Amaila, Marriott, Berbice Bridge financing structure, proposed for new Demerara River Bridge

October 22, 2013, By KNews, Filed Under News, Source

The Guyana Government is gearing to embark on yet another mega project and has opted to use the same debt and equity financial structure utilizing a public private partnership as was the case with the Berbice Bridge, the Georgetown Marriott and the Amaila Falls Hydro Electric Project.

Government is currently inviting ‘expressions of interest’ from “local and foreign parties interested in being a Partner in the design, construction and Financing of the New Demerara River Bridge.”

In the call for partners, Government said that the project will be implemented using a Build Own Operate Transfer (BOOT) model, “in a manner similar to the Berbice Bridge.”

According to the Guyana Government, the responses received from the call for expressions of interest will be used to guide the selection of a partner or partners who will work with government to design and implement the project.

The project will see the National Industrial Commercial and Investments Limited (NICIL), headed by Winston Brassington, creating a special purpose company, “financed by dent and equity contributions following a public/private partnership model.”

Head of NICIL, Winston Brassington

The call for expressions of interest states clearly that “The GoG is not bound to accept any Expression of Interest.”

A pre-feasibility study was done for the construction of a new river bridge by the Public Works Ministry and has identified the best location for the bridge to be between Houston on the East Bank of Demerara and Versailles on the West Bank of the river.

As it relates to the tolls to be charged the pre-feasibility study predicts that user tolls were considered to increase at a rate of two per cent per year above the existing regime.

The study did point out that “a detailed feasibility study should be done to incorporate exogenous costs and benefits not considered in this study, as well as a financial analysis that addresses the concerns of project -financing and environmental impacts.”

The existing two-lane floating bridge was constructed in 1978 by the UK firm Thomas Storey Engineers Limited and had a life of 10 years.

From 1995 to 1998 the bridge underwent major rehabilitation by the Damien Ship Yards of the Netherlands at a cost of US$9M and an extended life of 15 years (from 1995).

According to the pre-feasibility report, at present the Demerara Harbour Bridge Corporation (DHBC) carries out intensive annual maintenance and element replacement activities on the bridge structure to provide a continuous level of service, and this can be coupled with increasing traffic volumes and level of Government subventions to warrant consideration of bridge replacement.

At present, The Demerara Harbour Bridge Corporation is responsible for the management and collection of tolls, and the average annual revenue collection is approximately US$1.9M.

Between 2002 and 2011, the Guyana Government provided in excess of US$12M in subventions to support the operations of the existing Bridge.
During that same period the revenues collected from tolls was about 75 per cent of the subvention.

The report concedes that while there were no national consultations during the prefeasibility phase, these are planned for the detailed feasibility phase.

It says too that major Private Sector stakeholders and agencies such as the Private Sector Commission (PSC), Georgetown Chambers of Commerce (GCCI), Guyana Manufacturing and Services Association (GMSC), Guyana Shipping Association, Guyana Lands and Survey Commission (GL&SC), Guyana Association of Professional Engineers (GAPE) and the Ministry of Finance were closely engaged.