After years of controversy encompassing three administrations, the PPP/C government and CHEC have sealed an agreement on the troubled expansion of the Cheddi Jagan International Airport (CJIA), Timehri which will see the Chinese contractor doing US$9m in additional works at its own cost.
The expanded works are to be completed by December 31st 2021. The deal would appear to be a significant win for the government which had warned of legal action against China Harbour and Engineering Company (CHEC) if it didn’t remedy certain defects by December 31st this year. President Irfaan Ali had also visited the US$150m project in September and had expressed dissatisfaction at the state of the project.
It is unclear what prompted the decision by CHEC to undertake the extra US$9m in works when it had originally been seeking more funding from the government to complete the project. Observers have postulated that had the government taken CHEC to court there could have been a significant impact on the future use of Chinese companies in the major forthcoming projects. It is also possible that the Chinese government may have had some influence on the deal. Beijing’s Ambassador here, Cui Jianchun had accompanied Ali on his tour of the airport project.
The statement from the government yesterday said that it had entered into an Agreement with CHEC for additional work by CHEC at CJIA “to the amount of approximately US$9M at the sole cost of China Harbour Engineering Company”.
It said that the new work will involve:
An extension of the Airport’s boarding corridor in order to accommodate two more passenger boarding bridges, equipping the Airport with a total of six boarding bridges capable of servicing aircraft such as the Boeing 777, Dreamliner, the AirBus and similar trans-atlantic aircraft.
· The Terminal Building being extended to provide accommodation for additional commercial space such as food courts and duty-free shops. The extended building will feature a modern airport façade covering the full length of the Departure Terminal.
There had been fruitless discussions between the two sides over the quantum of new work in the project and if it had been delivered by CHEC. Minister of Public Works Juan Edghill had argued that the PPP/C government had contracted in 2011 for a brand new building not a refurbished one.
CHEC has further agreed to rectify and complete all outstanding remedial works within prescribed timelines, the statement said.
The Agreement was signed by the Permanent Secretary, Vladim Persaud, of the Ministry of Public Works on behalf of the Government of Guyana and Liu Keliang, Project Manager for and on behalf of China Harbour Engineering Company Limited.
Unilateral
In a letter sent to the CHEC Chairman Lin Yizhong on December 8th this year, Attorney General Anil Nandlall informed that the government would reject any unilateral demand for additional payment by the company to complete the project.
Edghill had already warned that December 31, 2020 was the “drop dead” date for the Chinese company to comply with outstanding obligations. Work on the project got underway in 2013 and it repeatedly missed deadlines.
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 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.
Ali had visited the airport in the presence of China’s Ambassador to Guyana. 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 after a secret deal in 2011 in Jamaica and has now straddled three governments including five years under the former APNU+AFC administration.
