Elections, Covid-19 pandemic delay completion of CJIA project

Dear Editors,
China Harbour Engineering Company wishes to offer the following clarifications and accurate facts about the Airport Expansion Project (AEP) of the CJIA:

The contract for the AEP, which was signed on November 11, 2011, for US138M between the Government of the Cooperative Republic of Guyana (hereinafter referred to as the Employer) and China Harbour Engineering Company (hereinafter referred to as the Contractor), had a specific Scope of Works to be included in the Price and officially started on January 16, 2013.

The contract established that the Contractor’s submission of the Price had certain conditions; importantly, it excluded the Handling Equipment and the Removal of the existing Terminal, among other things, and specifically established the Employer’s responsibility to supply the equipment for eight bridges and other handling equipment.

Geotechnical investigations of the specified location revealed unforeseen conditions compared to the original data provided to the contractor. After discussions, both parties reached an agreement that the original contract plan could not be implemented. The Employer then instructed the Contractor to provide alternatives.

In 2013, the Contractor provided several options, each of which included an increase in the sizes of the apron and taxiway areas with the relevant cost due to the variation to the Employer and in January 2015, the Employer informed the Contractor that it had chosen one of the alternative proposals submitted.

Note: During the period January 2013 to May 2015, budget allocations for the Project were not approved by Parliament, which prevented the Contractor from executing the works as planned.

5) Works restarted on the Project in May 2015 but were halted when the new Administration requested a review of the Project and notified the Contractor to suspend construction during the review period.

After the review period ended, both parties agreed to the revised terms, which considered the Government’s budget, changes, and claims to the Project prior to 2015. It also included an adjustment to the scope of work to adapt to the total contract value. Both Parties signed a Variation of the Contract Agreement in October 2015.

The revised scope of work replaced the new terminal building, parking aprons, and eight boarding bridges – to be supplied by the Government of Guyana-  with a renovation of and new construction area in the existing terminal building, parking aprons and four boarding bridges, two of which were to be supplied by the Contractor and the two by the Employer.

Note: Due to the General and Regional Elections held in Guyana in 2015 and the contract variations that arose after, China’s Exim Bank, because of the risks involved, stopped disbursements on the loan. From January 2013 to the early months of 2016, CHEC funded the execution and construction of the Project from its financial resources.

In January 2016, the preliminary plan for redesigning the terminal building was agreed upon between the parties. The renovation of the original building and the construction of the new terminal building began.  However, the Employer could not provide the original terminal building’s as-built drawings to the Contractor and this impacted the execution of the redesign. The Employer at the same time instructed that the construction works could not affect the airport service and operation. This development severely impacted the work scheme and project implementation schedule.

By the end of 2019, the Project was 97 percent complete. But the General and Regional Elections of 2020, coupled with the global pandemic, forced CHEC to significantly reduce its workforce, which again affected the Project’s completion.

Following the declaration of the Elections, the new Government of Guyana through the Ministers of Public Works and HE President Irfaan Ali visited the project site and made several public observations and statements. CHEC has 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.

CHEC wishes to take the opportunity to clarify that its commitments to the Employer are to comply with the request under the current contract signed between the parties. Presently, CHEC is engaged in discussions with the Employer and is fully cooperating with the government to seek the delivery of the Project according to its contractual obligations.

It is our hope that the comprehensive synopsis provided here will bring clarity about the Project so that future reports can be accurate in its interpretation of the scope of the Project.

CHEC remains a friend to the Government and People of the Cooperative Republic of Guyana, and a ready partner of competent support to Guyana’s infrastructure trajectory.

Regards
China Harbour Engineering Company