Jul 04, 2013 News
…says price includes doors, fittings, profits, labour
Government has defended the cost of toilet bowls for the US$150M expansion of the Cheddi Jagan International Airport (CJIA). Yesterday officials said that the contract signed was a lump sum one for that section of the contract.
“The articles fail to reflect that under such contracts the cost for each line item usually includes several other costs including materials, labour, overheads, transportation and profit.”
According to the contract signed between Government and China Harbour Engineering Company (CHEC) on November 10, 2011, the new airport wanted 69 toilet bowls costing US$2,121.06 each. This worked out to US$146,353.14 or over $29M.
This translated to $424,212 for each bowl.
Yesterday, in defending the contract price, the Ministry of Public Works said that it wished to “clarify” and “correct the renewed misconceptions being carried by Kaieteur News” CJIA’s expansion project.
The Ministry said that the stated costs of the bowls included the costs of the sewer lines and cubicle doors.
“For the particular sanitary items mentioned, there is no pricing stated for sewer lines, washroom cubicles and doors and the many fittings associated with the washroom; these are all catered for in the line item pricing such as “toilet set” – as is the case for all lump sum contracts.”
However, in the same Bill of Quantity listed in the contract, there are line items for vertical washbasins, urinals costing US$1,488.47 each; sink sets costing US$620.19 each and shower sets at US$387 each. It also included pipes, corrosion holders for pipes and butterfly valves. There are no explanations as to what were included in these prices.
According to the Ministry, it is “deliberately misleading for one to extract a line item indexed cost and represent that cost as the cost for the stated line item while completely ignoring the associated costs related to the item given the distributive nature of lump-sum contracts.”
The Ministry also argued that the airport expansion contract pricing is “very competitive and reasonable when compared to other airport contracts.”
According to the Ministry, the costs for CJIA’s expansion are comparative in terms of square meters.
It listed Chicago Midway US$281; Denver Colorado US$284; Washington US$353 and JFK Blue US$1,000 as against CJIA’s US$300 per square meter costs.
The Ministry also compared airport expansion to that of Bahamas –US$409M; St Vincent & the Grenadines – US$240M; St Maarten – US$232M; Cayman Island – US$244M; Barbados US$100M; Antigua & Barbuda – US$45M; Turks & Caicos– US$10M and El Salvador – US$32M as against Guyana US$150M.
“Guyana needs to have the necessary air transport facilities and infrastructure if it is going to attract new carriers the diaspora, business travelers and tourists in the new competitive environment,” the Ministry said.
However, it has been pointed out that the CJIA project may be difficult to compare to others as there are tax concessions unlike the others.
Government is obligated to supply sand and other filling materials. The government has also waived all duties, taxes, royalties and fees for which the contractor would have been obligated.
Conservative estimates has placed the expansion’s costs at US$250M, taking into account the waived taxes and sand filling and other expenses that the Guyana government will have to undertake.
In the case of St Vincent, the most relevant comparison in terms of regional airports, the US$240M costs is associated with a brand new airport and not an extension or expansion.
A brand new runway will see a landing distance of 2623 meters with three distinct inter-connecting apron areas. The apron area will cater for commercial, general aviation and cargo. It also includes a three-storey terminal building with 171,000 square feet of floor space, designed to handle 1.5M passengers per year. It will also accommodate the bigger, wide body Boeing 747-400 flights. New lands were acquired for the airport in St. Vincent.
The Guyana Government has tagged the airport as improving the local tourism climate and geared to attract bigger planes than the ones currently landing.
The constraints at CJIA, argued Government for the expansion, makes it impossible to tap into markets out of Africa and Asia, a distinct possibility given the country’s strategic location at the northern tip of South America.
However, the project has been facing criticisms after it was signed days before former President Bharrat Jagdeo left office in November 2011.
This year, the Opposition blocked over $5B from going to CJIA’s expansion project, saying that enough clarity on the spending has not been forthcoming.
Pic filed as CJIA
The proposed new CJIA facility.
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