Sep 24, 2020 News
Breach of duty-free concessions…
In 2011, China Harbour Engineering Company (CHEC) was awarded a US$150M contract to build Guyana a bigger, modernized airport.
It would have included a longer runway to accommodate wide-body planes and a brand-new terminal building with escalators and elevators and glass roof.
Despite evidence that the price tag was through the roof, Guyana was still willing to settle for the modern airport that was promised.
Almost a decade later, Guyana is still waiting and there are tough questions being asked now.
Like what exactly went wrong.
On Monday, President Irfaan Ali, during a visit and tour of the Cheddi Jagan International Airport (CJIA) made it clear that Guyana would not be accepting the project.
CHEC is owed millions.
In fact, he said, Guyana signed a specific agreement for a fixed price and it was clear what Guyana should get.
He ordered an investigation and said that all stops should be pulled out to fix the issues.
The issues, according to persons associated with the project, had to do mostly with the freedom that CHEC had.
Under its contract, it was allowed to bring in materials and equipment duty-free, to the tune of billions of dollars.
In other words, the Chinese state-controlled company did not have to pay taxes.
There was a catch. CHEC could not use the equipment for anything else except the airport project. The concessions laws are strict about that.
However, from earlier reports published by Kaieteur News back in 2016, and never refuted by CHEC, the company used the equipment illegally on the MovieTowne project.
Located at Turkeyen, that mall project was introduced around the same time as the airport project.
According to officials, CHEC used its trucks and other vehicles and possibly even sand from the airport project on the MovieTowne construction at Turkeyen, East Coast Demerara.
CHEC’s trucks, more than 25 of them, were granted duty free concessions by the previous government for the airport work.
CHEC also reportedly received tax waivers on at least six pick-ups and four SUVs.
Somewhere along the way, the company’s sister company, China Harbour Engineering (T&T) Ltd. (CHEC), also managed to win the contract to construct the MovieTowne project.
The Turkeyen project, to include eight cinemas and food courts among other things, was contracted to CHEC in December 2014 for US$30M. It has been completed and is operational.
However, it appeared that CHEC decided to use the equipment that it has stationed at the airport, including the trucks, to work along with the MovieTowne project.
Late in 2015, CHEC’s trucks were spotted on the East Bank Demerara road with sand. It was after hours. The trucks were not supposed to be working at nights.
The supervising consultant of the airport project, a Canadian company called MMM Group, was alerted but CHEC had an explanation why the trucks were on the road at that hour. The company said the trucks were taking sand from a sandpit belonging to a businessman who operates in the Yarrowkabra area, Soesdyke/Linden Highway, to the MovieTowne site.
CHEC never refuted the story that was published by this paper in 2016.
CHEC reportedly managed to even acquire receipts of payments from the businessman to prove its story. What was not explained was how the trucks that could only work on the airport project were allowed to take sand to another location.
For the airport project, CHEC was allowed use of three sandpits, two loam pits and two pagasse pits.
As a matter of fact, a few pieces of equipment including a tower crane that came for the CJIA project was put into use at MovieTowne.
In 2015, truckers complained that the company bypassed them and hired trucks of BaiShanLin, a disgraced logging company, to help fetch sand in the airport project.
BaiShanLin was blocked shortly after from participating in the contract as those trucks were illegal there…It had been granted concessions specifically for forestry purposes.
In March 2013, the PPP/C Government turned the sod for the US$150M airport expansion.
In 2011, Guyana learnt about CHEC after a Jamaica newspaper broke the news that the Guyana
Government later said that it was about to announce the signing when the news was prematurely leaked.
CHEC has been handed the contract for the Pegasus Hotel expansion.
It is significantly on the way to completion. In the meantime, the CJIA project is dragging along.
In recent years, consecutive Governments have received flak for the management of foreign investors and contractors to ensure that they comply with agreements and not abuse concessions.
The CJIA expansion project has now spanned four presidencies, starting with Bharrat Jagdeo.
It has raised serious questions about the level of supervision and monitoring of contractors on
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