Intended builder of Amaila project being probed in China for shoddy railway work

(Trinidad Guardian) China Railway Construction Caribbean Company, the contractor selected by the Chinese government to build the Arima Hospital at a proposed cost of TT$1.6 billion (and also the now stalled Amaila Hydropower Project), has been named as one of five Chinese enterprises ordered to investigate shoddy work in the construction of railway projects.

The South China Morning Post reported yesterday that regulatory authorities in China had ordered China Railway Construction Corporation and four other state-owned enterprises to fix structural problems on 12 rail lines, including the Ningbo-Taizhou-Wenzhou high-speed railway, where a deadly high-speed train crash occurred in July last year.

The firms have also been temporarily banned from bidding on further railway contracts, the Post reported. China’s state-owned Assets Supervision and Administration Commission (Sasac) ordered the five companies to report “whether there were any illegal or anti-competitive practices in their railway projects.” Chinese High Commissioner to T&T Huang Xing was not in office on Friday to explain why China Railway was selected to build the Arima hospital when its building practices were under question.

Under government-to-government arrangements, the foreign government is allowed the opportunity of selecting a contractor for the host country. An official from the Chinese Political Office at the Chinese Embassy said he would investigate on what grounds the company was selected before commenting. The company had put in two bids for the project in 2009 and 2012 but on both occasions Udecott aborted the process because all the bids received were too costly.

In an interview, president of the Local Content Chamber Lennox Sirjusingh said he was deeply disturbed that foreign contractors were being selected to build the Arima Hospital. “This is the third hospital being built by foreign contractors. It is disturbing that large sums of money are to be paid to foreigners and yet not a single child from our universities will have the opportunity to design a ward or a driveway or a building of that hospital,” Sirjusingh said. He said the Government was ignoring local content.

During a meeting last week Wednesday, Sirjusingh raised the question of the continuing government-to-government arrangements with Udecott chairman Jearlean John. “I said we were hoping that the Arima Hospital will not be under the same conditions. Jearlean never mentioned a word that a foreign contractor will be chosen,” Sirjusingh said.

“My chamber and contractors will have to revert to burning tyres to get our point across. It is getting out of hand. The only place that local people are involved is the little extension they are doing in the San Fernando General Hospital.” He said discussions will be held with the Joint Consultative Council (JCC) and various chambers to discuss whether legal action could be filed to stop any government-to-government arrangements.

President of the JCC Afra Raymond has also raised concerns about government-to-government arrangements, saying they were  detrimental to the economy. A source who requested anonymity claimed when tenders were advertised for the Arima Hospital, China Railway Construction put forward the highest bid of $1.6 billion, while two other contractors bid $1.4 billion and $850 million. “It is strange that China Railway, which had the highest bid, got the nod,” the source added. Udecott has denied those claims.

Housing Minister Dr Roodal Moonilal could not be reached for comment yesterday, as calls to his cellular phone went unanswered. Last week, Arima MP Rodger Samuel announced that Cabinet had agreed that Udecott would execute a Memorandum of Understanding with China Railway for construction of the new hospital. He said the same company was also contracted by the PNM administration to complete the Scarborough Hospital, Tobago several years ago.

Samuel said the agreement resulted from bilateral talks Prime Minister Kamla Persad-Bissessar held with Chinese President Xi Jinping during his June visit. Trade Minister Vasant Bharath also said China Railway Ltd was also among four Chinese companies in the running for construction of six new business parks to be done with Chinese loan-financing assistance.

The new parks, scheduled to be completed by December 2014, will be at locations including Reform, Connector Road, Dow Village, Frederick Settlement, Preysal and will utilise 775 acres.

More on CRCC

China Railway Construction is one of the largest construction companies in China and one of the top 500 enterprises in the world. Although it specialises in railway infrastructure construction, the company also has operations in surveying, design, and consulting; manufacturing of road maintenance machinery; and real estate development and logistics services related to its main construction business.

In addition to railway systems, the state-owned corporation works on highways, airports, marine ports, hydropower and water conservancy facilities, industrial plants, and municipal projects both at home and abroad.

Question marks over CRCC

In April, former Chinese railway minister Liu Zhijun was charged with corruption and abuse of power. The Bloomsberg newsletter said Liu presided over the ministry at a time when millions of yuan were wasted or stolen.

“In one case, at least 187 million yuan was misappropriated by individuals or companies involved in building the high-speed rail line from Beijing to Shanghai, the National Audit Office reported in March 2011. The auditor, which also investigated the railway from June to September 2011, also found that 491 million yuan was embezzled in land deals tied to the railway project,” the report said.

Udecott doing due diligence review

In an interview, Jearlean John said no contract has yet been signed with China Railway. She said, “There is no contract, no memorandum of understanding and no signing of framework agreement. Nothing is cast in stone. We are now going through the process.” Udecott’s media events manager Roxanne Stapleton-Whyms elaborated on this in an e-mail.

She said given bilateral agreements between the governments of T&T and the People’s Republic of China, which were “further enshrined”  by the recent visit by  Chinese President Xi Jinping, the Chinese government indicated an interest in the China Railway Construction Company building the hospital.

Stapleton-Whyms also said Udecott has since been instructed to do a due diligence review on the China Railway Construction Company and to determine whether it is a viable entity to construct this project.

 

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