More $$$ woes for EFCL as court orders: Pay $17m to Emile Elias' NHIC

ALREADY saddled with a mounting debt burden, the Education Facilities Company Ltd (EFCL) has had $17 million added to its balance sheet as owing to a local contractor.

On Monday, Justice Frank Seepersad signed off on an order compelling EFCL to pay NH International $14,074,648.43 plus interest of $3,898,908.45 as outstanding payment for work done on the Parvati Girls’ Hindu College in 2013.

NH International (Caribbean) Ltd (NHIC) filed a claim in the High Court in 2021 against EFCL after the state-owned special purpose company failed to pay the outstanding money. EFCL did not defend the claim and it was not represented by an attorney in court on Monday. As a result, judgment was granted in default.

In its claim, NH International said it entered into a contract with EFCL in 2013 to construct the high school at a cost of $127.5 million.

The contractor began work and interim payments were made until May 2018, when the parties agreed to terminate the contract.

The claim said the termination agreement expressly implied that EFCL would pay NHIC, immediately on release of the funds by the Education Ministry, the sum of $6.8 million, VAT inclusive, and $5.5 million held in retention, plus VAT of $693,467.12 on that amount.

It was also agreed that the parties would seek to reach an agreement on the further sums owed to NHIC no later than September 30, 2018, and if the debt, or any of the agreed sums, were not paid, then finance charges would accrue until payment.

NHIC said in May 2018, the parties agreed t $9.6 million and a payment certificate was prepared, leaving a remaining $578,951.90.

A tax invoice was presented to EFCL and in October that year, it presented a draft of the final debt showing claims for suspension costs and materials on site.

The final amount showed $4,046,997.07 still owing to NHIC. The claim said NHIC agreed to the figure and by January 2020, EFCL supplied it with an updated statement showing the principal sums owed for several projects, including those relating to the Princes Town high school, admitting to an aggregate of $14 million due on the project.

The lawsuit said NHIC confirmed the figure, but, in breach of the termination agreement, EFCL has failed to pay.

It said in August 2021, NHIC wrote to EFCL demanding payment and on two occasions the special-purpose company asked for an extension.

Since then, NHIC said there had been no substantive response from EFCL before its claim was filed, which was signed off by its executive chairman, Emile Elias.

In addition to the sums agreed to by the court, EFCL will also have to pay additional interest from Monday’s date until it satisfies the judgment debt.

In 2020, the Parvati Girls’ Hindu College was said to have been 80-90 per cent completed in 2015. However, it remains incomplete.

NHIC was represented in court by attorneys Joan Byrne and Jason Mootoo.

In November 2021, Newsday was told the company's future was being carefully considered, given the challenges it has been facing to pay its debts to contractors and pay staff salaries. At the time, Newsday was told one option was possibly settling outstanding debts, after which the company could be wound up.

The EFCL was established as a special-purpose state enterprise on March 11, 2005, under the Patrick Manning administration. Its functions involved repairing and maintaining early childhood education centres and primary and secondary schools.

Since its establishment in 2005, a total of 133 new school facilities were constructed and outfitted. These included 85 ECCE centres, 40 primary and eight secondary schools. Over the same period, EFCL had done over 8,000 repairs and maintenance jobs.

At a news conference at the ministry in Port of Spain in July 2018, then education minister Anthony Garcia said a number of EFCL contractors were still waiting to be paid.

"We have inherited this situation,” he said, “because when we came into office in September 2015, we inherited a situation where a large number of our contractors were not paid and a large number of our schools were left unfinished. This is what compounded the situation.

"We are trying our best to ensure that our contractors are paid and we meet our commitments."

In May 2019, the Government said it had to settle nearly $2 billion in debt, legal costs and claims by contractors against the EFCL.

Responding to a question in the Senate in July 2021 on behalf of Education Minister Dr Nyan Gadsby-Dolly, Leader of Government Business Clarence Rambharat said, "The EFCL is managing a massive debt burden.

“The situation was brought on by an overly ambitious and unsustainable school construction programme embarked on (in) the year(s) 2010-2015, with several large contracts awarded in the last two years of the former administration's (the UNC-led PP coalition) tenure.”

Rambharat said the Education Ministry took practical steps to ensure the continuance of its programmes for reconstructing and repairing the schools' infrastructure, "by transferring the agency for essential product project-management services from the EFCL to the National Maintenance Training and Security Company Ltd (MTS).”

He added that MTS had been doing required project-management services on behalf of the ministry, and maintenance and repairs to ECCEs, primary and secondary schools were continuing.