Apr 02, 2016 News
A number of contractors in the hauling business are at odds with the Aurora Gold Mines (AGM) over rates.
The contractors, who said they have invested millions of dollars in new equipment, said
that the Canadian-owned company which started gold mining operations in Region Seven last year, has unilaterally been bringing down rates to the point that it is forcing them to lose monies.
AGM, on the other hand, is refuting the allegation and said they have been working with the contractors.
Contractors said that wear and tear on vehicles, insurance and other costs will see them losing on each trip. They said that rates have been slashed from over $550,000 from Buckhall to Aurora to $375,000 to the $270,000 being offered today. They are asking the company “to see with them.”
Contacted, AGM’s Administration Manager, Peter Benny, said that the company, like others, has financial obligations to lenders, shareholders, workers, suppliers, contractors and to the Government of Guyana.
“In order to meet those obligations we have to seek services that are competitive, reasonably priced and fair and just to everyone.”
Benny insisted that the process was not unilateral but done after a process of continuous consultations with all of the Logistics Haulers.
The hauling services included that of fuel, dangerous chemicals, general cargo and other items on barge from Georgetown.
Benny noted that contractors were told that the rates which were paid during the construction phase would not be applied during production as several factors have changed. “Primarily among the changes was the improved condition of the road. Our company had invested heavily to improve the general road condition including gradient, width, corners and proper surfacing and capping.”
The manager pointed out that a Peruvian-Australian joint venture group had hired most of the present haulage contractors
Because of deadlines, the contractors were given many trips, up to 20 per day, with significant sums paid.
”The haulage contractors haul fuel, general cargo and chemicals for AGM… They are given free room and board for all of their employees including drivers or operators, mechanics and welders and their supervisors.”
AGM said that it provides space for their equipment maintenance. The employees of the contractors are transported to and from the camp site from Georgetown free of cost— all charges are borne by AGM.
“The contractors are given fuel and lubricants to operate their equipment free of cost to them by AGM… the only thing that the contractor is responsible for is to provide his driver/operator and to do routine maintenance of their equipment.”
The official said that the company pays the rental rate of $270,000 per trip. This price was arrived at after an in-depth analysis of the actual cost to operate one piece of equipment for the distance, less the AGM contribution.
“…Even at this price the contractor is making a healthy profit… the days of construction are over and no longer can the company maintain or sustain so extreme rental rates and still be able to perform as a viable company.”
Benny said that the company cannot pay US$2,000 for each trip when the contractors’ overhead is significantly low and the company retains such costs.
“All of these issues were raised with the contractors who have apparently become so accustomed to those circumstances that they are refusing to adjust…”
A mail was sent to all the contractors indicating that the company would be offering the rate of $270,000 per trip and requested if they would be interested in a haulage contract with AGM.
“They all said they agreed with the price. It might be worth pointing out that the price of $250,000 was the price that some of the new contractors proposed, but AGM offered $270,000.”
With regards to the claims by some contractors that they have extended their investments, Benny noted they would have done so at their own risk since at no time did AGM give them any promises or assurances in that regard.”
AGM said that for the period 2013 to date, the company would have paid more than US$7M in rental rates to the same logistics haulers. The company said that it was even supportive in instances where such contractors needed financial assistance in acquiring equipment by providing letters to banks.
Benny insisted that the gold mining company, which helped boost gold declarations last year, is intent on following the rules of Guyana. It will practice good Corporate Governance, and “be very transparent and open with all our dealings”.
“I refuse to associate these complaints to that of our continuous contributions and to our Corporate Social Responsibility programmes. We have done much more than these hypocritical allegations from some of our aggrieved haulage contractor. What of the meat suppliers, the greens and vegetables and fruits suppliers? What of our fish and other fresh suppliers? Our taxi vendors those whom have benefited in no small ways from our expanded growth including air and river transports… hotels and restaurants… schools and the communities we have been supporting?”
Benny invited Kaieteur News to visit the Aurora operations and meet with workers and contractors to garner a “more balanced opinion of the workings of our company rather than to continuously position our company in a negative way based on all sorts of unfounded allegations.”
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