Airport project “in limbo” after budget cut

Apr 26, 2013 News

By Latoya Giles
The authorities at the country’s only international airport have been stumped by Wednesday’s decision of the National Assembly to cut funding for its expansion plan by $5.3 billion and are now uncertain about the status of the project. The Opposition, in effecting the budget cut, argued that the government has been less than transparent on the expansion plan for the Cheddi Jagan International Airport (CJIA).
The Opposition parties said that they only approved last year’s initial funding for the expansion plan without knowledge that the arrangements with the contractor China Harbour Engineering Company Limited (CHEC) were tied up a full year before the financial arrangements with China Exim Bank were finalized. With the budget for the airport being cut, Chairman of the Board of Directors of CJIA, Ramesh Dookhoo, said that it would be very difficult to recover the Mobilization Advance of US$20.7M since the contractor had already commenced work on the project.
Secondly, he noted that there would have to be possible compensation to the contractor if the design and build contract has to be cancelled as a result of the budget cuts. Further, he said that it is possible that there would have to be compensation to China Exim Bank for cancellation of the loan agreement.

CJIA Chairman Ramesh Dookhoo says that there would have to be possible compensation to the contractor if the design and build contract has to be cancelled as a result of the budget cuts.

In addition, he spoke about the loss of potential airlines, since in some instances the decision to fly this route is predicated on the Airport Expansion Project. He said that this development may also impact the ability of Government of Guyana to secure future loans from banks in China.
Dookhoo reminded that the CJIA is the main port of entry to Guyana. He said that the airport processes over 543,000 passengers annually and in recent years has been bursting at its seams due to capacity constraints.
“The Airport plays a significant role in the economic growth of Guyana and it generates, facilitates such growth within the country by enabling the movement of goods and people, both locally and internationally and provides a range of services to the air transport sector,” Dookhoo stated.
He explained that the existing CJIA terminal building is approximately 9,000 sq. metres, and is divided into three sections. According to Dookhoo, the current airport is faced with many challenges on a daily basis. For example, he noted in the ‘Departures’ lounge, there are several areas that leak due to expansion of the concrete roof drains as a direct result of the vibrations caused by landing aircraft. Secondly he said that there is inadequate ventilation in the roof where the air-conditioning ducting is located, thus the buildup of heat causes condensation and damage to the ceiling tiles.
Additionally, Dookhoo said that the sewer lines in the terminal are four inches wide, and this proves inadequate during the peak seasons; at times the frequent uses of the toilet facilities lead to blockages in the system. The same can also be said for the plumbing network which comprises many non-pressure pipes thus leading to frequent blowouts and leaks. Needless to say, Dookhoo said, these challenges can prove to be very embarrassing and “do not reflect well on the image of this international gateway to Guyana”.
During the peak seasons, he said that there is an overflow of passengers in the Airport’s Terminal building, thus putting excessive strain on the current facility and its equipment. This affects the conveyor system, air conditioning, passenger-processing booth – Immigration. Additionally, he said that there is inadequate space on the International Apron, forcing aircraft to park on the taxiway which is contrary to airport regulations.
The current public car parking facilities are overrun; the public washrooms are inadequate. Apart from congestions, the environment during busy periods is conducive to chaos and this in turn leads to frustrated and exasperated passengers and airport users.
According to the chairman, it is important to note that the length of the primary runway is only 2,270 m (7,500ft) and therefore cannot accommodate larger (such as Boeing 747 and Airbus 330) aircraft used for longer range flights. He explained that Runway End Safety Area (RESA), a safety feature of runways that allows aircraft to slow safely in the event an aircraft overruns the runway end, does not exist at CJIA.
In the area of tourism, Dookhoo noted that the industry has shown steady growth over the last decade. According to the chairman, visitor arrivals have grown from 105,000 in 2000 to 171,000 in 2012, growing at an annual average of 4%. Dookhoo explained that with the worldwide growth in adventure, cultural and eco-tourism, Guyana’s appeal as an alternative to the standard Caribbean sun and sand destinations is underscored by its market niches such as bird watching, mountain climbing, hiking, sport fishing and yachting.
Dookhoo posited that if Guyana is to become a more competitive destination, there must be the need to widen the country’s appeal. He said that it is necessary to improve transport infrastructure for greater connectivity and more airlifts, reduce travel time/ travel cost. Therefore the airport’s expansion is a step towards enhancing the potential of the tourism sector which provides for approximately 2,500 jobs.
“The Government has already committed in excess of $1 billion in the past for modernization and enhancement of the Guyana Civil Aviation Authority (GCAA) air navigation and communication equipment at the Timehri and Ogle Control Towers to ensure that adequate services are provided to the industry. It is, therefore, important to understand the modernization and expansion of the Cheddi Jagan International Airport against this backdrop.
The economic developments, exportation of goods and services, and increase in passenger travel have created major opportunities for Guyana to benefit. These potential benefits will materialize through improvements to existing routes to North America and the creation of new air traffic routes to Europe while establishing linkages in Latin America and the Caribbean for carriers to operate locally and regionally thereby creating a hub for aviation operations.
The expanded airport will allow traffic to come directly from Europe instead of being routed via North America. Flight routes to South America, Latin America and Africa out of the English speaking Caribbean remains largely underdeveloped. The expansion of the Airport would therefore create a unique opportunity for Guyana to develop a hub to serve these unexplored markets both transit and direct traffic.
Once this is realized, the proximity of northern Brazil to Guyana makes Guyana an ideal transit point for the 4.0 million people living in this region of Brazil. The northern Brazilian population will save between 2 to 5 hours of travel time and benefit from lower fares as result of reduced airline operational costs. This will materialize if passengers travel through Guyana as opposed to travelling to southern Brazil (Sao Paulo or Rio de Janeiro) to reach their final destination. So, for these opportunities to be realized, improved airport facilities are needed.”

Aviation Fuel
Moreover, Dookhoo noted that with Guyoil entering the aviation fuel market, it is anticipated that in the near future Guyana will be able to sell aviation fuel competitively to the airlines. According to the chairman, “this will make this particular market more attractive to airlines using the airport for direct and in-transit flights. He said that the proposed airport expansion will facilitate the following, easy access to the European and other tourist markets where there is great potential for tourists visiting Guyana to experience the irresistible combination of fascinating and breathtaking natural beauty; pristine Amazonian rainforests; immense waterfalls and amazing wildlife”.
Secondly there would be an increase in travel from the Diaspora due to cheaper airfares. Further Dookhoo said that there will be an increase in tax revenue from new tourists and airlines.
He pointed out that apart from the need to accommodate the projected growth in the aviation industry, Guyana is poised to benefit from additional traffic due to several other activities which are taking place at home and in the region.
The increased travel to Guyana, according to the chairman, will allow tourists and travellers to spend money in the local economy on hotels, restaurants, shopping, ground transportation, and entertainment. It would also create jobs for numerous persons in the various associated sectors.

Development Benefits
“Growth in the air transport sector will complement other sectors such as mining and energy. The project will create new employment opportunities and provide training and development, and capacity building for existing and new employees. Other possible benefits include increases in the quality of goods and services available to consumers, and local and regional linkages for the import and export of commodities.
Direct benefits include improvements in facilitation, efficiency in processing time for passenger travel, implementing improved safety and security systems, and the overall enhancement of airport operations at CJIA.
An expanded airport operation will also attract other key businesses such as ground handling services, cargo handlers, security service providers, catering service, approved cafe, restaurants, franchise and so on; these will all create jobs,” Dookhoo said

Impact of the airport expansion
“The CJIA has a significant impact on the Guyana economy.” Dookhoo said that this arises from not only being a successful business entity, but more importantly, from playing a key role in the enabling and facilitating of a wide diversity of other business activities within the economy.
“The CJIA creates employment for approximately 900 persons, not to mention the other employment opportunities associated with the inflow of tourists such as hotel employees, catering companies, taxi providers, travel agencies etc.
At a national level, the largest share of impacts arises from the tourism sector. It is submitted that the movement and servicing of international and domestic travel will enable the generation of considerable revenue.”

Economic Benefits of the Project
Airport development generally brings a plethora of other significant benefits to the broad base of stakeholders by creating business opportunities, facilitating direct employment in aviation-related businesses and indirect employment in ancillary services. He said that it is estimated that in excess of 7,000 individuals are directly and indirectly employed as a result of CJIA and this is expected to grow significantly following the airport expansion.
Dookhoo said that the airport generally provides a range of important services to the local economies by serving the needs of the traveling public and the business sector that relies on air travel. It also facilitates tourism and visitors’ travelling and spending in the economy at large.

Security
Also present yesterday were Head of the Customs Anti Narcotics Unit James Singh and Deputy Commissioner of Police Seelall Persaud.
According to Persaud, the present airport structure was built long before organized crime became so prevalent in Guyana. He said that as this became more prominent in terms of security implications they had to operate in a physical environment that was already there.
Persaud said that they had to implement scanners and other things to help counter this. He said that new, important facility will help introduce more security gadgets which would address those demands. He said that he still has hope that things will change. He added that the physical environment presently does not help to properly fight crime.
Present also were a number of stakeholders from various groups related to the CIJA. They all expressed the need for some rethinking into the budget cut.