That CJIA expansion project

Nov 24, 2011 Letters

Dear Editor,
The recent disclosure by the Jamaican Observer newspaper regarding the proposed new airport terminal construction and runway extension at the Cheddi Jagan International Airport (CJIA), to be undertaken by the China Harbour Engineering Company and financed by the Exim Bank, has elicited strong reactions.
From the Guyana government- undisguised displeasure at the Jamaican disclosure, and among Guyanese at home and abroad, a mixture of disgust and anger that the government of the day could conclude a deal in such secrecy and without parliamentary scrutiny, and that this government despite its own vehement declarations in the past that the government/cabinet does not approve contracts, had in fact done so, and that, without subjecting this deal to the tender process.
Guyanese need to know that the China Communications Construction Company, the parent company of China Harbour Engineering Company, has had a checkered history, particularly in its dealings with projects in developing countries as these two examples illustrate.
On January 12, 2009, the China Road and Bridge Company, a subsidiary of the China Communications Construction Company was debarred by the World Bank for a period of eight years, from participating in any project financed by the that institution.
This unprecedented action was taken, based on the World Bank’s Integrity Vice Presidency investigation of the Philippines National Roads Improvement and Management Project, Phase I case.
The World Bank Sanctions Board, made up of senior bank officials and external legal experts, decided that the entities had participated in a collusive scheme designed to establish bid prices at artificial non-competitive levels and to deprive the borrowers of the benefits of free and open competition.
This constitutes fraudulent practices under rules applying to the Philippines National Roads Improvement and Management Project, Phase I.
As a consequence of the foregoing, the World Bank recently clarified its sanctions regime to ensure that successor organizations-through purchase or reorganization-will be subjected to the same sanctions applied to the original firm.
The World Bank sanctions regime applies to both parent and subsidiary companies.
During 2010, the Uganda National Road Authority invited tenders for the design and construction of the Mbarana-Khagati-Murongo Road, and tenders were received from the China Road and Bridge Company, another subsidiary of the China Communications Construction Company, and Hawk International Financial and Construction Co. Ltd., with the China Road and Bridge Company being awarded the contract by the Ugandan National Roads Authority.
Hawk International Financial and Construction Co. Ltd., appealed the award of this contract, and the Ugandan Public Procurement and Disposal of Assets Authority which entertained this appeal found sufficient grounds to reverse the decision by the Uganda National Road Authority and awarded said contract to Hawk International.
It is of interest to note that Hawk International’s bid was 86.8 billion Uganda shillings, while China Road and Bridge Company’s bid was 134.6 billion Uganda shillings, a difference of some 47.9 billion Uganda shillings.
Mr Edger Agaba, head of the Ugandan Public Procurement and Disposal of Assets Authority, “discovered inconsistencies in the technical evaluation process” and was “concerned about price differences between China Communications and Construction Company and Hawk International Financial and Construction Co. Ltd.,” and in addition, stated that his “review was ordered with a view to ensuring value for money in the procuring process”.
Regarding these and similar practices, James Adams, World Bank Vice President for East Asia stated, “Misuse of public money is a problem for everyone. It deprives the poorest people of the development funds that are so vitally needed, and it undermines public confidence in public and private institutions”.
Perceptive Guyanese presented with the fait accompli of the Cheddi Jagan International Airport project and the apparent lack of due diligence by the relevant authorities, are not surprised because what they see here conforms to the pattern of loose and irresponsible dealings that have characterized the tenure of this administration.
F. A. Stephenson

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