Opposition says Govt’s subsidy plan a recipe for bankruptcy

New Demerara River bridge

The political Opposition is in support of a new bridge across the Demerara River. However, the party has insisted that it will not support a bridge that is mired in corruption, is already slated to exceed the Berbice Bridge in cost, and is financially unsustainable.

Demanding answers on some of the project’s more shady details, the People’s Progressive Party, in a statement on Saturday, questioned the financial structure of the bridge and the relationship between a businessman and the Government’s choice of the location for the bridge.
According to the PPP, the public will note that the Government has been unable to explain how and why the bridge terminates upon land owned by APNU financier Stanley Ming; and that this bridge is estimated to cost US$170 million, which is three times more than the Berbice River Bridge.
The Berbice Bridge, which was opened in 2008, cost some US$40 million to build. According to the party, that bridge did not cost the Government anything in subsidies. Moreover, the party noted that the rates charged at the Berbice Bridge were comparable to the cost of using a ferry. It contrasted this with the new Demerara Bridge proposal.
“No sources of finance have been identified, and the Government is committed to subsidising this bridge at unsustainable levels. For example, according to the Government feasibility study, if the 2017 toll rates are to be increased by 100 per cent, it will still attract a subsidy of over US$140 million over the first 12 years. That is over Gy$28 billion, which is equivalent to approximately Gy$2.3 billion per year,” the party said on Saturday.
“We take this opportunity to draw attention to two bridges constructed in neighbouring Suriname by a previous Government under arrangements that were financially unsustainable. The strain that this had put on the Treasury of that country catapulted its economy into chaos.”
The site
Public Infrastructure Minister David Patterson had claimed that the previous Government itself had identified and touted the Houston-to-Versailles site in its pre-feasibility study. However, the PPP has denied this, noting that the study had identified three possible locations, and had offered opinions on each.
“In terms of the location of the bridge, what the PPP/C administration did was a pre-feasibility study, and not a feasibility study. This pre-feasibility study dealt only with possible locations and the different types of bridge suitable for each (site). It did not treat with detailed costs and other variables. It identified three possible locations for the bridge: Hope–Patentia, alongside the current bridge, and Houston–Versailles. By no means was a conclusive decision taken by the PPP/C Government on any model or any location for the bridge.”
Questions
The party went on to question what would be the cost for Government to acquire lands at Houston and Versailles. It also queried why the Ministry of Public Infrastructure had announced acquisition of lands only at Houston, but not Versailles.
“With this new structure, what would be the cost of tolls for commuters and for commercial transporters?” the PPP questioned. “Since the feasibility study indicated that increase of tolls will be inadequate to finance this project, what would be the level of Government subsidy/financing?” the PPP wanted to know.
“What is the financing model for this bridge? Would it be a public/private partnership (PPP) or the Build, Own, Operate and Transfer (BOOT) model?
“Would the selected contractor be responsible for financing and building the bridge, as well as other infrastructure to accommodate usage of the bridge; or would it be two separate awards?”
Noting that Government has not shared copies of any social impact assessment or environmental impact assessment into the proposed bridge, the PPP has demanded that the responsible minister inform the nation how this site would affect businesses in the vicinity of both sides of the proposed location.
“Since, within a specific distance determined by international standards, mooring of vessels are restricted for safety purposes in the vicinity of this bridge, how will this impact the publicly announced on-shore oil-and-gas facility; investments made by Muneshwer’s Limited at Houston; and other existing fishing establishments, fuel terminals, and other wharves that service ocean-going vessels?” the party also questioned.
“As it relates to traffic flow and congestion, is there a network of roads that was considered? And how does the proposed Ogle-to-Diamond bypass road fit into this scheme?” the PPP also questioned.