THE PIPER: Outsourcing jobs?

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The news that a Surinamese company, Rudisa, has been awarded a contract to supply fruit juices to the national school feeding programme instead of a local company, DDL, which had the contract, is troubling.
In tandem with the announcement that the company contracted to extend the Cheddi Jagan International Airport (CJIA)  is importing stones from Suriname, when local quarries have more than adequate supplies, questions have to be asked as to whether who is in charge of our stagnant economy that is saddled with a high double digit unemployment rate.
piper1DDL has already written the recently constituted  “Bid Protest Committee” (BPC) and will be issuing a public statement once that supposed recourse has been explored. The BPC is mandated to issue its statement within fifteen days of receipt of a protest. There are several peculiar elements to the Juice contract. Firstly the Surinamese bid is one-quarter higher than DDL’s – $545.2M vs $436.8M for the same quantity of boxed juices. While it is alleged in the press that “concerns” were raised about DDL’s “performance” in the past, and that the fruit content of their juice did not meet a required 25%, according to the DDL, these were never conveyed to them even at this time.
 In the case of the stones, the Suriname Government-owned company Grassalco has been awarded a contract for 300,000 tonnes of crushed granite by Zhong Da International Engineering Company, to deliver the material to its  customer China Harbour Engineering Company (CHEC), the contractor that was awarded the US$150M CJIA contract in Guyana. One supplier of stones to the airport project, a subsidiary of the venerable Guyanese company  Toolsie Persaud and Sons, has claimed it was bypassed even though it has stock on hand and in the pipelines to satisfy the one-year contract.
That China provided financing for the CJIA expansion is immaterial: this is a project of the Guyana Government and the loan will have to be repaid from the taxes of Guyanese. In every other country in the world, Governments routinely insist on “local”‘content when available, for the simple reason that the externalities have a positive ripple effect on the local economy. In the case of Toolsie Persaud Quarries, for instance, 95 tax-paying Guyanese are employed and the company recently made a $400M investment in its operations, most likely in expectation of business from the mega CJIA project.
In the absence of the long-promised Procurement Commission, the juice contract received a “no-objection” sign off from the Cabinet. As with the Albuoystown bottom-warehouse fiasco, the question arises at the quality of briefing the Cabinet receives from its bureaucrats. In the case of the stones, all the Minister of Business could say was there “might” have been some previous “delays” by the Guyanese supplier. While Guyanese will have to await the response by the BPC, to a sceptical Guyanese public that has been burnt by a series of Ministerial overreach  recently, there are fears raised that there might be more in the mortar than the pestle the bidding process.
 While one may allow that a government, like any other spender of funds, must demand “bang for its bucks”, it is difficult to understand why in such a small country like Guyana there were no attempts from the government agencies or departments involved, to ascertain the facts about why local companies were replaced on government project.
After all, one of the major reasons for governmental spending is to stimulate its economy – not that of other countries.

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