The opposition-led budget cuts could see the government faced with US$110,000—equivalent to just over $22 million—per day in overage charges if the Cheddi Jagan International Airport, Timehri (CJIA) expansion project is scrapped, according to the PPP.
But APNU MP and Shadow Finance Minister Carl Greenidge says that the government is using the cuts as a political tool and attempting to manipulate the facts, while adding that the expansion has not been written off entirely but a plan is needed.
“We have a tremendous amount of legal liability because we have contracts now that we cannot discharge our obligations under,” PPP Central Committee member Anil Nandlall told a news conference on Monday at Freedom House, suggesting that it would mean severe ramifications for taxpayers.
Chairman of the CJIA Board Ramesh Dookhoo last week warned that there is the possible compensation to contractor China Harbour Engineering Inc (CHEC) for cancellation of contract and the possible compensation to China Exim Bank for cancellation of loan agreement.
Nandlall, who is Minister of Legal Affairs, stated that the CJIA expansion project would cost US$110,000 per day in overage charges for work not being done. “That is over $20 million per day in liquidated damages if the government is for whatever reason unable to discharge its obligation. In ten days it is $200 million,” he said.
Nandlall noted that Guyana was gravitating toward become a hub for international investment. He said that the various budget cuts would be a negative image to investors, especially in regards to large scale projects. In this regard, he stated that the CJIA expansion was necessity because airlines have repeatedly stated that the runway was, in its current state, deficient. Without the expansion project, he added, further investment could be stunted because foreign investors and developers may not view Guyana as a stable environment.
He said that Guyana was not an attractive market when compared to other destinations in the Caribbean for tourism, so as a result it was necessary to attract people through state-of-the-art facilities. “If we give them reasons to consider us, they will consider us,” Nandlall said of investors, tourists and developers.
Nandlall said too that contracts with foreign investors had serious punitive sanctions attached and the Cheddi Jagan International Airport expansion was one of many. He also said the money that the lag in contractual obligations will cost the government could be better invested in other projects aimed at development.
‘No plan’
Greenidge, however, told Stabroek News that prior to the budget being passed by the president, the government had the opportunity to adjust the transportation heading. “We would’ve passed it on Friday if they had come back with the hinterland rehabilitation budget and the other projects under t
he heading,” Greenidge stated, while adding that this was not done and the government was insinuating that the opposition cut the entire heading with malicious intent. “The first thing that needed to happen was the technical team needed to be organised and the numbers looked over and gaps in the minister’s presentation answered. Then the parties meet and discuss and that was not done after the budget cut,” Greenidge stated.
He further said that APNU has not written off the airport expansion. Greenidge said the Public Works Ministry was yet to have a plan to remove the GDF base, the prison and the citizens settled in the surrounding area. He stated that “they cannot expect that you had a year to work the technicalities out and when the budget was prepared they had no plan for the removal of these entities to expand. You cannot do that. You cannot expect to not have a plan and your allotment be approved,” he said.
Greenidge said the government can rework a budget for the airstrip at the CJIA and the opposition will deal with the funds on a yearly basis as that was the reality of governance. “Contracts are not signed and money is just doled out and this issue that it will fall to the taxpayer to pay interest and all of that is not true, simply not true,” Greenidge said, while adding that contracts and loans are signed everyday with international partners and they must be signed so that Guyana is benefitting and not losing out.
“All of these contracts are different some are more complicated than others…as a general observation, if the government feels that it has committed itself so far that it cannot turn back without heavy penalties, then [the] contract should not have been signed,” he said, while adding that all contracts have frameworks in place to have them altered. “You can de-commit from the contacts and you pay an interest on the balance that is just one possibility, many developing countries will do this if they realise that all the money is not needed for a project and many times this will work out cheaper than the entire contract,” he explained.
The CJIA $5.35 billion expansion was cut from the budget estimates along with the rest of the Air Transport Programme budget, which included a $26.33 million final payment to the European Union for the Ogle Airport Aerodrome. Also cut in the 2013 budget was the $1.2 billion allotted for the specialty hospital, for which funding was to be provided on terms by the Indian government.
