Opposition Leader, Bharrat Jagdeo on Wednesday raised a range of concerns about the proposed construction of a new Demerara Harbour Bridge, saying government is yet to provide details about financing of the project.
Jagdeo warned government against going ahead with the project which would turn out to be more expensive than the upgrade of the Cheddi Jagan International Airport and the construction of the Skeldon Sugar Factory. “If we go ahead with this project, it will be a corrupt project and it will saddle us with debt long into the future,” he said.
He told a news conference that the construction of the bridge itself at the new location- Houston to Versailles- would cost US$150 million, and already the consultancy company is raising critical questions about where the money would come from.
He said the consultants have stated that commercial investors are unlikely to be found because they seek value creation plus exiting within 10 years, and the company performs well against costs rather than profits or risk margin. Jagdeo said the consultants pointed to the need for subsidy on toll, guarantee on minimum toll revenue, a guarantee on debt service or an upfront subsidy or a grant-to-loan financing or overseas development assistance.
Minister of Public Infrastructure, David Patterson did not immediately respond to a several questions posed to him and instead questioned where Demerara Waves Online News obtained a section of a document titled “Feasibility Study and Design for the new Demerara River Crossing- public stakeholder consultations” by LienvenseCSO Consultants that states, among other things, that “there seems to be room for both toll tariffs to be increased but affordable toll will never cover for debt service>>> government support is required.”
With the likelihood of the company likely to make a substantial loss for 15 years, he said the consultants advised government to decide the extent of its involvement, funding structure, financing cost and the extent of toll increased. “We are not hearing the government on any of these things,” he said.
Jagdeo said his opposition People’s Progressive Party (PPP) has not seen the pre-feasibility study or Environmental Impact Assessment (EIA).
Unlike the US$40 million Berbice River Bridge, which was funded through bonds, subordinate debt, preference shares and some common shares at different rates of return, he said so far government has not released those financing details.