The government is slated to meet this week with China Harbour Engineer-ing Corporation (CHEC), the contractors for the Cheddi Jagan International Airport (CJIA) Expansion Project to resolve a US$46 million contract dispute.
Minister of Public Infrastructure David Patterson told Stabroek News yesterday that representatives of the Chinese contractors were on their way to Guyana to find an amicable resolution and for work to recommence. The minister did not say specifically when the meeting is expected to take place but said that it should happen this week. He also did not provide Stabroek News with a timeframe for the suspension of work to be lifted and work on the project to commence.
“I have said that we will have to resolve this…it is impractical to have just a runway cost this percentage of the total contract,” he asserted.
The CJIA project is slated to cost US$150M and according to Patterson, the ballooning figure is not fiscally realistic. He said that after discussions with CHEC this week, the entire project and the specifications under the coalition government will need to be confined to the contract amount. Under the terms of the original contract, the project was expected to cost US$138M. Both APNU and the AFC were critical of the project while in the opposition and voted against the funding of it multiple times.
Stabroek News questioned the minister about what the government would do if they are unable to come to an agreement with CHEC for what the contract states is an additional amount owed. The minister said that he did not want to pronounce just yet but reiterated the “impractical” nature of the 3500 feet runway expansion costing over $9.2B.
He said that two years into the contract, so far roughly 9% of the work has been completed and the costs keep increasing. According to Patterson, expanding the runway northbound was not feasible and after discussions, expansion halfway north and halfway south was decided upon. However, the financing was not to go up under the revision.
The minister did not indicate whether the government was looking for another contractor given the investment with CHEC is already at this stage. He said that Cabinet has already given the go-ahead for the runway expansion but nixed the idea of a completely new airport terminal instead, choosing to expand on the current structure.
“Cabinet has said that we will continue the runway and upgrade of the terminal but all must fall under US$150M, that is the only way,” Patterson told Stabroek News.
The Chinese have not been keen on expansion of the current terminal instead opting for a newly constructed terminal under the contract. The government will also need to discuss its expectations with the contractors as it relates to the project. The APNU+AFC coalition government has been overwhelmed to some extent by the number of PPP/C-initiated government contracts as some do not have adequate preliminary documentation.
According to Patterson, the original Terms of Reference are not comprehensively known and now CHEC is claiming they are owed an additional US$46M. He noted that as it stands, CHEC signed onto the contract as is and the government is holding steadfast to that even though the contractor is claiming that the additional funds are owed due to a lack of initial information provided.
The project encompasses the construction of modern facilities; a new two-storey terminal building, west of the existing one and several air-bridges to link aircraft to the new terminal; and the extension of the primary runway by an additional 1,066 metres. It was set to be completed over a 32-month period but has suffered delays due to the cutting off funds and other problems.
Meanwhile, the controversial contractor is now under investigation for allegedly offering a bribe to the failed presidential re-election campaign of Mahinda Rajapaksa in Sri Lanka. Reuters reported that at the centre of the probe by the police and central bank in Sri Lanka is CHEC, which under Rajapaksa secured a US$1.4 billion deal to build a port city in Colombo that has been suspended by the current government, headed by former Rajapaksa ally and now President, Maithripala Sirisena.
(Pushpa Balgobin)
