Jagdeo Administration accepts 69 toilet sets at $424,000 each in Airport Contract

Jul 01, 2013 News

…must be intoxicated in mind and pocket to agree to pay – Chris Ram

“…a shocking tale of recklessness and irresponsibility on the part of the Ministry of Public Works and indeed the entire Government who with their eyes open signed a contract that allows the contractor CHEC of Beijing China to fleece this country.” – Chartered Accountant Christopher Ram

Two toilet sets available in Georgetown yesterday for $33,600 (right) and $22,000 while government agrees to pay CHEC more than $424,000 for one

The Bharrat Jagdeo led administration that secretly inked the contract for the expansion of the Cheddi Jagan International Airport (CJIA), agreed to pay China Harbour Engineering Company (CHEC) a staggering $424,212 for a single toilet set.
In that contract with CHEC, the Guyana Government agreed to a price of $29.3M for the 69 toilet sets, at $424,212 for each toilet set.
This publication found on sale yesterday in Georgetown, toilet sets selling retail, one for $33,600 and another for $22,000.
Checks at other suppliers have revealed toilet sets on sale for as low as $15,500 while others can be found for $30,000 or even $20,000.
Vocal columnist and author of the Business Page, Christopher Ram, yesterday in his continued analysis of the once secret airport deal between the then Jagdeo Government and the Chinese Contractor lambasted the administration over what it had signed on to.
Ram posits that at present it seems that Guyanese seem to have lost the capacity to be offended, shocked or even becoming angry but “maybe, just maybe, the toilets and urinals are the tipping point.”
Ram, in dissecting the various aspects of the controversial contract said, “Before getting into those mega-bucks let us look at the prices being charged for some of the items we all can identify with, things like toilet sets and urinals, washbasins, sinks and showers.”
He said, “perhaps we resent the sheer vulgarity, obscenity and scale of the price gouging the Chinese are inflicting on us poor Guyanese or our memory of the infamous golden toilets of the deposed Shah of Iran…But someone must have been intoxicated or corrupted in mind and pocket to agree to pay for each of sixty-nine toilet bowls (sic) the sum of US$2,121.06 or $424,212 exclusive of VAT or any other duties and taxes.”
Ram went on to point out that the retail price at stores in Georgetown, ranges from $15,500 at Zong YA to $30,000 at National Hardware.
“In other words the wholesale tax free price being charged by the contractor is 27 times the retail price being charged by an ethnic Chinese trader to 14 times the retail price being charged by National Hardware.”
The eminent chartered accountant reported in his Business Page column that one person who was integrally involved in the Ogle Airport Expansion Project described the CJIA project as “nonsense” for which there is “no logical justification”.
The Accountant in his Business Page report said that his review benefitted from the input of a host of engineers, “who have looked at the contract for the expansion of the runway and the construction of a new terminal building.”
The conclusion is that the contract “is a shocking tale of recklessness and irresponsibility on the part of the Ministry of Public Works and indeed the entire Government who with their eyes wide open signed a contract that allows the contractor CHEC of Beijing China to fleece this country.”
According to Ram, a Guyanese engineer who practices his trade in the US and who reviewed the contract at his request described it as the most lopsided contract he had ever come across in his entire professional life.
“He was struck at the looseness of the language of the contract that allows the contractor easy escape from any liability and the disproportionate obligations which the government has assumed under the contract.”
Citing one specific example, the engineer noted that the contractor can claim against the Government that he needed to work 24 hours on any day but the Government did not allow it, presumably by ceasing all activities and flights on that day.
In such a case, the Government would be required to compensate the contractor.
According to Ram, the engineer, in giving his overall assessment of the contract wrote: “Wow, this is a sweet deal here. Does it mean that the contractor does not have to satisfactorily repair damages or defects? What about damages due to the contractor’s negligence?”
It was also noticed during a perusal of the contract document that there is no provision in the contract for an engineer, let alone provisions regarding verifying the quantity and quality of the work done and signing off on payments.
“An architect,” according to Ram, “described the design as the ugliest airport structure and layout he has seen, one that looks more like an industrial facility rather than anything close to a modern airport.”
Ram said that it was also questioned, “in which decade Guyana will need an airport that caters for eight planes simultaneously and whether the projections which someone shared with me and I shared with him are not irrationally exaggerated.”
It was pointed out also that the feasibility study appears to have been prepared to justify the expenditure rather than vice-versa and was based on traffic generated by Red Jet and EZee Jet which have long since disappeared.
“The sheer dishonesty comes to the fore when we remind ourselves that Robeson Benn admitted that there was only a narrow window to grab the Chinese money when the big man from Asia was passing through the region, only enough time for us to grab and no time for thinking…That is going to be one of Jagdeo’s lasting and costly legacies,” said Ram.
The deal, signed with the China Exim Bank in November days before former President, Jagdeo demitted Office, is putting US$138 million ($27.6 billion) in financing.
The airport deal was only made known to Guyanese after it was reported in the Jamaica Observer.
It was only after this newspaper and the privately-owned Stabroek News ran an online Jamaica Observer story about the project that the government confirmed that it had approved the project.