…Jagdeo says corruption already evident with little information available
Former President Dr Bharrat Jagdeo is calling on Minister of Public Infrastructure, David Patterson and the government at large, to come clean with the Guyanese populace on its bid to bridge the Demerara River, including its financial structure, level of subsidies and, likely toll increases and 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.
Raising several burning questions on the construction of the new river bridge across the Demerara River, currently being pursued by the Administration, Jagdeo pointed to the concerns raised by the consultants in their 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 consultants had pointed out that the cash flow from the operations of the bridge will remain in the negative for at least 15 years and that government will have to subsidize 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 will require the financial support of government.
The consultants in their report informed the Guyana Government that the tolls alone will not be enough to cover the operations of the Bridge and that the costs to even get it in place would be considerable.
The consultants said too, commercial funding parties will require government’s involvement and further commercial investors are not likely to be found since they will 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 consultants have pointed out that government is 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.
He told reporters “we (are) not hearing the government on any of these things…the Berbice Bridge did not have a single cent of sovereign…the Berbice Bridge did not get any subsidy for revenue.”
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…how much debt will you guarantee, these are huge questions for a project of this nature.”
The Opposition leader further suggested that based on what little information is available, the project already wreaks of corruption.
Jagdeo was adamant it is no coincidence that a senior member of the Reform component of the People’s National Congress Reform (PNC/R) and financier of the ruling coalition government, would now stand to benefit financially from this arrangement.
The Opposition Leader during his media engagement used the occasion to draw reference to a plan that had been reportedly devised by the financier in 2015, which had concluded that the best location to land the new bridge was the Versailles/Houston link.
Jagdeo surmised that the financier’s suggestion was made without the aid of a feasibility study and juxtaposed his then suggestion, with the recommendation in the Feasibility Study which he says ‘miraculously’ chooses that location as the best option for the bridge. This he noted despite the conclusion of any environmental and other social impact studies being conducted on the identified alternative locations.
According to the Former President, the financier now stands to benefit from huge sums of money, since the land at the Versailles end of the proposed bridge, in fact belongs to the financier and government will have to pay him to acquire such lands.
The Former President suggested that the project, based on the recommendations of the project consultants, 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.
Furthermore, Jagdeo in his critique of the current approach being pursued by government in order to construct the bridge, pointed to the shady nature of the ongoing entreats to solicit contractors.
He reminded that Patterson in August last had publicly criticized the previous 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 this 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, the nature of the concessions offered and 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$40M and according to Jagdeo, this obtained with no debt having to be guaranteed by the State or any subsidies having to be transferred.