Chinese offers no guarantee for US$47M Antigua power plant

Jul 10, 2012 News

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…Guyana cited as example of Chinese contract arrangements

As the debates continue to rage in Antigua and Barbuda over its troubled Chinese-built US$47M Wadadli Power Plant, there have been questions about the agreement made by that government and the contractor, Beijing Construction (BCEG).
Comparisons are also being drawn about similar situations that exist over the under-fire US$200M Skeldon in Guyana and other infrastructure including Chinese constructed projects in Jamaica.

According to a report in the recent Caribarena Antigua News website, it is clear that critical documents that would clear the air over the power plant deal with the Chinese are not being released by the Antigua Government.
“Releasing these reports would be a step in the right direction towards transparency. So why does the Government refuse to release any documents? Why are these documents being kept under wraps? What do these, amongst other, documents contain that is so damning that the United Progressive Party (UPP) administration will keep them hidden even under great pressure from the public?” a report in the Caribarena asked on June 14.
The scandal over the Chinese-built power plant had almost caused a no-confidence vote against the Prime Minister, Baldwin Spencer, weeks ago but the parliamentary motion fizzled.
The pressure mounted on the Spencer administration earlier this year after the power plant suffered severe problems with its engines raising questions whether they were new as had been the agreement. There have been protests in Antigua as well.
Antiguan Government did release some documents but the media are reporting problems with them.
One such document is the Operation and Maintenance Agreement, signed by Clarvis Joseph, Chairman of the Board of Commissioners of the Antigua Public Utilities Authority (APUA); Ambassador David Shoul; representative for Beijing Construction (BCEG) Zhao Mai; and a Chinese Embassy official.
This document describes the operation and maintenance services that the Chinese contractor provides to the Antiguan Government. It describes how the Chinese contractor handles all the maintenance services, trains the staff, and operates the power plant.
Strange agreement
Strangely enough, the report said, Antigua went ahead and signed the agreement which virtually offered no guarantee on the power plant.
However, under this Agreement, Antigua is responsible to pay the following:
1. Travel Expenses: Antigua must purchase one economy airplane ticket annually for every Chinese BCEG employee.
2. Prints and Reproductions: Antigua pays for the cost of all prints and reproductions necessary for BCEG to perform contracted services.
3. Computer Services: Antigua pays for any computer service charges incurred by BCEG in the performance of contracted services.
4. Materials and Equipment: Antigua must pay for any and all equipment, consumables, materials, supplies, spare parts, tools, and miscellaneous supplies procured for the Power Plant. This means that whenever parts have to be replaced for any reason, Antigua must foot the bill.
5. Transportation of Materials and Equipment: Not only does Antigua pay for the equipment, parts, etc., but Antigua must also pay for any and all shipping and transportation charges!
6. Utilities: Water, sewage, telephone, and waste disposal services for the Power Plant are all paid for by Antigua.
7. Insurance Expenses: If anything needs to be insured by BCEG, Antigua must pay up for the insurance expenses.
8. “Other: All other actual direct costs incurred in connection with the services” are paid by Antigua.
Well, under this Agreement, BCEG is to be paid US$2 million over two years. And for what? For maintenance Services. Antigua, and by extension, the Government, and by extension, the people, are paying BCEG over US$83,400 per month just for their time.
Additionally, the fact that all spare parts, materials and supplies must be paid for by Antigua raises the question, what warranty does Antigua have?
“Our limited information, thanks to the Government’s highly classified nature, indicates that there may not be any warranty at all,” the report said.
The report also made mention of the US$150M Cheddi Jagan International Airport (CJIA) expansion deal which was made under Guyana’s former President Bharrat Jagdeo with Chinese contractors.
“This was kept mostly out of the public’s eye at the time,” the news report said.
On July 29, 2011, the World Bank announced the “debarment of China Communications Construction Company (CCCC) Limited, and all its subsidiaries, for fraudulent practices under Phase 1 of the Philippines National Roads Improvement and Management Project.”
The report also mentioned a senior Chinese port official who was sentenced to death in December for taking bribes from the CJIA Chinese contractor.
“All of a sudden, former President Jagdeo called on the current President to review the contract. Jagdeo had previously taken a very defensive stance on the matter, but flipped following the World Bank announcement.”
According to the report, the Antigua and Guyana incidents are not so different.
“Both involve Chinese sub-contractors and contractors that had been involved in controversies. The contractor … in Guyana was debarred by the World Bank for corruption in the Philippines. So what is our Government waiting for? Why is the Government fighting the people on this matter? Why should they need to fight, if they have nothing to hide?”
Additionally, the Skeldon factory built by the Chinese has been plagued with problems since it became operational in 2009.

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