Negotiations are now underway with a Chinese consortium for the construction of the new Demerara River bridge after the financing terms for the number one bidder were found to be too onerous.
Government is currently in discussion with the second-ranked bidder, China Railway Construction Corporation (International) Limited in a Joint Venture with China Railway Construction (Caribbean) Company Limited and China Railway Construction Bridge Engineering Bureau Group Company Limited.
Minister of Public Works, Juan Edghill yesterday told Stabroek News that government was forced to terminate negotiations with China State Construction Engineering Corporation (CSCEC), which had received cabinet’s No Objection, after their financers were no longer willing to support the venture.
He told Stabroek News that even if CSCEC had agreed to finance the project, their terms of repayment would have “strangulated” the country.
“We are looking for the best deal… anybody can come and say they are financing but what is the terms of the interest? So we have to get a superior proposal that is compatible with the terms of concessional financing,” Edghill explained.
Quizzed on the negotiations with the China Railway Group, Edghill said their discussions have been progressing and the evaluating team is scheduled to meet again with the company this morning. He indicated that the company is expected to provide a Terms of Interest sheet to the evaluating team.
The Minister expressed the hope of the negotiations being concluded in a month’s time. He emphasised that while the wish is for negotiations to be wrapped up in the soonest possible time, securing the best terms for the construction is integral.
The termination of negotiations occurred eight days ago and Edghill told this newspaper that while the proposed cost of the bridge was pegged at over US$256 million, that is likely to change. He however maintained that the evaluating team which consists of a lawyer, engineers, project managers, financial experts and other technical staff, is negotiating for the best deal possible.
CSCEC in its tender document pegged the cost for the construction of the bridge at US$256,638,289.
In an interview on February 1st with VICE Media Group, Vice President Bharrat Jagdeo disclosed that the government terminated talks with CSCEC on the grounds that its financing costs are too high.
The interview was released by Jagdeo on his Facebook page on Monday night and it was the first public disclosure by a government official that the top-ranked bidder was no longer in the running.
During the consideration of estimates in the Committee of Supply yesterday, APNU+AFC MP and former Minister of Public Infrastructure David Patterson quizzed Edghill on the termination.
Edghill told the National Assembly that subsequent to the termination of talks, the National Procurement and Tender Administration Board was informed of the results and advised of the evaluating team’s decision to engage the second-ranked bidder.
Patterson questioned the rationale of a budgetary allocation of $21 billion if government requested proposals for a Design, Build and Finance (DBF) option, or alternatively, Design, Build, Finance, Operate and Maintain (DBFOM).
In response, Edghill noted that the money is government’s contribution to the project. He defended the allocated sum by stating that even if they asked for a build and finance option, government must provide some amount of finance to contribute to the project. In the sum, there is also an allocation for 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,” he explained.
“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,” Minister Edghill expanded as he responded to questions from Patterson.
Lands
Pressed further on whether there is an allocation for the acquisition of lands, Edghill responded in the positive noting that a sufficient amount has been set aside. He however declined to state the amount arguing that if he released the amount, elements against the government will seek to stall the process by influencing property owners who are to be compensated to reject offers made.
“Using the law and fulfilling the constitutional provisions that if we have to acquire or compulsorily acquire property, it will be in keeping with what the constitution says and at market value. We will not be denying anybody of their property, we will fulfill the constitution,” he declared to the House as he assured that properties acquired will be at a fair price.
During a press conference back in November, Jagdeo had announced that CSCEC was selected for the construction of the bridge.
After the signing of the contract this year, the selected contractor will design and build the bridge, which has a two-year “non-negotiable” completion deadline.
The bidding document had specified the criteria for making a bid on the project. It stipulated that bidders must present proposals for a Design, Build and Finance (DBF) option, or alternatively, Design, Build, Finance, Operate and Maintain (DBFOM).
The Scope of Works in the design/build contract included the complete design and construction of a two-lane dual (four-lane) carriageway, hybrid cable-stayed centre-span bridge with concrete box/T-beam girder approach bridge structures, and must include bridge collision protection, a navigation span to accommodate Handymax vessel navigation aids, lighting, signage, and all other ancillary works, an access road with a minimum of 50 meters up to abutments, toll-collection buildings, and ancillary buildings on the West Bank of the Demerara River.
When completed, government wants a new four-lane, high-span fixed bridge in the vicinity of the current location and which terminates at Nandy Park on the East Bank of Demerara. “The new design of the Demerara Harbour Bridge will not require opening or retraction to allow for maritime traffic and will be built with a life span of at least 50 years,” the bidding document states.
Government has mentioned that it may have to acquire those lands which fall in the path of the new location which terminates at Nandy Park on the east bank and La Grange on the west bank, but a decision on that matter has not yet been made.
Ali had said that the new bridge would be a very high one, standing at a minimum of 50 metres or as high as or higher than the Marriott Hotel, to facilitate clearance for vessels.
There has been a major controversy over the decision by the Environmental Protection Agency not to require an Environmental Impact Assessment for the project. This decision has been appealed and the Environmental Assessment Board has to give a date on when it will come up for hearing. This issue is still to be resolved.
