Government is not considering the halting of BK International Inc's contracts as a penalty for its culpability in the breach of the East Demerara Water Conservancy (EDWC) dam.

This is because the breach is being treated as a separate issue, according to Head of the Presidential Secretariat (HPS), Dr Roger Luncheon. Speaking on Tuesday at his weekly press briefing, Luncheon went on to say that the blacklisting of the company would negate the studied legal opinion now underway to impose penalties for the breach.

Noting that the matter of the stopping of contracts was raised at a number of fora, Luncheon said: "I believe..., that the contract or contracts being executed by the contracting firm occur in areas, and represent obligations, that are not influenced by this process."

BK was the contractor for the EDWC dam when the breach occurred in November last year, causing millions of dollars in damage to homes and the livelihood of residents of Cane Grove, East Coast Demerara.

Luncheon said government's position was that there should be interventions whenever weaknesses and deficiencies were exposed. "But the rather general imposition of penalties like blacklisting are uncalled for and could probably be legally challenged," he said.

A team headed by Dr Harold Davis Jr of the Guyana Sugar Corporation, conducted the investigation into the breach.

The team's report was submitted to Cabinet, which, after reviewing it, found BK and executing agency the National Drainage and Irrigation Board (NDIB) culpable for the breach.

The Attorney General's Chambers has been delegated by Cabinet to formulate a legal opinion on the penalties and remedial action to be taken.

Managing director of BK, Brian Tiwarie, told Stabroek News yesterday that no official request was made by government for a response to the report, but the company would issue one next week. He said his company managed to obtain a complete copy of the report from the NDIB and was studying it.

The HPS said the imposition of penalties on the contractor was being done in the context of the contractual undertaking in relation to current practices in the industry. "The Attorney General is providing legal advice to conclude and to give effect to Cabinet's decision," he stated.

He said the contract was being examined by the Attorney General's Chambers to ensure that the penalties accorded with the provisions of the contract.

"The contract has to be examined to ensure that what is being imposed and recovered is indeed part and parcel of the contractual obligations between the contractor and the client," he said.

Luncheon described Cabinet's acceptance of the findings that a government agency was negligent in its functions as "momentous." He added that Cabinet has noted the move by engineers and related specialists to examine the issue further and remarked that it was an apt reflection of a defining moment for the industry.