Govt engaging new bidder for Demerara River bridge

…as negotiations with previous bidder collapse over financing costs

It has been revealed that the Government is engaging the second responsive bidder, a Chinese consortium, to construct the new Demerara River bridge. This comes after negotiations with the first preferred bidder, China State Construction Engineering Corporation Ltd, fell through.

Vice President Bharrat Jagdeo recently disclosed that negotiations with China State Construction Engineering Corporation Ltd to construct the Demerara River bridge did not progress. During his interview with VICE News, Jagdeo revealed that the cost of financing was too high with the first company.
“We went to open public tender. Companies from around the world, they bid. And in the final bid they had the lowest price bid. So, they had the lowest bid. So, we did open public tender and companies form all around the world, from Europe etcetera, they all bid,” the Vice President said.
“On the bridge, you mentioned the bridge. The number one ranked company, we said we’d start the negotiations with the number one ranked company, the Chinese company. We’ve just terminated the negotiations with them, because the cost of financing is too high. And that has just happened and we’ve now moved to the second ranked company,” Jagdeo explained.
Jagdeo made it clear that the intention of the Government is to bring the cost of financing down, hence they have moved on to the second responsive bidder. The second responsive bidder is a Chinese consortium comprising of China Railway Construction International and China Railway Caribbean Company Limited and the China Railway Construction Engineering Group, which had submitted a bid of US$260.8 million.
Public Works Minister Juan Edghill meanwhile also disclosed the change in negotiations during the consideration of the budget estimates for the Public Works Ministry on Tuesday, following questions on the status of the project. He too cited financing costs.
“Currently we are negotiating with the second ranked responsive bidder. Because negotiations are ongoing, disclosures on this matter would be very concerned and I will be very restrictive in what I say. But I can tell you negotiations are ongoing and the next meeting is tomorrow morning,” the Minister said.
Edghill also fielded questions on why $21 billion was budgeted for the project if the request for proposals includes the preferred bidder financing the project. In response, Edghill explained that the People’s Progressive Party/Civic (PPP/C) Government remains committed to delivering the four-lane high span Demerara River bridge as promised to the people of Guyana. He explained that while the bids include the companies financing the bridge, the budgetary allocation is to undertake preparatory works.
“The Government of Guyana has provided this sum to ensure that all the necessary things that need to be done when we engage the preferred bidder, our contribution to get that project kickstarted and for it to be built in two years, we are getting that done now.”
“This $21 billion that the Honourable Member is asking about, I want to assure him and all the people of Guyana, it is to ensure at all cost we get the bridge, we get the best price and that the interest of Guyana is served when we finalise a contract with whoever will be doing the construction of this bridge,” Edghill said.
Last year, Cabinet had granted its no-objection for China State Construction Engineering Corporation Ltd to construct the bridge at a proposed cost of US$256.6 million. The contract was awarded based on a Design-Build-Finance (DBF) model with financial terms and conditions which would be no less favourable than those submitted in the preferred bidder’s price proposals. The proposed construction cost by China State Construction was in fact the lowest amongst all bidders.
Initially, the Government had pre-qualified nine firms to submit bids for the construction of a two-lane dual carriageway (4 lanes) hybrid cable-stayed centre span bridge with concrete box/T beam girder approach bridge structure.
The pre-qualified firms were invited to submit bids to construct the bridge using a Design-Build-Finance (D-B-F) contract and Design-Build-Finance-Operate-Maintain (D-B-F-O-M) contract.
At the pre-bid meeting, held on June 28, 2021, it was agreed that the closing date for submission of bids would be October 5, 2021. Only five of the pre-qualified bidders submitted bids, of which four obtained the required minimum score for the technical proposal. (G3)