RIVIÈRE DU REMPART MARKET PROJECT – CONTRACT AWARD (4.17 p.m.)

Yes, hon. Minister! Not too long if you can.

It is very comprehensive, Madam Speaker.

Do your best!

Madam Speaker, with your permission, I wish to make a Statement with respect to the Rivière du Rempart Market project. The House will recall that on 24 March 2026, I had provided a comprehensive reply to Parliamentary Question B/136 from the hon. Dr. Prayag on the same subject matter. Madam Speaker, the Rivière du Rempart Market project was awarded to Alphamix Limited in February 2003, at the cost of Rs51,049,711 inclusive of VAT for its implementation in three phases as follows – • Phase one, construction of market at ground floor at the cost of Rs21,665,046; • Phase two, extension works at ground floor at the cost of Rs7,813,046, and • Phase three, construction of first floor at the cost of Rs21,571,182. Following recommendation to award the contract by the then Central Tender Board. As at 27 September 2006, the Council has disbursed Rs36,997,116 to the contractor while retaining Rs14,052,595 in respect of unresolved contractual issues, including outstanding defects, uncertified extensions of time, disputed claims and liquidated damages. In 2008, the contractor instituted proceedings before the Supreme Court, claiming Rs183,848,589 on the ground that payments due under the contract had not been fully settled. The matter was subsequently referred to arbitration. On 13 May 2009, the Supreme Court, in consultation with both parties, appointed an arbitrator, namely Me D. H. Vellien to adjudicate and resolve the dispute. The latter made the following awards, which were eventually paid by the Council – (i) on 26 January 2012, an amount of Rs2,026,065, representing retention money due, less 10% for snag list. (ii) on 07 June 2012, an amount of Rs303,909, representing 15% VAT on the retention sum of Rs2,026,065, and (iii) on 19 July 2013, an amount of Rs8,022,380 plus interest accrued as from year 2005. Madam Speaker, on 10 February 2014, following an anonymous letter addressed to the then Independent Commission Against Corruption pertaining to allegation against both the Arbitrator and the Council of Alphamix Ltd, the Arbitrator withdrew himself from the arbitration. Subsequently, on 18 March 2015, the Supreme Court appointed Justice Marie Benjamin Joseph as Arbitrator. The latter made the following awards, which were paid by the Council – (i) on 29 August 2015, an amount of Rs3,536,250, representing the refund of the adjudicated and ascertained damage inclusive of VAT, and (ii) on 30 July 2016, an amount of Rs11,181,928, representing compound interest at the rate of 15.33% accrued on the sum of Rs3,536,250 due from 22 September 2005 to 04 September 2015. On 23 September 2016, the Arbitrator granted an interim award of Rs72,921,570 plus VAT for full and final settlement of the capital claim. On 05 May 2018, an amount of Rs83,859,805 was released by the then Ministry of Finance, Economic Planning and Development, and the only live issue was the payment of interest. Madam Speaker, on 31 December 2018, the Arbitrator made an award for the payment of the amount of Rs438,634, representing interest at the rate of 15.33% per annum, compounded daily on the capital amount of Rs72,921,570 over the period of 10 October 2005 to 03 May 2018, amounting to Rs427,444,630, and simple interest accruing on the amount of Rs427,324,630 at the legal rate of 3.5% per annum over the period starting from 04 May 2018 until the date of payment. In January 2019, the District Council of Rivière du Rempart made an appeal against the award of the Arbitrator. However, in January 2022, the Supreme Court declared the award of 31 December 2018 null and void, as the award made by the Arbitrator in the arbitration proceeding involving the applicant and the respondent contravenes Article 1026, subsection 5 of the Code de Procédure Civile, which stipulates that an arbitration award must contain specific details such as the names of the arbitrators and the exact date of the award. Failure to meet these mandatory specifications renders the award null and void. The Supreme Court further stated that the Section 1027 (3) part 3 of the Code de Procédure Civile, which makes provision for the circumstances where the award is not within the mandate conferred upon the Arbitrator by the parties, has not been respected. Madam Speaker, consequently, the contractor successfully appealed before the Judicial Committee of the Privy Council. On 05 June 2023, the Privy Council held that the arbitral award remained valid and enforceable. Following legal advice from the Attorney General's Office and the legal advisors of the District Council, the then Ministry of Finance, Economic Planning and Development provided the necessary funding to enable payment of the judgment debt. Subsequently, the total amount of Rs580,384,862 was ultimately paid to the contractor, including Rs30,208,515 in terms of legal fees. Madam Speaker, I wish to inform the House that this matter attracted adverse report in its report for the financial year 2022-2023. In view of the gravity of this matter, and in keeping with this Government's unwavering commitment to transparency and accountability, my Ministry has decided to set up a fact-finding committee with the following terms of reference – (i) establish the circumstances that led to this extraordinary financial liability; (ii) identify any administrative, contractual or procedural shortcomings; (iii) responsibility wherever appropriate, and (iv) make recommendation to strengthen governance in the implementation and management of public contracts, (v) the fact-finding committee be chaired by a retired judge and comprise representatives from the Ministry of National Infrastructure, a former Chief Executive and an independent engineer. Madam Speaker, this Government owes it to the Mauritian people to establish the full facts. Every rupee of public money must be accounted for and every lesson must be learned to ensure that such a costly episode is never repeated. Thank you, Madam Speaker.

Thank you.