China Harbour Engineering Company (CHEC) is drawing controversy over a number of projects in the Caribbean, including the US$138 million expansion of the Cheddi Jagan International Airport, Timehri and others, which have evoked public criticism over procurement and tendering.
In Guyana, the China Exim Bank will fund the construction of a modern terminal building and the extension of the runway by 1,066 metres to reach a total of 3,336 metres. China Exim Bank is providing US$138 million ($11.9 billion) in financing.
In 2009 in Jamaica, CHEC signed to be the general contractor under the Ministry of Transport and Works and the National Works Agency for two main projects — the Palisadoes Shoreline Protection and Rehabilitation Works and the Jamaica Development Infrastructure Programme (JDIP).
According to news reports out of Jamaica, that country’s Contractor General reported that CHEC was opposed to competitive tendering for that project, saying it would not participate should this be the case.
The Chinese company is said to have submitted an unsolicited proposal which the Contractor General called “a highly irregular transaction which could not be matched by any other entity and/or person and as a consequence, has no relevance in a competitive tender process.”
Jamaica has been made CHEC’s regional hub since 2010 and from that island it oversees projects across 14 countries in the region. The Chinese firm established its regional headquarters after signing an agreement with the Jamaican government for two projects.
Reports out of Jamaica state that one of the projects that CHEC is involved in – the JDIP – is a five-year, US$400 million island-wide public works programme funded by a loan of US$340 million from China Exim Bank.
According to Jamaica media reports, the Palisadoes Road project – the other CHEC project – will cost US$65.7million, of which US$55.8 million is to be funded by the China Exim Bank.
Those reports say the government is expected to fund the remaining cost on both projects.
Since setting up shop in Jamaica in 2010, the Cheddi Jagan expansion is CHEC’s fourth project in the region. In October 2011, CHEC announced that it had signed a US$40 million agreement with the Bahamas to construct the Abaco Port and build a bridge that will link Little Abaco and North Abaco Islands. And also in October, it announced that it will begin construction of a cruise berthing facility in George Town, Cayman Islands.
Critics of the Bahamas development said that CHEC is executing the project in the Bahamas without the use of local workers. Critics also knocked the Bahamian government for allowing such a situation saying that the unemployment rates in the Bahamas are some of the highest in the region.
Similarly, critics of the proposed cruise ship port facility development in the Cayman Islands have critics in a state of unease. They feel that the 50-year life of the US$300 million project will cost the taxpayers of the Cayman Islands too much and that the nation’s treasure stands to lose about US$500 million.
The announcement in the Jamaica media about the CHEC’s involvement in the Timehri airport expansion resulted in a groundswell of criticism here. Members of opposition parties and other civil society stakeholders outright condemned the government for what they referred to as a secret deal signed in Jamaica. The government subsequently made available copies of the contract documents in the National Assembly.
The government here acknowledged that there was no public tendering for this project but that a stipulation of the Chinese funding was that CHEC be used for the project.
State-owned CHEC sealed new contracts worth US$5.2 billion last year, surpassing the target of US$3.85 billion set by its parent company China Communications Construction Co (CCCC).
According to Chinese media reports, CHEC full-year revenues hit US$2.5 billion last year, also surpassing its 2011 goal, and the company’s gross profit was US$190 million.
