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Look out for the supplier of that 200,000 crushed stone
Dear Editor,
The Chinese General Contractor for the CJIA expansion project having a supplier out of Suriname to supply crushed stone is simply maximizing profits. I do not know the details of the contract documents but I would like to share my opinion on lessons learnt during my years of practice in construction.
A contractor will find loopholes within the contract that allows him to increase his bottom line. Based on published information the CJIA contractor has inked a deal to import crushed stone from NV Grassalco, at a landed rate in Guyana of US$26 per ton. I read that one local supplier Toolsie Persaud Limited (TPL) is seeking US$36 per ton and is an unhappy ‘camper’.
It is also reported that the CJIA project requires 300,000 ton of crushed stone. TPL says that they were not aware of the amount of stone that was required and would have quoted a better price. Do I believe TPL? Of course not. In my opinion they were trying to make a ‘kill’. Anyhow, what is important here is that the crushed stone is imported from a company called NV Grassalco that is owned and operated by the Suriname Government.
A visit to the website for Grassalco (www.grassalco.com) will provide useful information about this stone deal and that negotiations have been ongoing since December 2015 with the CJIA contractor.
Further reading shows that NV Grassalco is in a joint venture with Zhong Da International Engineering Company NV (ZDIEC) for the supply of this crushed stone with Grassalco accounting for a delivery of 100,000 tons. Trying to find information on ZDIEC-NV was not successful and I am forced to wonder if ZDIEC-NV is more than just a vendor supplying stone to the CJIA expansion project. It is therefore worthy of the owner of the CJIA expansion project (GoG) to be on the look-out for the source of the additional 200,000 tons of crushed stone that will not be supplied by Grassalco NV and to perform on-going quality checks per the contract documents.
Unquestionably, Guyana needs to do more to protect local manufactured products. But at the same time local manufacturers should not practice price gouging. It is important that local quarries study their cost of production and introduce measures to match or better their CARICOM counterparts or else they will soon be out of business or unless they themselves are the contractor. Finally, I have worked on a project in the US that included a Buy-America clause in the contract document.
The Government needs to fix this as Grassalco describes this as a ‘mega deal’ on their 45th anniversary.
Ralph Seegobin, P.E.
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