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China Harbour pushes for more road contracts

Published:Sunday | July 3, 2011 | 12:00 AM
Zhongdong Tang (centre), general manager, CHEC Latin America, Minister of Transport Mike Henry (left), and Y.P. Seaton (right), managing director, YP Seaton & Associates, in discussion at the Wyndham hotel, New Kingston, last year. They were participating in a training programme for Jamaican engineers as part of the memorandum of understanding signed between the Ministry of Transportation and CHEC. - File
A section of the Mount Rosser main road. With the construction of the highway leg from Spanish Town to Mount Rosser, motorists will have the option of circumventing this dangerous stretch of road.- Ricardo Makyn/Staff Photographer.
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Edmond Campbell, Senior Staff Reporter

CHINA HARBOUR Engineering Company Limited (CHEC) is positioning itself to land another massive contract in Jamaica to construct a new toll road from Spanish Town to Ocho Rios including the Mount Rosser leg of the highway, which is about 88 per cent complete.

The company signed a memorandum of understanding earlier this year with the National Road Operating and Constructing Company (NROCC) to investigate the possibility of implementing a concession agreement, which would see the Chinese firm financing, designing, and constructing the new highway.

China Harbour's interest in constructing the new highway has already sparked debate among a parliamentary group, with Opposition Member of Parliament Phillip Paulwell sounding a note of caution that the project should be open to international tender.

He wants the process to go through the National Contracts Commission and be subject to scrutiny from Contractor General Greg Christie.

At present, the Chinese company is working on the single largest road infrastructure project in Jamaica to construct roads and bridges islandwide. China Harbour is the sole contractor for the J$36 billion Jamaica Development Infrastructure Programme (JDIP), which has been dogged by controversy since its implementation. The contract was facilitated by a loan from the China Ex-Im Bank to the Road Maintenance Fund (RMF).

The Jamaican Government is currently engaged in a contractual arrangement with Bouygues Travaux Publics, the French company which constructed Highway 2000, to build a 19-kilometre four-lane highway spanning Linstead in St Catherine to Moneague in St Ann, which covers the Mount Rosser bypass.

However, Bouygues and the Government are currently trying to resolve a stalemate which arose owing to what has been described as geo-technical problems, which were detected in a 650-metre stretch within zone two of the Mount Rosser bypass.

The original cost for the Mount Rosser bypass was estimated to be US$99.5 million in 2007. However, in 2008, Cabinet approved a variation of approximately 25 per cent, increasing the amount to US$124 million. To date, US$110 million has been spent on the project.

variation order

At a meeting of Parliament's Public Administration and Appropriations Committee (PAAC) in Gordon House, last week, Managing Director of NROCC, Ivan Anderson, said up to 2008, the Jamaican Government bore some amount of risk in relation to the geo-technical flaws.

Anderson, who was invited to attend the committee meeting, told PAAC members that in 2008, the Government signed a variation order which transferred all the risks in relation to the geo-technical issues to Bouygues, the contractor.

He explained that a dispute had arisen between Bouygues and the government where the French company had reportedly said that even though it had the risk for resolving the geo-technical problems, it later found conditions that could not have been anticipated by an experienced contractor.

Anderson said NROCC sought legal advice from the solicitor general and from legal experts overseas, and there was consensus that Bouygues was fully responsible for completing the project.

The NROCC boss also dismissed an earlier pronouncement by a government minister that Bouygues had walked off the job on the Mount Rosser project.

new designs

He told the committee that Bouygues' engineers had just completed new designs for the problem-plagued zone two of Mount Rosser and would submit a report to NROCC in a matter of weeks.

Raising questions about CHEC's proposal to complete section two of the highway, or the Mount Rosser segment, committee member Paulwell argued that Bouygues had already been contracted and paid to carry out the work.

Responding to this concern, the NROCC boss said: "What we anticipate is that at the end of July, Cabinet will look at the various proposals, look at what Bouygues has come up with, look at what China Harbour is coming up with, and make a decision as to how we complete that section of zone two of Mount Rosser."

Discussing possible options that could be considered by Cabinet, Anderson said CHEC could refund the full amount invested in the Mount Rosser segment, and Bouygues could pay China Harbour to complete the section within zone two with geo-technical issues.