Chinese gov’t open to review of CHEC contract

– Ambassador says company should be judged on records

By Tiffny Rhodius

The Chinese government will respect Guyana’s decision to review the Cheddi Jagan International Airport expansion project contract, but Ambassador Yu Wenzhe cautioned that the contracting company, China Harbour Engineering Company (CHEC), should be judged on the progressive work it has done in the Caribbean and not the debarment of its parent company.
In an invited comment, Ambassador Yu expressed hope for an amicable decision to be met. “I’d like to respect the decision of the government and the people if they think there is necessity for more information or revisit. I think the company will cooperate; they will provide the necessary new information if there is any and the Chinese government, we will respect the decision of the government and hopefully they can work everything out; they can clear the situation,” Ambassador Yu said.
Former President Bharrat Jagdeo two weeks ago suggested that the Donald Ramotar administration seek explanations from the Chinese government about the conduct of CHEC since it is state owned. CHEC’s parent company, China Communications Construction Company (CCCC) and all its subsidiaries have been debarred by the World Bank from bidding on road and bridge projects funded by the bank for the period 2009 to 2017.
The former president had also urged that President Ramotar review the CJIA contract to ascertain whether Guyana will be getting value for its money, and if there is any illegality in the project. However, Ambassador Yu pointed out that the company is doing a good job in Jamaica and some other Caribbean countries. “So basically we are doing good work in the Caribbean region… and they [CHEC] get the appraisal by the local government and the media and some other circles.”
Ambassador Yu said he understood the request for information and foresees no difficulties in providing the necessary information government requires.
CHEC was awarded a US$138 million contract to build a modern terminal at the CJIA and extend the runway under the Jagdeo administration. But concerns started growing both regionally and locally about the credibility of CHEC, given the blacklisting of its parent company. In the latter part of May, the Office of the Contractor General (OCG) of Jamaica raised its concerns about the debarment.  It said that CHEC is a major subsidiary of CCCC, and one of the two entities that is currently listed by CCCC as its “overseas business”, and as such, the debarment automatically extends to CHEC. In August 2009, CHEC was awarded a US$400 million contract, on a sole-source basis, by the government, to execute its Jamaica Development Infrastructure Programme.
No hard evidence

Locally, concerns have been raised as well about the CJIA project and the calls for a revisit of the contract by the former president seemed to have validated those concerns. But the Chinese Ambassador cautioned, “There is not enough hard evidence for the decision, this is my understanding of the situation.”
CCCC had inherited state-owned China Road and Bridge Corporation (CRBC) in 2005 along with the blacklist from the World Bank. The debarment was incurred by the then CRBC in 2002 when it was invited by the government of the Philippines to bid for a World Bank-funded road project. The project was abolished by the Philippine government in 2006, as a result of disputes between that government and the World Bank.
The World Bank and subsequent newspaper articles alleged that CRBC was engaged in collusive practices in relation to the road project in the Philippines. According to the announcement, the World Bank decided to impose debarment of seven firms (including three Chinese companies) and one individual for the alleged matter. CRBC received no claim or allegation from the Philippine government, and maintained that since January 2009, the World Bank’s allegation against the corporation has no factual or legal merit. CCCC initiated discussions with the World Bank to arrive at a resolution of the issue.
CHEC has since denied any involvement in any activity that has attracted any sanction by the World Bank. “CHEC itself has never been under any investigation by the World Bank,”