Airport contractor gets warning

Mar 06, 2015 News

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…APNU-AFC coalition will “immediately halt contract, review Terms & Conditions”  
 
China Harbour Engineering Corporation (CHEC) has been put on notice and warned that as soon as the

coalition A Partnership for National Unity (APNU) – Alliance for Change (AFC) Government takes Office, the US$138M Contract for the expansion of the Cheddi Jagan International Airport, will be immediately halted and its terms and conditions reviewed.
This is the assurance given by Joseph Harmon, who held the portfolio for Public Works and Infrastructure in the Shadow Cabinet of the 10th Parliament.
Harmon made the disclosure yesterday during an exclusive interview with this publication, minutes before APNU-AFC formally launched its 2015 Elections Campaign at the Savannah Suite of the Pegasus Hotel.
“We will review these projects,” Harmon reiterated.
He re-emphasised APNU’s position that “we are not going to just take what the government throws in our laps and run with it like that.”
The retired Lieutenant Colonel of the Guyana Defence Force (GDF), who is currently a practicing Attorney-at-Law and APNU General Secretary, told the Kaieteur News, “We will review all of the terms and conditions of the contract…We will review the performance of the contract.”
Harmon said that the APNU-AFC administration upon assuming office will immediately place a pause on the lopsided US$138M contract which was inked between the Ministry of Public Works and CHEC, just days before the last general elections. He said that the project cannot be allowed to continue apace without a review as “we may very well be running into expenses that we never catered for.”
Confronted with the fact that Government signed on to pay the Chinese compensation in the event that it is responsible for a delay in the project, Harmon said, “we cannot hold ourselves bound by those terms and conditions which have been negotiated without proper legal advice.”
According to the practicing attorney, “this contract was just hurriedly signed without a proper legal mind.”
He said that there was no clear determination as to whether the contract is in the interest of the people of Guyana or the contractors or any other favoured interests but “we will definitely have to review it.”
To allow the project to continue without halting it for review, according to Harmon, would be similar to the APNU-AFC coalition jumping into a moving vehicle without its hands on the necessary controls.
Not wanting to speculate on any ulterior motives behind the hurried pursuit of massive CJIA expansion project, Harmon said, “I would not want to venture into speculation”. He did point out, though, that CHEC can profit either through its competence or the incompetence of the administration with which it inked the contract.
“Very many cases what I find is that the way this government negotiated contracts, they were very loose in the terms and conditions and therefore companies were making profit even without their best skill and ability on the ground itself.”
The US$138M contract entered into by the Ministry of Public Works with CHEC, has again resurfaced in the media, after it was discovered by this publication that the contractor, CHEC, is woefully behind schedule and cannot make its September deadline.
Among some of the terms and conditions of the hastily inked contract is the fact that the Ministry of Public Works has agreed to pay all customs duties for CHEC, should any of its requests for exemption be refused by the Guyana Revenue Authority (GRA).
This is enshrined in the US$138M contract.
The contract which has been highly criticized for its numerous concessions to the contractor was inked on November 10, 2011, days before the then president, Bharrat Jagdeo demitted office.
According to the document secretly inked in Jamaica, all Goods and Equipment imported by the CHEC into Guyana shall be exempt from all taxes, duties, royalties and fees imposed by the Guyana Governmental and statutory authorities. If the exemption is not granted, however, the customs duties payable and paid shall be reimbursed by the Ministry of Public Works.
That Ministry under its obligations to the Chinese Contractor—who is now woefully behind schedule with the expansion project—has also agreed to endorse the necessary exemption documents prepared by the Chinese Contractor for presentation in order to clear Customs.
Another glaring aspect of the contract – which has been heavily criticized for being lopsided in favour of the Chinese Contractor undertaking the expansion programme – is that Government has agreed to supply and deliver free of cost, more than 500,000 truck-loads of the sand required for backfilling of the extension of the airport runway.
Not only is the Ministry supplying and delivering the sand free of cost to CHEC, it has also agreed that should it fail to satisfy this requirement, CHEC shall be entitled to claim expense and time extension accordingly.
Works Minister Robeson Benn said that the 500,000 truck-loads of sand represents part of Guyana’s contribution to the project.
According to the contract document, “The acceptance, inspection, care, custody and control of the material supplied” by the Ministry of Public Works, shall not relieve it “of liability for any shortage, defect, or default of the material.”
Having already fallen behind on its 32-month construction schedule, CHEC is now preparing to present Government with a supplemental work programme requesting a substantial extension to its September 2015 deadline for the CJIA expansion project.
Earlier this year, when CJIA Chief Executive Officer, Ramesh Ghir presented an update on the expansion project, he said that the project was already behind schedule.
By the end of last year, in excess of US$30M had been disbursed to CHEC for works executed under the project.
CHEC is also currently under fire in Jamaica for illegally quarrying on the CARICOM island.
According to that country’s regulatory body, CHEC, since late last year, has been illegally quarrying hillsides on lands the company purchased in that area, without approval from the National Environment and Planning Agency (NEPA) and other entities.

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