The addenda following the expiration of the contract were signed on June 6, August 9, August 29, and October 17, 2011; addenda that were signed, moreover, despite the fact that Sargeant Petroleum was not listed in the Purchases and Contracts records as a supplier of the State, for which reason, the document states, "it cannot (at the time) contract with the Dominican State.".
Taken from Diario Libre
SANTO DOMINGO.-The Ministry of Public Works and Communications (MOPC) considered the contracts for the supply of AC-30 asphalt cement signed by the Government of Danilo Medina to have expired as of November 30, 2020.
Specifically, the Ministry of Public Works and Communications (MOPC) terminated the contract signed by former Minister of Public Works, Gonzalo Castillo, and Sargeant Petroleum in 2017 for the delivery of AC-30 tanks. Eighteen months later, Sargeant Petroleum, LLC, the company affected by this decision, requested arbitration proceedings against the Dominican Republic from the World Bank's International Centre for Settlement of Investment Disputes (ICSID) for the termination of the agreement.
The arbitration process has progressed. On October 28, ICSID formed the arbitration tribunal, which will be composed of Gabrielle Kaufmann-Kohler of Switzerland as president, and arbitrators David R. Haigh, a Canadian appointed by the claimant, and Alexis Mourre of France, appointed by the respondent.
In announcing the termination of its contract with Sargeant Petroleum, the Ministry of Public Works issued a statement indicating that “for more than 20 years, price distortions have occurred in the bidding processes for public road works, stemming from opaque contracts awarded by the Ministry for the acquisition of hot mix asphalt and its main raw material, AC-30.” During that period, Sargeant Petroleum was the primary supplier of this material to the Dominican government.
Old relationship
Since 2003, during the governments of Hipólito Mejía, Leonel Fernández and Danilo Medina, Sargeant Petroleum had a very close relationship with Public Works and Communications.
According to international reports, Sargeant Petroleum is a company owned by Jordanian Mustafa Abu Nabaa and American Harry Sargeant III.
The first contract was signed by former Secretary Miguel Vargas Maldonado, an agreement that, in addition to providing the gallon of AC-30 at a cost of 0.3618 cents of a dollar, included another part for 0.38 cents of a dollar per gallon for storage.
Sargeant Petroleum and the Ministry of Public Works then signed an eight-year agreement. This was a direct contract signed before the current Procurement and Contracting Law was enacted. However, the contract was extended for three more years after the law's approval, thanks to addenda that blatantly violated it, as the Ministry of Public Works and Contracting determined in resolution 23-2013.
“While it is true that all addenda made prior to the termination of the aforementioned contract, that is, February 26, 2011, are protected by the legislation in force at the time of the signing of the original contract, it is no less true that after the arrival of the aforementioned contract, the Ministry of Public Works and Communications had to abide by the provisions of Law No. 340-06 with its modifications contained in the current law.”.
The addenda following the expiration of the contract were signed on June 6, August 9, August 29, and October 17, 2011; addenda that were signed, moreover, despite the fact that Sargeant Petroleum was not listed in the Purchases and Contracts records as a supplier of the State, for which reason, the document states, "it cannot (at the time) contract with the Dominican State.".
For this reason, the Procurement and Contracting department considered that the addenda submitted to the agreement after the expiration of the original contract did not comply with the provisions of the law on Public Procurement and Contracting.
Diario Libre states that it did not receive a response from the MOPC for this article, nor was it possible to contact businessman Abu Nabaa.
The agreement with Gonzalo Castillo
In 2017, Sargeant Petroleum and the Ministry of Public Works agreed to a monthly consumption of 1.26 million gallons. The Ministry's agreement included a sort of "shadow agreement," stipulating that if the delivered material fell below the annual amount of 15.12 million gallons, the government would pay the difference.
