China Eximbank provides RMB 825 million government concessional loan for the Cheddi Jagan International Airport Expansion Project

China Eximbank provides RMB 825 million government concessional loan for the Cheddi Jagan International Airport Expansion Project On October 31, 2012, the Chinese Government and the Government of Guyana signed a preferential loan framework agreement for the Cheddi Jagan International Airport Expansion Project.

Then, on November 2, 2012, the Government of Guyana and China Eximbank signed an RMB 825,000,000 government concessional loan (GCL) agreement [CHINA EXIMBANK GCL No. (2012) 32 Total No. (434) No. 1420203052012112030] for the Cheddi Jagan International Airport Expansion Project.

As of December 31, 2020, the loan’s total amount outstanding (including principal and capitalized interest) was RMB 673,698,000.

The proceeds of the GCL were to be used by the borrower to finance 94.2% of the cost of a $138,000,000 commercial contract between Guyana’s Ministry of Public Works and Communications and China Harbour Engineering Company (CHEC) Ltd., which was signed on November 11, 2011.

The purpose of this project was to expand Cheddi Jagan International Airport at Timehri, 40 km from the capital city of Georgetown, and the Ogle Municipal Aerodrome on the East Coast of Demerara. Cheddi Jagan International Airport is Guyana's main airport.

The project involved a 3.3 km extension of the airport runaway to accommodate Boeing 747-sized aircraft, the building of a new construction terminal, the introduction of a departure control system, the installation of a CCTV system with approximately 300 cameras, the installation of passenger boarding bridges, elevators, and escalators, and the acquisition of new equipment.

The existing 7,448 ft long runway was to be extended to 10,800 ft to make it a category Code 4E runway and to enable it to accommodate the Boeing 747-400 aircraft. CHEC was the EPC contractor responsible for implementation. A groundbreaking ceremony for the project took place on March 23, 2013.

Construction of the terminal and runway was originally expected to begin in March 2013 and reach completion 32 months later (December 2015). However, this project encountered various problems and delays. On October 12, 2013, CHEC employees were violently robbed by cutlass-wielding individuals (Source ID: 151254).

Then, in September 2015, the collapse of a pit killed a worker working on the project (Source ID: 151255). The country's political opposition also raised objections about the cost of the project and delayed its implementation.

In January 2015, the then Alliance for Change (AFC) Vice Chairman, Moses Nagamootoo, criticized the project in the media.

It appears the AFC, then-an opposition party, was opposed to the project, supporting its abandonment for a new airport on the West Bank of Demerara at Sandhills. The opposition blocked funding for the project in 2014.

Nagamootoo called the project a ‘fly by night project’, and was accused of misleading the public as to why Guyana used China Eximbank to finance the project. Nagamootoo later that year was sworn in as the new Prime Minister of Guyana. (Source ID: 151253).

As of 2019, the project was still not complete and the Government of Guyana's contract with China Harbour Engineering Company expired on December 31, 2018.

In 2019, Guyana's Auditor General, Deodat Sharma, launched a full value-for-money audit into the Cheddi Jagan International Airport (CJIA) Expansion Project. Significant concerns arose about the project running over budget. As of December 31, 2017, $111.79 million had been spent on the project. However, the total cost of the project eventually escalated to more than $160 million.

As of December 2021, project implementation was still underway and Guyana’s Minister of Public Works, Juan Edghill, promised that the total cost for the project would not exceed $200 million.

During a visit to the project site in September 2020, the country’s former Auditor General, Anand Goolsarran, pointed out that President Irfaan Ali had identified 71 defects that needed to be rectified.

President Irfaan conveyed that the Government of Guyana would only accept completed works based on the original contract entered into in November 2011.

Then, in April 2022, Anand Goolsarran told the media that the Cheddi Jagan International Airport Expansion Project had ‘failed completely’ to deliver in terms of their objectives, outputs, outcomes and impacts, thereby ‘encumbering the Guyana’s public debt […] with little or nothing to show for the expenditure incurred’.

He noted that construction was still ongoing after ten years, with a revised completion date of June 20, 2022.

He argued that project’s underperformance was related to the absence of feasibility and economic visibility studies prior to the issuing of the commercial contract (to determine the precise nature and scope of the works to be undertaken. He also noted that the project had suffered from a lack of effective supervision as the works progressed.

Additionally, he pointed out that the $138 million commercial contract was awarded to CHEC in November 2011 — only ten days before the November 2011 national and regional elections. The project was completed and handed over on June 30, 2022.