster Management – Rehabilitation and Reconstruction (December 2013 Trough Event) related-project, came after an investigation triggered by a September 14, 2018 letter of objection to the Chief Engineer.

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