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Patterson demands answers on status of $14B CJIA bonds
– Edghill says all bonds are enforced
Former Public Infrastructure Minister, David Patterson
Kaieteur News – Member of Parliament and former Minister of Public Infrastructure, David Patterson on Friday called on the Government to make known the status of the bonds put in place by the Government and the China Harbour Engineering Corporation (CHEC) for the renovation of the Cheddi Jagan International Airport (CJIA). Following issues with the quality of the work done by CHEC, the contractor, Patterson had indicated that the government could have simply tapped into the bonds totaling some US$14 billion. After Patterson repeated this during his budget speech on Friday, Senior Public Works Minister, Juan Edghill told Kaieteur News last night that the bonds are currently enforced, and that Patterson is talking “absolute nonsense”.
“Mr. Speaker, included in budget 2021, is the sum of G$2.5B that has been earmarked for the CJIA expansion,” Patterson said of the funds government put aside to complete the project. “However, the nation was told in December 2020, that the contractor CHEC was going to undertake G$1.8B additional works which included the extension of the terminal building as well as 2 new passenger boarding bridges – so the question is why are taxpayers footing another bill of G$2.5B? After the additional works of the contractor, what will the $2.5B be spent on? Answers are needed as to who will be executing these works and what procurement process will be utilized?”
These funds add to more US$150M already expended on this project, which is now in its tenth year. Government had initially committed US$12M to add to the loan of US$138M.
Public Works Minister, Juan Edghill
“Mr. Speaker,” Patterson told the House on Friday, “what should be of most immediate concern to the citizens is the status of the contractor’s performance and retention bonds.”
Patterson said the bonds are important because since the end of the loan period, China Export Import Bank (EXIM) paid out the last of its US$138M loan to Guyana for the renovation of the port. Patterson claimed the bonds expired on December 31, 2020.
“In other words,” he said, “CHEC can walk off the site today, and the Ministry and the country will lose US$14M with no other recourse than to seek redress in the courts – a wholly unsatisfactory and unacceptable position.”
Speaking to Kaieteur News last night, Edghill said that there are two bonds needed for active contracts – the performance and advance payment bonds. He also mentioned the retention bond, which insures the contractor would make corrections to defective infrastructure, during a defects liability period.
“You have to have a performance bond, which guarantees the performance of the project, which was at all times enforced since I came into office,” Edghill said. “And I have said to the Chinese, if they don’t perform, we will pull the performance bond, and then, secondly, there is what is called an advance payment bond, which is money that you would have received upfront and as you work, it is deducted. And then there is also a retention bond. Because when you finish doing the job, there is a period of defects liability where monies have to be retained if anything goes wrong. All the bonds are enforced and they are being released based upon the performance, and things of that nature.”
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