In 2015, CHEC claimed US$90M for 7% work
The Coalition Government, under pressure to explain major modifications to the Cheddi Jagan International Airport (CJIA) project, has come out swinging, yesterday insisting that the blame has to be laid squarely at the feet of the People’s Progressive Party/Civic (PPP/C).
In a statement, Minister of Public Infrastructure, David Patterson, also disclosed for more than 15 months, the Chinese contractor had no independent contractor in place to overlook the work, on behalf of the people of Guyana.
In fact, in 2015, when the Coalition Government entered office, it found that China Harbour Engineering Company (CHEC), the contractor, which was not chosen via any tender process, had claimed for up to US$90M — more than half the money– despite only finishing about seven percent of the work.
The project has been dragging on now for almost a decade, spanning three different administrations.
It is the biggest on-land project ongoing at the moment by the Government.
Instead of a brand new terminal building with energy-saving roof to house the departure and arrival area, a much smaller one to hold the arrival has been built with the old terminal gutted and renovated.
An analysis of the Bill of Quantities approved by the PPP/C in 2011 found that prices were highly inflated with local contractors insisting that the project with all the bells and whistles should not have exceeded the US$40M mark.
The statement by Patterson also criticised Kaieteur News reportage of the project which has been questioning the spending of that huge amount and whether this country was receiving value for its dollars.
Under the contract, CHEC, was supposed to be paid US$138M for the construction. The balance of US$12M was coming from Government of Guyana for other works.
According to Patterson, in 2015, his government had faced three choices- scrap the project; plug more money or use the remainder of the loan to complete it.
Patterson said that the contract for the extension of CJIA was signed on November 11, 2011 between CHEC and the then Ministry of Public Works and Communications.
It would have happened day before general elections, near the ending of the Constitutional two-term limit of former President Bharrat Jagdeo.
Sitting at the head of that ministry in 2011 was Robeson Benn.
At the time of contract signing, there were no feasibility studies done; no soil
investigations executed; no site surveys and no detailed studies.
In fact, there were absolutely no preliminary reports that were prepared.
However, a contract sum and general scope of works were agreed, the minister said.
It did not stop there…Actual construction works did not commence on site until January 16, 2013 – fifteen months after the signing of the contract.
The shocker was that the Supervising Consultants, MMM Group Limited in association with CEMCO, a local company, did not commence their supervision until July 1, 2014, which meant that CHEC worked for over 15 months without independent supervision.
Commenting on cost of sand, Minister Patterson noted that the contract signed by the then Government allowed for the provision of sand free of cost to the contractor, within a 12km radius of the project.
The PPP/C government committed Guyana to pay US$3.115 per cubic metre for the “exploit and transportation of sand”.
According to Patterson, the problems associated with the lack of preparation caused additional excavation and sand filling to the tune of tens of millions of dollars.
“Soon after commencement of the works in 2013, the soil conditions in the proposed North East runway was found to be unsuitable (something that could have been discovered if studies were executed before the signing of the Contract).
The decision to also extend the runway in the South West direction was taken by the then PPP/C Government since 2013. This decision resulted in additional excavation and sand filling.”
The minister disclosed that in 2015, the new Government was presented with a project that was badly performing, with almost 35% of the monies were already expended.
Only 7 % completed
The contractor had claims for over US$44M – If successful, that would have meant that Government of Guyana (GoG) would have paid US$90M for less than seven per cent of the actual work.
“An assessment of the project was done in 2015 and the GoG was presented with these options a) abandon the project completely, which carried the risk of losing all the monies already paid to the contractor as well as a possible court case, b) allocate additional funds to the project (estimated at approximately US$35M), to make up for the poor preliminary planning and execution or c) complete the project within the allocated contract sum.”
Patterson disclosed that the Cabinet, after deliberations opted for option C.
However, there were strict guidelines- that the contract sum remains at the same level and that the runway be completed to international specifications.
He said that this was always the position of the Coalition even while in Opposition.
Cabinet was also insistent that the terminal buildings must be able to adequately accommodate the projected passenger increases and that no unnecessary residents of Timehri North be removed.
It was the intentions of the PPP/C government to move over 2,000 residents as part of this expansion programme, Patterson said.
Patterson said that despite the “accusations of KN”, the decision to allow extra sand filling plus the cost payable for the sand was all taken by the PPP/C government – thus the volume of sand filling required moved from 4.4M cubic metres to 10.1M cubic metres – This is due to the fact that the South West section is at a lower elevation than the North East.
He pointed that that it was not this administration but rather the PPP/C that determined the cost of the sand.
“My team has worked hard to salvage this project within the constraints that existed, and we are proud of the outcome and the benefits for our country. I trust the above sheds some additional light on this topic.”
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