After nine years, the Government of Guyana has warned China Harbour and Engineering Company Limited (CHEC) that it is mulling legal action against it since it has failed to deliver on works for the Cheddi Jagan International Airport (CJIA), Timehri expansion project.
In a letter sent to the CHEC Chairman Lin Yizhong on December 8th, Attorney General Anil Nandlall informed that the government will also reject any unilateral demand for additional payment by the company to complete the project.
Minister of Public Works Juan Edghill has already warned that December 31, 2020 is the “drop dead” date for the Chinese company to comply with outstanding obligations.
In the letter of December 8th, Nandlall said the government has already voiced its dissatisfaction with CHEC’s performance. He informed the chairman that they have also contacted Wang Tongzhou, Chairman of China Communications Construction Group, the parent company of CHEC and the Chief Executive Officer of the Export-Import Bank of China on the breach of contract.
Apart from failing to deliver on the works in the contract, Nandlall told CHEC they failed to satisfy the employer’s requirement, contractor’s proposal and schedules and all works necessary for the stability, safe and proper operation and completion of the whole works.
In accordance with the terms of the underlying contract, Nandlall said CHEC Ltd’s contractual obligation has been to carry out the planning, design and construction of the Extension of the CJIA, which is listed as one of the top priority development projects of Guyana.
The CJIA expansion project – which has now straddled three governments – includes the construction of a new terminal building and the extension of the existing main runway to allow for Code E Aircraft operations at CJIA.
In the correspondence, Nandlall told the Chairman his company failed to remedy all defective items in the entire project, despite being furnished with a notice to effect corrective works.
He further highlighted to the chairman that they failed to complete the whole of the works within the time of completion and further failed to achieve substantial completion as per FIDIC- Plant Design and Build Clause 4.1.
The AG said too that CHEC failed to meet “Contractor’s General Obligations, Clause 5.6: As-built Documents, Clause 5.7: Operational and Maintenance Manuals, Clause 9: Test on Completion, with emphasis on Clause 9.1: Contractor’s Obligations and Clause 9.4: Failure to Pass Tests on Completion.
Government and the contractor have been at loggerheads over the magnitude of project and time frame in which the works were to be completed.
Remedy
Last Monday this newspaper reported Minister of Public Works Juan Edghill saying that after December 31, action will be taken against the contractor if it failed to remedy 72 of 215 identified irregularities.
“To make the redesigned renovated airport practically useable 72 [irregularities] are a must fix now…everything will drop dead on 31st December 2020. After that in keeping with the terms and conditions of the contract the necessary actions will be taken,” the minister asserted.
Edghill had said that for US$150M, the country was expected to receive an airport with eight air bridges, aprons, taxiways and extended runway and other facilities and “that’s what we demand.”
President Irfaan Ali had visited the project site just after taking office and had raised various concerns.
Ali had visited in the presence of China’s Ambassador to Guyana Cui Jianchun. According to a statement from the Office of the President after the visit, Ali had expressed dissatisfaction with the state of the expansion project and said that he would only accept the expansion works as were outlined in the original contract.
“I am holding everyone responsible; the contractor, the consultant, the project management team…this is not acceptable for the Guyanese people. In this current position it is very clear from all that I have seen and heard, and from all the questions asked, it is very clear that something is horribly wrong. The right decision at this moment is that we cannot accept this,” he said.
Sharing the view of the President, Edghill said that they are going to ensure that this country gets what taxpayers are paying for.
The government’s records show a vast variation from the contract with less than half of the agreed 17,000 square metres covered under the original agreement completed, he said.
CHEC, after the statements were made by President Ali, said that it had “paid careful attention to those statements and, on September 29th and 30th, immediately dispatched its Vice President Liu from Beijing and the President of its Americas Division Dr. Zhimin Hu. Since then, CHEC has provided to the Government of Guyana through the Ministers of Public Works and the Office of the President comprehensive updates on the Project, including a revised schedule of works and other outstanding matters as per the present existing contract.”
According to Edghill, the new building constructed by the company is 7,200 square metres. “They rehabilitated 6,800 square metres. Even if you add the two together, you still have 3,250 square metres [more to go]. And that is if you count the rehabilitated as new and it cannot be counted as new,” he stressed.
“Then recently, there were 72 items they were going to fix to make the airport functional, before December 31st [2020]. The 72 items ain’t fixed yet! Then you have an airport, when you approach it, you think it is a warehouse. The whole [exterior] façade in the front there you have to fix… That is supposed to be glass right up to the top,” he declared.
Edghill said that it would be dereliction for government to accept the current airport for the cost agreed to as at the end of the day taxpayers would hold the PPP/C government accountable.
The controversy-ridden project began in January 2013 and has now straddled three governments including five years under the former APNU+AFC administration.
