BK International Inc.

We will not be bullied – Minister Benn

KINGSTON - The country’s Public Works Minister will not condone any company who has a vested interest in bullying and controlling the Government and its people.

“We don’t have any interest in that. We will fight against that, we will make sure that viable good quality product is supplied to the nation,” declared Robeson Benn, at a press conference at his office on Friday, September 13.

He was addressing the stone shortage, which is being refuted by the largest quarry operator in Guyana – BK International.

Hon. Benn told reporters that there has been a shortage over the past two years, and that BK fell short by 40 percent in its delivery, hence the need to import stones to offset the demand.

Volcanic islands St. Lucia, St. Vincent and Dominica are the islands that provide Guyana with the bulk of stones, which Minister Benn deemed “satisfactory”. 

“The stones that being imported by the contractors, aggregate producers and others are sedimentary rocks. They are clean and satisfactory…so the attempt to smear the producers is a pretty insidious one,” Minister Benn charged.

The Public Works Ministry, going forward is pushing for “a competitive sustainable source of supply of good quality stones” for purposes of national projects, businesses and private home builders.

“There is no other interest. We believe that a viable price for stone should between $6,500 and $7,500 at this moment. That is what our numbers say from our last run. We are not going to be dealing beyond this discussion with wild misinformed discussions made in the media …presentations by people who have a perverse vested interest in bullying and controlling the Government and the people we don’t have any interest in that. And if it means that for on time good quality delivery of the product has to be facilitated by the importation of stones, well so be it,” the Minister candidly pronounced. 

Works Ministry: There is a stone shortage in Guyana

KINGSTON - We read with great concern BK International Inc. contention that there is no shortfall of stone supplies in Guyana as reported in various sections of the media on September 10, 2013. 

There is a shortage of domestically produced stone in Guyana and the government has been advised by the Ministry of Public Works to give consideration to the continued and increased importation of stone for the following reasons:

1. Over the past few years, the quarries have not been producing adequate amounts of stone to satisfy the domestic markets needs.  Contractors have repeatedly complained that some quarry products were being rationed by the suppliers.  This high demand chasing very low supply has led to an unhealthy situation of price escalation and poor time performance by contractors.
2. Contractors and concrete aggregate producers have gone the extra mile to import stone from overseas to mitigate against the domestic shortfall.
3. Recently, officials from the Ministry of Public Works conducted a flyover of the quarries located on the Essequibo and Mazaruni Rivers and observed very little activity and few stockpiles of aggregates on site. 
4. The quality of crusher run being supplied by a particular quarry operator, has repeatedly failed sieve analysis tests conducted by the Ministry of Public Works laboratory and is considered unsuitable as a road base material for which was being sold and has been rejected.  These tests identified the scalping out of the mid size range of aggregates leaving an ‘off spec’ product with too much fines for crusher run.

Contrary to what was reported to the media by BK International Inc., official data from GGMC and field reports from Engineers, Consultants and Contractors all concluded that there is a significant deficit in the supply chain for coarse aggregates in Guyana. 

In May 2013, the Ministry of Public Works carried out a comprehensive review of the demand and supply for coarse aggregates in Guyana for the year 2012.  This was prompted by the many reports of project delays associated with the inadequate and untimely supply of coarse aggregates in the local supply chain.  The Review utilized data and information provided by the Guyana Geology and Mines Commission (GGMC), the Bureau of Statistics, Ministry of Housing and Water, Ministry of Local Government & Regional Development and the Ministry of Public Works.  Upon request, data was also received from some suppliers of Quarry products in Guyana.

According to information obtained from GGMC for the year 2012, the total declaration of quarry products from the 5 licensed quarry operators in Guyana amounted to 483, 859 tons (See breakdown in Table 1 below). Of the declared amounts, 277,103 tons (57%) originated from BK Quarries Inc, the largest of the local suppliers.  From these official figures BK Quarries Inc average monthly production for 2012 was approximately 23,000 tons.

The average monthly demand for aggregates in 2012 was about 140,000 tons for housing and public projects such as roads, sea and river defence projects as shown in Table 2 below.

An example to consider is the Sea Defence Works.  Under the 9th EDF for 2012, a total of 418,762 tons of boulders were required to adequately complete the work program for that year.  During that same period the total supplied quantity of boulders was 129,622 tons resulting in an overall deficit of about 70%.

The same could be said for road and concrete structural works as well. In 2012, the demand for ¾ inch aggregates was approximately 819,258 tons while the amount produced by the quarries was less than 10% (63,622 tons) of which 32,842 tons was produced by BK Quarries Inc.

The data speaks for itself and leads to conclusion that inadequate supply of stone on the domestic market can be partially blamed for the delays in the delivery of infrastructure projects and the high prices demanded by the few suppliers. 

If this situation is not addressed now, the price for aggregates continue to increase unabated and the supply deficit will also increase. Important projects such as the expansion of the CJIA, Rehabilitation: of the West Coast Demerara Road, East Coast Demerara Road, Sheriff- Mandela roadway,amongst others being implemented as well as private construction and new housing development will be stymied.

The conclusion and action resulting has already seen the importation of stone so as to mitigate against the continuing negative effects of a supply shortfall.

Table1-Summaryof QuarryproductsdeclaredPeriodof 2012(Source: GuyanaGeologyandMines Commission(GGMC)

Table 2 – 2012 Demand for Coarse Aggregates for infrastructural projectsin Guyana