CJIA expansion likely to reach US$250M – Harmon

Dec 17, 2014 News

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– “somebody is leaving this contract filthy rich”

The Opposition is demanding Government to come clean and give the Guyanese public a

comprehensive report on the current multi-billion expansion project at the Cheddi Jagan International Airport (CJIA).
According to Member of Parliament, Joseph Harmon, of A Partnership for National Unity (APNU), the largest Opposition faction, information is that several changes have been made to the airport project’s initial plans.
“Some financial experts estimate that the true cost of the project is not going to be US$155M or US$158M, because when you add the several benefits attached, which the contractor is not paying for (included incentives like tax breaks) they estimate that we are looking in the vicinity of US$250M.”
Harmon asserted that the country is still to draw down on the Chinese loan US$130M loan slated for the airport’s expansion. He told media operatives yesterday that money being expended on the CJIA expansion project so far is that from the Treasury.
Harmon was speaking during a special press conference briefing at Timehri where he highlighted several inconsistencies with the project for which a contract was signed between Government and the Chinese contractor, China Harbour Engineering Corporation (CHEC).
Harmon explained that some of the changes now being made are as a result of poor planning and insufficient preliminary work, which will cost the Guyanese taxpayers an additional sum, estimated at US$20M. Outside of this, Harmon reported that further estimates – based on the contract agreements; benefits and advantages for the Chinese company, will take the expansion project beyond its initial US$155M cost, to over US$200M.

The Parliamentarian pointed out that according to the contract between Guyana and China, before Government could have drawn down on the loan from the Chinese Export-Import Bank, it would have had to pay up US$20M in advance payments.
These advances, Harmon listed, will see G$270M going to CHEC for supervisory work; $122M for China Harbour’s site accommodation, (which is currently under construction about a mile away from CJIA); $70M for temporary roads, $60M for traffic control during the construction period, $238M for insurance and $150M for performance bond (which CHEC is required to provide, but is being paid by the government with tax dollars). Another $100M will cover the cost of advance payments guarantee, $20M will go toward the drawings/ illustration of the finished project; $41M for signs and markings and $1.5M for layout structures and systems.
“All of this money is coming out of taxpayers’ pockets. It is our money,” Harmon charged. He opined that, “someone got to be making a lot of money on this contract and somebody is leaving this contract filthy rich.”
Harmon claimed that the real problem to the government is the poor preliminary work done on the project. “The cost of the expansion is likely to be increased by an additional US$20M because of “slackness” on the part of the administration; poor contract negotiations and poor planning for which we will be burden with that additional US$20M.”
On August 17, 2014, Public Works Minister Robeson Benn announced that the airport’s runway extension was marred by various problems. These include the provision of sand to the work site and soil composition issues. Government must now tell the Guyanese public what is happening with the airport expansion project, the MP demanded.
Harmon said that the contract stipulate that Government will provide sand to the work site, instead, the Chinese contractor has been granted permission to open a new sand mining pit from which they are removing sand from right within the community.
Another major issue raised by Harmon is the fact that CJIA and the Government has run into problems with the extension of the main runway at the north end. Engineers have reportedly found problems with the soil which could prove an issue with the foundation. Engineers are now testing soil in the south- the other end of the runway to determine the possibilities. With the Demerara River to the south and the Dakara Creek to the north, the options seem limited.
Additionally, no word has been given pertaining to the Timehri residents whose homes Government had signaled intentions to bulldoze if they fail to remove. Government said that residents are squatting on airport property, but Harmon insisted that Benn “has to come better when addressing the residents”, some of whom lived at Timehri long before the property was leased to Government.
Harmon said that the expansion project should have been completed in 32 months, “so today we should have been looking at a brand new facility.”
“The government must say to Guyanese where the money is going to come from and whether the China bank has actually started to advance any of the US$130M towards the project. As I understand it, right now it is only taxpayers’ money that is being spent on this project.”
It was Minister Benn in 2011, who had stated that the Chinese Vice Premier was in the Caribbean with a pocket full of money to give out. “This is the end of 2014,” Harmon said, “The government must tell the people where the money is… let them come out and make a very clear, definite statement on the project.”
The Parliamentarian declared that government consciously prorogued Parliament so that questions on various projects will not be asked. It was stated, however, that questions on these projects will not cease.
There were numerous questions asked about the costs of the airport expansion.
In the bill of quantities provided by Government, it was found that 69 toilet bowls were needed for the new terminal building to be built. Each would cost US$2,121.06 or $424,212 each. This worked out to US$146,353.14 or over $29M for the 69 bowls.
The Ministry of Public Works had denied the costs saying that the contract signed was a “lump sum” one for that section of the contract. The US$138M contract with CHEC also excludes all taxes, duties, royalties and fees of all kinds normally imposed by Guyana.
In justifying the expansion project, Government had pointed to the current space constraints and growing tourism as the reasons. Guyana’s geographic position at the northern tip of the South American continent made it ideal as a hub and a link to Asia and Africa, the government said.

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