Jagdeo demands Govt comes clean on proposed Demerara bridge
…says ‘no coincidence’ coalition financier Stanley Ming stands to reap millions
By Gary Eleazar
Former President Bharrat Jagdeo is calling on Public Infrastructure Minister David Patterson, and the Government at large, to come clean with the Guyanese populace on its bid to bridge the Demerara River, including the financial structure,
level of subsidies, toll increases and likely sovereign debt to be guaranteed.
The former President now Opposition Leader made the demands during a press engagement with members of the local media corps at his Church Street office on Wednesday and further suggested that based on what little information was available, the project already reeked of corruption.
Jagdeo was adamant it was no coincidence that a senior member of the Reform component of the People’s National Congress Reform (PNCR) and financier of the ruling coalition government, Stanley Ming, now stand to benefit from possibly hundreds of millions of dollars.
The Opposition Leader during his media engagement used the occasion to draw
reference to a plan that had been devised by Ming in 2015, which had concluded that the best location for the new bridge was between Versailles and Houston.
Jagdeo surmised that Ming’s suggestion was made without the aid of a feasibility study and juxtaposed his then suggestion, with the recommendation in the feasibility study which ‘miraculously’ chose that location as the best option for the bridge. This despite the conclusion of any environmental and other social impact studies being conducted on the identified alternative locations.
According to the former President, Ming now stands to benefit from huge sums of money, since the land at the Versailles end of the proposed bridge belongs to him and Government will have to pay him to acquire the land.
The former President suggested that based on the recommendations of the project
consultant, Lievense CSO a Dutch consulting and engineering firm in the area of city & environment and water & infrastructure the project will, in fact, be the costliest public infrastructure project.
According to Jagdeo, based on the recommendations of the consultant in addition to the monies that will be required to construct the ‘approach roads network’ and acquire the private property, including those belonging to Ming, coupled with the actual construction of the new bridge, the cost could be as high as US$200 million.
He noted that this would see the construction of the new bridge being even more expensive than the construction of the Skeldon Sugar Factory, completed at a cost of some US$130 million and the expansion of the Cheddi Jagan International Airport (CJIA) at US$150 million.
In his critique of the current approach being pursued by Government in order to construct the bridge, Jagdeo pointed to the shady nature of the ongoing entreats to solicit contractors.
He reminded that Patterson in August had publicly criticised the past Administration for its resort to confidentially clauses a practice Patterson said the coalition Government would move away from.
Jagdeo subsequently drew reference to the secretive nature of the process now being employed by the Administration, as evidenced in its invitation for contractors to be prequalified and the demands being made for parties to sign non-disclosure agreements.
The former President said notwithstanding the public pronouncements and criticisms of the construction of the Berbice River Bridge and the nature of the concessions offered, a plethora of documentation, including the Information Memorandum, for that project was made publicly available.
The Berbice River Bridge was constructed at a cost of US$40 million and according to Jagdeo, this obtained with no debt having to be guaranteed by the State or any subsidies having to be transferred.
Raising several burning questions on the construction of the new bridge across the Demerara River, currently being pursued by the Administration, Jagdeo pointed to the concerns raised by the consultant in its feasibility report a document which has since been pulled from the public domain.
In that report excerpts of which were shared with members of the media by Jagdeo, the Dutch consultant had pointed out that the cash flow from the operations of the bridge would remain in the negative for at least 15 years and that Government would have to subsidise the operations in addition to having increased tolls.
It was found that the commercial markets cannot support the operations of the bridge and, as such, it would require the financial support of Government.
The consultant in its report informed the Guyana Government that the tolls alone would not be enough to cover the operations of the bridge and the costs to even get it in place would be considerable.
The consultant said too that commercial funding parties would require Government’s involvement and further commercial investors were not likely to be found, since they would demand value creation and an exit strategy within 10 years following its opening.
With the project being considered under a Public-Private Partnership model, Jagdeo noted that the consultant has pointed out that Government was being called on to provide a subsidy on tolls, guarantee minimum toll revenues and guarantee debt servicing along with an upfront subsidy or grant to lower the investment amount to be financed privately.
The former President recalled the plethora of critics that were against investing in the Berbice Bridge at the time, saying “we have seen a lot of the financial commentators say it is a bad investment, so if that one (Berbice Bridge) is bad, much less this investment where the cash flow can’t even cover the debt service.”
Jagdeo was adamant “the Government needs to tell us now how much they are going to put into this bridge and where the money is going to come from, how much toll support they will give per year, what will be the level of the subsidy…the extent of the sovereign guarantee for debt contracted on this project.”
He has since challenged the ‘financial commentators and economists’ to analyse the feasibility study conducted and concerns raised, and “see how many unanswered questions are there. We believe that this project requires much more work, the Government still has to answer how these alignments landed in their supporter’s land.”
Jagdeo surmised that Government itself also seemed unaware of how exactly to move forward with the financing of the bridge since it was inviting applications to make proposals.
“This is like advertising for buying mangoes, not a US$200 million bridge,” Jagdeo suggested as he urged the preparation and dissemination of an Information Memorandum for the project that will outline the parameters for bidders, as was done by his administration for the construction of the Berbice River Bridge.
“I anticipate that if we go ahead with this project, it will be a corrupt project it will saddle us with debt long into the future or if not debt, a significant toll increase on the people who use the bridge.”
The Opposition Leader concluded that the Public Infrastructure Minister “needs to come clean on this to the public what would be the level of subsidy if we are giving any.”
He was adamant that the current Administration while in Opposition had railed against the construction of the Berbice Bridge despite the fact that no subsidies were being provided by the State at the time.
“Tell us how much you are going to put into the bridge and where the money is coming from…What the fare increase is, what would be the increase in tolls, how much debt will you guarantee, these are huge questions for a project of this nature.”
Jagdeo’s lamentations were made on the very day this publication highlighted the secretive manner in which the Government was pursuing the project.
Guyana Times, in its report, highlighted that in addition to the non-disclosure agreement, bidders will be forced to waive a number of rights.
These include the right to protest if a bidder believes an unqualified or undeserving contractor was given the nod ahead of everyone else.
The invitation states that bidders waive their right to ownership of all information and designs they provide in the prequalification and bidding period.
Firms also waive the right to any payment or compensation of costs they would have incurred in tendering, no matter the outcome of the process. As if that is not enough, companies can have their bids refused without any reason having to be provided.
According to the Ministry’s invitation to prequalification, “The Employer reserves the right at its sole discretion and without stating any reason, at any time and in any respect, not to award a contract following the tendering, or to terminate the prequalification and/or tender procedure.”