Terminate lopsided CHEC Suriname stone import contract – former AFC economist

Public Infrastructure Minister David Patterson is on record saying that China Harbour Engineering Corporation (CHEC) – the contractor for the US0 million Cheddi Jagan International Airport (CJIA) Expansion Project – has begun importing stones from Suriname because of price and capacity constraints, but his former colleague is calling for the lopsided contract for inferior stones to be squashed and re-tendered.

Former Alliance For Change (AFC) economist Sasenarine Singh made his position known in a recent public missive.

Patterson, who through his spokesperson, according to Singh, said the Surinamese are prepared to supply and deliver the stone landed at the Timehri docks at US$28 per tonne, compared to the local quotes which were around US$36 per tonne at Georgetown.

“But one of the suppliers hit back by saying our Guyanese quarry products are of a superior quality and they were prepared to adjust the prices downwards based on the volume… Even if they had to cut their profits, every one of the Guyanese quarries would have done the right thing for Guyana.”

Price cap

As such, Singh has since called for the lopsided contract for inferior stones to “be squashed and re-tendered with a geographic clause inserted along with a price cap of US$30 for the better quality Guyanese stones”.

He noted that at least one local stone supplier said, based on volume, it could reduce its prices significantly and may even match the price of the Surinamese supplier, “so why not give the locals a chance to put up?”

Singh noted too that Head of State, President David Granger “talks about national pride all the time… Isn’t it President Granger who spoke about let us cooperate for Guyana? This tender seems not to be following the President’s wishes.”

The former AFC economist recalled too that when large national projects, like the Linden-Soesdyke  Highway, were being implemented under the then Prime Minister Forbes Burnham, he always ensured that the “locals shone”.

“So what is really wrong with the PNC these days… where is that economic nationalism from the Burnham era?” he questioned.

According to Singh, being frugal does not mean saving money, “so we may be having these stones cheap now, but it could cost us multiples in the long run with lost jobs in the economy and direct stagnation in the quarrying sector”.

Inferior stones

The former AFC economist is of the view that “we are not being economically efficient by sourcing inferior stones from a foreign country when we have world-class stones at home”.

This publication recently reported on Guyana Manufacturing and Services Association (GMSA) President Eon Caesar calling on Government to do more to ensure that there was greater protection or consideration for local content when it comes to the implementation of foreign-funded, or foreign-executed contracts.

At least two local stone suppliers have lodged complaints with regard to the news that a Suriname-based quarrying company had been awarded a mega contract to supply stones for the local project.

CHEC recently inked a US$7.5 million contract with Suriname’s State-owned mining company Grassalco, to supply some 300,000 tonnes of crushed stone to be imported over a 12-month period for the CJIA Expansion Project.

Caesar at the time had told  Guyana Times that while CHEC was a private company that would have to make its own decisions with regard to completing its project within its timeframe and specifications, the project was being funded by taxpayers’ dollars and as such, it was imperative Government do more to protect local content.

Speaking on the complaint lodged by the local suppliers, Caesar said that even if it was a case that one of the companies could not meet the demand in terms of the amount of stones requested, at least both companies together could have met the quota.

“Even if one could not supply all, both could have fulfilled the order,” Caesar said.

According to international reports, Suriname’s Grassalco and Zhong Da International Engineering Company will deliver the material in partnership to CHEC in Guyana.

The contracts were reportedly signed by Grassalco’s Chief Executive Officer, Sergio Akiemboto; Zhong Da International Engineering Company General Manager Wu Qiong; and CHEC Project Manager Sun Wei.

The Guyana CHEC contract is reportedly the largest contract the State-owned company has signed with a foreign contractor.

Local content

The matter of the protection of local content was recently catapulted into the limelight during the construction of the US$58 million Marriott Hotel, as Guyanese labour and supplies were largely ignored by the Chinese contractor.

The matter was raised again by representatives of the local Private Sector Commission (PSC) following the discovery of oil offshore Guyana by ExxonMobil.

Local content has come to be known as the quantum/percentage of locally produced materials, personnel, financing, goods and services rendered and which can be measured in monetary terms.

The matter of local content was also raised recently in the media by Presidential Adviser Eric Phillips, who had called for the necessary legislation to be put in place.

Phillips said if managed strategically and if good governance became the norm in Government and the Private Sector, exponential growth in Guyana’s economy was a real possibility with the discovery of oil.

Phillips at the time had called for a Local Content Bill, which he argued was “an absolute necessity at this time during the early days of oil exploration… Exxon and other multinational entities who occupy the value chain of oil production and associated industries, should know from day one, that Guyanese must be involved in the initial spend to produce oil and later as oil is produced”.