A new airport is difficult to support

Jul 13, 2014 AFC Column, Features / Columnists

By Dominic Gaskin
Is it not time that we seek to prioritize the series of large projects which are intended to contribute to the development of our country over the next twenty years? The alternative, for an underdeveloped country such as ours, is frightening.

Dominic Gaskin

With a significant infrastructural deficit, Guyana will have to invest heavily in order to catch up with its needs in several critical sectors. The costs of these investments will ultimately be borne by the citizens of this country in some form or the other, and for some time to come. With a lucky-dip approach to selecting major infrastructure projects, and no long-term plan for harnessing the benefits, we will merely be making monuments instead of developing a country.
The danger of costly exhibits taking the place of more urgently needed investments is a very real one. Our borrowing potential is not unlimited. At some point we will become a risky prospect for lending institutions. Even before that, our foreign debt will reach the limit of G$400B imposed by the External Loans Act. And what then?
It is clear that the PPP-C government has learnt nothing from the complete failure of the US$200M Skeldon Sugar Factory to improve the performance of the sugar industry. The magnitude of that disaster alone should have warranted a whole new approach, but instead, exhilarated by the easy availability of Chinese loans, the government has gone on a borrowing spree.
In doing so it has done very little to ensure that Guyanese get a decent slice of the pie that these lucrative projects represent. In a world where big projects are usually an opportunity for governments to inject money into their own economies, our government is ceding almost all but a few crumbs to the Chinese.
The mandate of the Export-Import Bank of China is to promote Chinese exports and lending is conditional on contracts being awarded to Chinese companies, who in turn will use as much Chinese materials, products, services and even labour as possible. Given our high levels of unemployment, the use of unskilled Chinese labourers here in Guyana is unpardonable. The failure of our government to negotiate better terms and conditions for Guyana is an indication of its disdain for the very Guyanese workforce it has cultivated during its almost twenty-two years in office.
It is in the light of these concerns that the AFC finds it difficult to support the hastily conceived Cheddi Jagan International Airport (CJIA) Modernization Project which has a price tag of US$150M, mostly financed by the Export-Import Bank of China (US$138M). The Guyanese public first learnt of this deal in 2011 when it was reported in the November 18th edition of the Jamaica Observer under the headline “China Harbour expands to Guyana”. A press release from the regional headquarters of China Harbour and Engineering Company (CHEC) in Jamaica contained details of an agreement it had signed to extend the runway and construct a modern terminal building at the CJIA.
In terms of cost, this project is the second biggest ever undertaken in Guyana, and the initial details should have come to our attention via our government and not through a foreign news report. Notwithstanding its shaky start, there are other aspects of this project that are at odds with the transformative role it is expected to play in our county’s development.
Whatever was being contemplated under the original CJIA modernization project that first appeared in the budget estimates of 2011 with a total project cost of G$4B (US$20M) was subsequently replaced by the CHEC agreement, and in the estimates for 2012 the total project cost was increased to G$32B (US$160M). It is suspected that the promise of concessionary financing during an encounter between a Guyanese delegation and Chinese Vice-Premier Wang Qishan at the Caribbean Economic and Trade Co-operation Forum in Trinidad in September of 2011 may have cemented an ongoing secret deal between the Government of Guyana and CHEC.
In any event, the contract between the Government of Guyana and CHEC to design and construct a new airport was quietly signed on November 10th 2011. After this came the feasibility study produced by the Ministry of Public Works in April of 2012, seeking to justify the done deal. The loan agreement was then signed on October 31st 2012. The sequence of events suggests that this project is a Chinese initiative and it is evident that local procurement procedures were violated in order to facilitate the award of the contract to CHEC. The company would no doubt have been grateful.
The AFC has always supported the extension of the existing runway in order to accommodate larger aircraft, and the party’s approval for the sum of G$4.5B budgeted for the modernization project in 2012 was given on the assumption that this sum would go towards the extension. Instead it was used as an advance payment for the commencement of the entire project which the opposition had already indicated it could not support since it had not been fully informed.
The revenue projections contained in the feasibility study are based on increased annual passenger movement estimated at five, seven and nine percent representing low, medium and high growth rates respectively. Even using the lowest estimated rate of growth in passenger movement (five percent), incoming passengers were projected to increase from 236,344 in 2011 to 333,619 in 2015 and to 800,345 by the year 2036. However, with arrivals for the year 2013 reported at 235,967 we are clearly not on the right trajectory.
The AFC considers the projected increases in passenger movement contained in the feasibility report to be optimistic. The highest rate of nine percent, which would yield two million arrivals by the year 2036, while not totally impossible, would require a gigantic effort. Simply building a new airport will not bring serious numbers of visitors to Guyana. Nor will building a Marriott Hotel.
There are a number of actions that need to be taken if we are to become an attractive destination for global travelers. A few hundred birdwatchers, oilmen and gold rushers will not give us the visitor numbers projected. Neither will returning Guyanese, who currently make up the bulk of the passengers on any given arriving flight. Guyana will have to actively promote itself to the outside world, and what is promoted will have to be backed up by what actually exists. And therein lies the problem. The PPP-C has not demonstrated the capacity or even the willingness to deal with the blatant lawlessness that prevails across the entire country. The following excerpts from Lonely Planet’s online travel guide do no paint an attractive picture:
• “Guyana (Georgetown in particular) is notorious for street crime. Avoid potentially hazardous situations and be aware of others on the street.”
• “Hitchhiking is not recommended – the threat of robbery and/or physical danger is very real. You’d be nuts to hitch here!”
• “At Cheddi Jagan International Airport, try to arrive during daylight and use only registered airport taxis.”
An official travel advisory from the Government of Canada is equally unflattering.
• “Poor road conditions, inadequate lighting, roaming animals and poor driving habits are constant hazards. Be extremely cautious when driving, keep windows closed and doors locked at all times, and avoid being on the road unnecessarily after dark.”
Under public Transportation it advises:
• “Avoid public minibuses, as they tend to be overloaded, poorly maintained and badly driven.”
Comments such as these make Guyana a hard sell and, with no credible plan to address these issues, this government cannot hope to attract more than a few curious souls to this dear land of ours. All its talk about tourism needs to be backed up with firm commitments, to ending the lawlessness that has taken over the country. It also needs to show that it has a strategic plan to promote Guyana as a tourist destination and an economic development plan that justifies the prioritization of a new airport. Then, and only then, will the AFC support this project.