Peter Espeut | Check out highway projects

It seems to work as a strategy to drum up business. It may start as an unsolicited proposal, like with the so-called ‘Parliament Oval’; I have the memorandum of understanding (MOU) for that project dated March 9, 2017 in front of me. The company has deep pockets, and undertook to do the initial design work at their own expense without the Government paying one cent up front [see Section 3.1(i)]. There was no contract, so no tendering process was necessary.

Later, the MOU states, when the design drawings are submitted to the Government, and approved, their initial costs will be recovered by including them in the project budget at that point [Section 6.3]. “In the event that the project is aborted” they will be reimbursed for any costs they have incurred “based on the actual work performed”. They can’t lose!

Oh, I forgot: Section 8.1 states that “It is hereby agreed that the parties will refrain from directly negotiating with any third party in relation to the subject matter of this MOU.”

Of course, there will be no tendering for project implementation, as the Government will correctly claim that the company has done all the preparatory work, and it would be unfair to give the actual implementation to someone else. No doubt the project will be designated by the Government as a ‘National Development Project’, thus legalising the avoidance of tendering.

The company we are talking about, of course, is China Harbour Engineering Co Ltd (CHEC), a subsidiary of China Communications Construction Company (CCCC), which, according to the US Department of Defense, is linked to the People’s Liberation Army.

They got a foothold in Jamaica through China-Jamaica government-to-government development aid projects; the government of China provided the financing, and CHEC was allowed to import all its construction equipment and materials free of duty. They also imported from China the labour they needed for the projects. Who could complain? That was a conditionality of the project financing.

Then CHEC began to compete with Jamaican companies by tendering on local construction projects. Their bids could always come out lower than local contractors because – as a start – their equipment costs were lower (Jamaican contractors have to pay duty on imported construction equipment). And then they pay their Chinese workers at Chinese rates; it is alleged that any local workers they employ are not allowed to be unionised, as articulated in the media by the union officials, and are paid below the rates prescribed by the Joint Industrial Council for the Building and Construction Industry.

NOT A LEVEL PLAYING FIELD

Clearly, the Jamaican Government likes to use CHEC on its construction projects; CHEC has built up a reputation for completing projects on time and under budget; the workers perform with military precision.

This is not a level playing field, a requirement for a capitalist market economy.

Now we are in a new phase of the relationship between CHEC and the Jamaican Government. The building of the Montego Bay Perimeter (Bypass) Road was not an unsolicited project initiated by CHEC. No Chinese money is involved; we are told that the project will be fully funded by Jamaican taxpayers, yet CHEC will be awarded the project without a tendering process, and will still use Chinese workers and tradesmen where there are Jamaicans capable of doing the work.

Worldwide, construction projects stimulate the local economy; I don’t know if sending to China the scarce foreign exchange we use to pay CHEC and their Chinese staff will take us out of the COVID-induced economic recession we now find ourselves in.

I hope the Jamaican Government performs thorough due diligence on those firms it does business with. In 2018, Bangladesh banned CHEC after attempted corruption to win a highway tender. In 2009, the World Bank debarred CCCC, CHEC’s parent company, for eight years due to fraud on highway projects in the Philippines. In that same year, CHEC allegedly transferred $19 million to Teodorin Obiang, son of the president of Equatorial Guinea, according to a 2013 US asset-forfeiture case. In 2020, CCCC and several of its subsidiaries were blacklisted by the US Department of Commerce as one of the “Communist Chinese military companies” operating directly or indirectly in the United States.

I wish we had the sort of local and international anti-corruption watchdogs operating in Jamaica that could give the dealings between Jamaican politicians and CHEC a clean bill of health. I would sleep so much better at nights.

Peter Espeut is a sociologist and a development scientist. Send feedback to columns@gleanerjm.com