US$150M airport project suspended

Jul 23, 2015 News

… govt. to discuss escalating costs with contractor

Minister David Patterson

Government has suspended the US$150M Timehri airport project, summoning principals of the Contractor from China to discuss the escalating costs.
Confirming that China Harbour Engineering Company Limited (CHEC) was instructed to halt work last week, Minister of Public Infrastructure, David Patterson, was yesterday confident that the matter could be resolved amicably with normalcy expected within a week, if all goes well.
CHEC has reportedly filed claims for some US$46M for works done. Such costs would put the runway extension at US$120M.
According to the original contract signed between the Government of Guyana and CHEC back in 2011, the runway extension by just over 1,000 meters was pegged at US$58M.
The David Granger administration since taking office in May, had vowed, during the lead-up to the May 11 General and Regional Elections, to review the project after becoming convinced that it was costing taxpayers too much…the project is the second largest one after the US$200M Skeldon sugar factory.
The new Government insists that it will not spend more than the US$150M budgeted for the project.
However, an assessment recently found that other costs, including a car park, would have placed the final figure beyond the US$200M mark.
According to Patterson yesterday, his initial assessment of the actual contract inked under the Bharrat Jagdeo administration in 2011, concluded that not much thought was put into the project and it appeared that it was written at the “back of a postage stamp”.
The Minister argued that it would have been difficult for the Chinese to start engaging the Government in August 2011 and then have a contract prepared and signed by November of that year.
He said that no one has been able to say what were the terms of reference given to the Chinese to prepare the tender that led to the eventual award of the contract to CHEC.
The Chinese government had granted Guyana a loan for US$138M with the remaining US$12M coming from the local treasury.
Patterson claimed that the Chinese are claiming that they were not provided enough information.
As a matter of fact, there is little information to suggest who negotiated the deal on behalf of the Government of Guyana.
The project appeared to have been put together, with contracts signed and works starting in less than 18 months.
Minister Patterson was critical of “ridiculous” aspects of the contract including one clause which mandates the Government of Guyana to guarantee CHEC some 10-hour work per day.
Patterson said that the initial thinking is to ensure a cap on the cost of the actual runway to ensure other aspects of the project are completed within budget.
There have been other questionable expenses like toilets sets which cost in excess of $400,000 apiece.
The contract had committed Guyana to providing filling materials like sand for the building of the runway.
Critics have been lambasting the project, saying it was too expensive and the circumstances of the award of the contract to CHEC remains at best, blurry.
The former administration, in pushing for the new airport, had argued that the country’s location makes it ideal as a South American hub from Africa.
The limitations of the runway and terminal were also factors cited in need of expansion to allow for bigger aircraft and a growing tourism market.