Guyana: CJIA expansion project – Editorial by Stabroek News – 06 May 2019

– Stabroek News  – Editorial

Given its inauspicious beginnings in Jamaica and numerous questions over the scope of its works, it is meet that both the government and the opposition have agreed that the US$150m expansion of the Cheddi Jagan International Airport (CJIA), Timehri be audited.

There has been a great deal of grandstanding and excuses by both the former PPP/C government and the current one over its progress and what was intended to be delivered. So febrile has the disputation been that the Office of the Auditor General has since signalled that it will undertake a special audit of the project. Underpinning this will be a value for money audit. 

Cheddi Jagan International Airport – Guyana

Such an audit is absolutely necessary to establish whether this US$138m loan from China was profitably and sensibly spent. While the Auditor General’s Office is the appropriate institution for the purpose of a value audit on this pivotal infrastructural project there is an even more fundamental audit that should be executed.

As much as China  is and will be a major development partner for Guyana in the coming years, the manner in which the airport expansion project was drawn up under the PPP/C administration was utterly disrespectful of normative standards of due diligence, procurement and monitoring and evaluation.

Under the APNU+AFC government, Guyana has signed on to China’s ambitious Belt and Road Initiative, and since more infrastructural projects are likely to be in the works, it is imperative that relations with Beijing be re-balanced particularly in relation to the manner in which loans and development assistance are assigned.

In addition to the value audit, both the government and the opposition should agree to revisit the genesis of this project and to conjointly agree to ensure that there isn’t a recurrence as the poor planning and execution will likely be costly.

It would be remembered that the project was agreed during the visit of a high-ranking official from China to the Caribbean without any rigorous evaluation of the project scope and the contract with the construction company, CHEC was signed in Jamaica on November 11, 2011 without a word to the Guyanese public. There was no evidence of any feasibility, geotechnical or other relevant studies before the clinching of the deal.

In his defence of his government’s conduct in this matter, Minister of Public Infrastructure, David Patterson in a Facebook post of April 22nd had pointed to deficiencies in the beginnings of the project which led to various options being considered including its abandonment.

Mr Patterson charged that at the time of the signing of the contract, no feasibility studies or soil investigations had been done and there were also no site surveys, detailed studies or preliminary reports prepared but a contract sum and general scope of works were nevertheless agreed.

Actual construction works, he said,  did not begin until January 16, 2013 – 15 months after the signing of the contract and the Supervising Consultants (MMM Group Limited in association with CEMCO) did not begin their supervision until July 1, 2014, which meant that CHEC toiled for over 18 months without independent supervision. The contract signed by the then PPP/C Government also allowed for the provision of sand free of cost to the contractor within a 12 km radius of the project and further committed the government to pay US$3.115 per cubic metre for the “exploit and transportation of sand”.

Mr Patterson added that soon after the start of the works in 2013, the soil conditions in the proposed northeast runway were found to be unsuitable, a defect he said that could have been detected if studies had been executed before the signing of the contract. The decision by the PPP/C government to extend the runway in the southwest direction also resulted in additional excavation and sand-filling, he said.

Mr Patterson also said that when it entered office in 2015, the APNU+AFC government was presented with a project that was “badly performing” as almost 35 per cent of the monies had been exhausted and the contractor had claims for over US$44 million, and if successful, the government would have paid US$90 million for less than seven per cent of the actual work.

An assessment of the project was done in 2015 and he said the government was presented with the following options: abandon the project which entailed the risk of losing all the monies paid to the contractor as well as a possible court case; assign additional funds to the project, estimated at approximately US$35 million to make up for the defective preliminary planning and execution; or complete the project within the allocated contract sum.

After deliberations, the Minister said that Cabinet opted for the last option: that the contract sum remain at the same level; the runway be completed to international specifications; the terminal buildings constructed to adequately accommodate the projected passenger increase; and that no residents of Timehri North be unnecessarily removed.

In a response to Minister Patterson, the then PPP/C Minister of Works Robeson Benn had contended that his government entered into a Fixed-Price Contract with CHEC for the expansion of the CJIA. He said that payment was made on the usual 30 per cent mobilisation advance to CHEC, which was bonded. He added that initial delays in project start-up occurred as CHEC sought to extract an increase in the project sum by US$30 million but that their effort was refused based on international contracting rules for Fixed-Price Contracts and the considered view that the increase was not warranted.

Mr Benn also said that by 2015, performance schedules of many national contracts were in difficulty because of budgetary cuts imposed by the then APNU and AFC parliamentary opposition and, according to him, it is now evident that the project seems to have been tremendously modified with the effect of impairing its original intended validity and integrity.

Vital governance issues are at stake here. Were the requisite studies of the airport expansion project available prior to a funding decision? Did the move to accept the Chinese loan violate the country’s sovereign right to make these decisions as part of a process that involved Cabinet? Did the assigning of funding and the selection of CHEC violate the procurement rules of the country? Did the contractor improperly seek to vary the cost of the project? Has Guyana obtained value for money from the project? What penalties are ascribable to CHEC over lengthy delays in the project and have these been imposed?

Given that Guyana has signed on to China’s Belt and Road Initiative, it is imperative that the airport expansion project be rigorously investigated and the lessons learned from it applied to future offers of assistance and projects of this type.

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  • Curtis  On 05/10/2019 at 10:17 am

    This is only one project that was poorly managed under the PPP government. I can only imagine how many more shoddy agreements were made over 22 years and how many palms got greased.

  • wally n  On 05/10/2019 at 11:42 am

    As much as the poor nations need an inflow of money, Chinese, they should realize that the Chinese would not be there unless they have a long term plan/agenda. The only thing that can derail an honest and intelligent contract is greed, not ignorance.
    There are enough competent professionals in all of these countries, in addition, they have access to outside help and consultation to identify the loop holes and land mines they, the Chinese might be trying to “hide”.
    So the conclusion, might rightfully be “GREASY PALMS”

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