Government says it will withhold over G$1B from China Harbour Engineering Company (CHEC), the contractor in the massive ongoing expansion of the Cheddi Jagan International Airport (CJIA).
The money will represent the final of the US$138M in payments due to the Chinese company.
During that one-year period after, CHEC will have to fix any problems that arise or risk losing part of the US$6.9M. It is standard procedure for defects liability clauses to be inserted in especially state contracts.
The issue came up yesterday when Minister of Public Infrastructure, David Patterson, was grilled by Opposition members on the progress of the airport project.
Though securing financing in later 2011, the sod-turning of the project was not until March 2013, under the Donald Ramotar administration.
The project of building an entire new terminal building, longer runway, with more check-in and arrival booths, was supposed to have been completed in under two years.
However, while it was pushed back further to the end of this year, there are still more delays.
CHEC, while building the airport, was busy also with another major project- the MovieTown project at Turkeyen.
The David Granger administration in 2015 temporarily suspended the CJIA project to analyse what was happening.
CHEC was allowed to continue work, but the Coalition Government refused to pay more than the total US$138M. The project was estimated at US$150M, with Government putting in the rest.
Yesterday, during the considerations of his ministry’s budget for 2018, Patterson, in confirming that the December 31st deadline has been pushed back even further, said that in the first quarter of next year, there will be delivery of the airport’s generator, pump station, boarding corridor, departure lounge, and south-west runway.
Under questions from Opposition parliamentarian, Irfaan Ali, Minister Patterson confirmed that there will be no cost overruns, with the total cost of the project in Guyana dollars to be $30.9B.
Patterson shot down questions whether there were any provisions for defects liabilities monies to be retained in the 2018 budget.
Government had made some design changes to the project to ensure that the budget would suffice, especially as the loan had been inked for Chinese currency, but the contract between Guyana and CHEC was in US dollars. The cost had escalated for materials, as the exchange rate fluctuated, causing difficulties.
The design changes to the original plans had included building a new arrivals building and repairing the current terminal building.
Earlier this month, Patterson told the House that the final completion and commissioning of the facility would take place in 2018, with the New Arrivals Terminal set for completion in July and the Rehabilitated Departure Terminal Building aimed for completion by December.
Notably, the extension of the runway to the Northeast will be completed by this month-end.
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