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(SNO) — The Saint Lucia Labour Party (SLP) is calling on Prime Minister Allen Chastanet to seek parliamentary approval for a loan it has given to the construction company called Fresh Start or else it would go to court over the matter.
“I had hoped that you would have honoured the law and obtain parliamentary approval of this transaction. If you do not seek parliamentary approval of the loan by Fresh Start Construction Company within the next sixty days from the date of this letter, then I will have no choice but to seek a Declaration from the Court that this contract awarded to Fresh Start Construction Limited is unlawful in that it did not secure the approval of parliament as provided by Section 39 and 41 of the Finance Act,” wrote SLP and Opposition Leader Philip J. Pierre in a letter to the prime minister today.
The letter to the prime minister is all about the Direct Purchase Contract that was a awarded to the Fresh Start company in March of last year to rehabilitate six kilometres of road in the constituency of the prime minister, Micoud South.
According to Pierre the contract was awarded to Fresh Start without bidding, internally or otherwise, at a total cost of EC$15.9 million.
“I note that the contractor agreed to finance the full extent of the works at a total cost of $15.891 million dollars. For all practical purposes, you accepted the estimates prepared by the contractor. This, in itself, is most abnormal and unusual,” Pierre wrote in his letter to Chastanet.
According to Pierre in his letter, the contractor (Fresh Start) described the loan as a ‘Design/Build/Finance-Road Rehabilitation Loan’. He said the financing proposal notes that the contractor finances the full extent of the works and that the repayment term is four years at an interest rate of 6.5 percent per annum for the entire duration of the facility.
He also said that this new provision says that the contractor may consider transferring their rights and obligations under the loan to a new financier.
Pierre said the provision was somewhat surprising and a new financing policy of the government as it appears that the government actively supports the sale of payables due to third parties.