-contractor to buy US$3.5m in stone from TPL, BK
Following an intervention by government on behalf of local companies, the contractor for the Cheddi Jagan International Airport (CJIA) expansion is to purchase over US$3.5M in stone from Toolsie Persaud Limited and BK International.
This would mean that China Harbour and Engineering Company (CHEC) will source some 95,000 tonnes of aggregate locally and not import from Suriname as it was doing up to last year.
“I am pleased that we will be having local input here into this project,” Minister of Public Infrastructure David Patterson said yesterday at the signing of the agreements, which took place at the CJIA Boardroom at Timehri.
Local quarry suppliers had complained bitterly last year when they learnt that Chinese contractor, CHEC, had purchased US$7.5M worth of stone from Suriname’s Grassalco for the airport project. CHEC would later say that price and capacity were the sole determinants in the purchase after concerns were voiced at the bypassing of local companies.
The Minister of Public Infrastructure yesterday explained that the Suriname supplier had quoted a price of $28 per tonne of stone but locals said that they could not match that figure. Patterson said that the negotiations with Toolsie Persaud, BK Quarries and CHEC yielded a positive outcome as the two sides agreed to a supply price of US$37 per tonne for the 95,000 tonnes. Metallica Commodities Corp is still in negotiations and could possibly see an agreement later down the line.
Asked what caused the contractor to accept a higher price for stone and if government would have influenced the decision in any way through the granting of subsidies, Patterson replied in the negative but said that the contractor realized that in the long haul it was more feasible to source stone here.
The Minister of Public Infrastructure explained: “The cost for the project is two things. You may look at US$37 as higher than US$28, but the contractor looked at, if he doesn’t finish by x amount of time, the consequences are far greater than anything you think you could save by shipping.”
“When they saw what was available and everything like that … they most likely saw it advantageous to them. There is nobody that would sign anything that is not advantageous to them,” he added.
He also informed that during the negotiations “everyone had to give” so that yesterday’s agreements could be reached; a decision that he was personally pleased about.
Patterson said that local suppliers should have adequate time and opportunity to provide the goods but stressed the importance of meeting deadlines and said that delays will lead to severe repercussions. He added that the deadline for the project is November 30 and underlined that this completion date must not be jeopardized.
Following the signing, BK Quarries issued a statement thanking government for its intervention.
“Today it was with much pleasure and humility that we were invited to the signing ceremony, where a contract for the supply of 50,000 tons of Aggregates for the expansion of the Cheddi Jagan International Airport, between BK Quarries Inc. and China Harbour Engineering Company was signed. We wish to express our heartfelt thanks and appreciation to the government of Guyana, particularly Minister of Public Infrastructure, Hon. David Patterson, Minister of Business Hon. Dominic Gaskin, Minister of (Public Telecommunications) Hon. Cathy Hughes and Minister within the Ministry of Public Infrastructure Hon. Annette Ferguson, for their
intervention in having these materials supplied locally, we are and will remain personally indebted to these Ministers,” the statement said.
The company also thanked CHEC for supporting the request by the Government of Guyana, that the materials be procured and supplied locally.
BK assured that “no effort will be spared in ensuring that all of the materials will be of the highest quality and meet the required specifications. “
When it became known that CHEC was sourcing stone from Suriname last year, one supplier had argued that there was no stone shortage here to justify outsourcing. Gaskin had promised to look into the matter to see if negotiations between the two sides could be facilitated and agreement reached for locals to supply stone to the project. Officials of the government then met with the three local suppliers to provide help with getting them involved with the CJIA Project.