US$106M Ogle-to-Eccles road: Indian contractor must meet 40% local content requirement – Edghill

…as Govt financing over 50% of project

Public Works Minister Juan Edghill has revealed that Indian contractor – Ashoka Buildcon Limited – is contractually obligated to meet a 40 per cent local content requirement in the execution of the US$106 million Ogle to Eccles road link project.

Former Public Infrastructure Minister David Patterson

Edghill was at the time responding to questions posed by Opposition Member of Parliament David Patterson during last week’s consideration of the budget estimates.
Patterson questioned why the project was not disaggregated and offered to local contractors since the Guyana Government is funding more than 50 per cent of its cost.
“…why is it, sir, the project was not disaggregated and allowed for local contractors to bid for the $12 billion which is being funded by the Government of Guyana, as opposed, sir, to allowing companies from India, who are only funding 45 (per cent) to do the entire project,” Patterson quizzed.
But Edghill argued that such reasoning is illogical. “I am extremely baffled by this question…,” the Public Works Minister told the House.

Public Works Minister
Juan Edghill

“The question that the Honourable Member is asking, is not if the Indian Government will give subcontractors from Guyana work. He is asking why Guyana don’t give India 45.76 percentage of the work and the 54.24 percentage must go to Guyanese contractors…it’s the same road, the same culvert, the same bridges and everything. I don’t know what you’re asking for. Somebody gotta be responsible for the executing of the contract and in the executing of this contract, it is a bilateral arrangement through the Line of Credit with the Government of India,” Edghill posited.
“It is the contractor that will be held accountable for the delivery of this road, at a particular price, at a particular timeframe,” the Minister added.
Nevertheless, he noted that the contractor was encouraged to subcontract works to Guyanese and furthermore, that there is a clause in the contract for such.
“The contract caters 40 per cent local content. So, 40 per cent local content is enshrined in the contract,” he noted.
Moreover, the Public Works Minister explained that the current PPP/C Government was forced to finance such a large portion of the project due to the previous APNU/AFC administration’s failure to deliver on the initiative during its five years in office, commencing 2015.
“This was a project that was in the pipeline as of May 2015 when the APNU/AFC took office…they did nothing for five years,” he reminded.
“We came back into Government in August 2020 and one of the first projects that were resuscitated because of its importance was this East Bank-East Coast link. US$50 million was available to the Government of Guyana based upon a Line of Credit that was negotiated since 2015…”
Edghill explained that when the project went out to tender, the lowest bid came in at US$106 million – which is higher than the sums available through the Indian Exim Bank’s Line of Credit.
“That is not a surprise because if you have a Line of Credit with figures from 2014 and you’re issuing a contract in 2020, the cost of materials, the cost of labour, with all that would have happened in the world, prices would have changed.
“So, the Government of Guyana, we are funding 54.24 per cent of the contract, and India, through the Indian Exim Bank is funding 45.76 per cent of the contract,” the Minister posited.
The US$106 million project will see the construction of some 7.8 kilometres of road with each of the four lanes being 3.6 metres wide. The highway will also feature a median in the middle and sidewalks as well as several connector roads, especially at the East Bank end to allow for further diversion of traffic.
The East Coast of Demerara-East Bank of Demerara road link project is being undertaken in several phases with the first being from Ogle to Haags Bosch, Eccles; then onto Diamond and finally, to Timehri, connecting to the Cheddi Jagan International Airport.