The Kaieteur newspaper is taking readers for fools with its reporting on the issues with the Cheddi Jagan International Airport. All reports seek to place blame for issues with the construction contract in equal portions on the APNU/AFC and PPP/C. This is disingenuous reporting and should not be practised by a news outfit that touts itself as unbiased.
The PPP/C negotiated a fixed price contract on the airport expansion project. For the enlightenment of all concerned, here is the definition of a ‘fixed price contract’: A contract that provides for a price which normally is not subject to any adjustment unless certain provisions (such as contract change, economic pricing, or defective pricing) are included in the agreement. These contracts are negotiated usually where reasonably definite specifications are available, and costs can be estimated with reasonable accuracy. A fixed price contract places a minimum administrative burden on the contracting parties but subjects the contractor to the maximum risk with CJIA’s contract arising from full responsibility for all cost escalations. These facts seem missed on the reporters at Kaieteur News.
Therefore, the ‘claims’ by Kaieteur News that they ‘found’ overpriced items in the contract list are of no real value once the contractor delivered the original project at the agreed price. Now we have the situation where the APNU/AFC have renegotiated the contract for a smaller sized expansion; from six air-bridges to four and at the same time have increased the ‘fixed price’ by US$30 million and counting.
To simplify, I would like to offer an analogy; A contractor and I sign a $500 ‘fixed price’ contract to build a six-piece living room suite. My brother then takes over dealing with the contractor and ‘negotiates’ with the contractor to build a four-piece suite instead and takes an extra $300 out of my bank account to pay the contractor a total of $800 for a smaller set of chairs than I originally got a fixed price on. I would say it is quite clear my brother is demonstrably incompetent or possibly engaged in corruption to my detriment.
The side issues of when the contractor is paid and what he delivered at what time is wholly irrelevant to the issue at hand and are nothing but distractions and smoke screens for puny minds. Guyana got a smaller, shabby renovated airport instead of a larger, newer expansion that was negotiated by the PPP/C and for that, the blame must fall squarely on the incompetent and possibly corrupt renegotiation done by the APNU/AFC.