Consortium bullish on Berbice bridge
Finance to flow from South Africa scheme By Gitanjali Singh
Stabroek News
March 25, 2002

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The government is to invite the Berbice River Bridge Consortium (BRBC) to start negotiations to construct the bridge across the Berbice River and the consortium has already indicated its willingness to get on with the project.

"We are serious and wish to immediately get on with concluding the build, operate and transfer (BOT) arrangement with the government and proceed to construct the bridge," Bernard Matthews, the local partner in the consortium told Stabroek News.

Prime Minister Sam Hinds says a letter is to be sent to BRBC to confirm the group's continued interest in the project and to invite it to start discussions on the project.

The consortium was ranked the second best bidder for the project 22-months ago under circumstances which were controversial and which awarded the top bid to Ballast Nedam International (BNI). However, BNI walked from the project earlier this month, notifying the government that because of losses sustained in 2001 and a resultant restructuring of its international operations, it was no longer interested in the venture.

The BRBC, which comprises Group 5 of South Africa as the construction team, UWP Engineers as the consulting engineers, Mongmotse Capital as the financial advisers and Matthews & Associates as the local partner, had informed the government that it had a commitment for financing for the project using the credit guaranteed scheme in South Africa. The scheme mandates that once 70% of the inputs for a project are sourced from South Africa, then financing would be available at rates between 8% and 9% per annum.

Stabroek News understands that Republic Finance and Merchant Bank of Trinidad (FINCOR) has also approached the group to be its financiers.

Further, the Capital Equipment Export Council of South Africa is willing to finance the feasibility study and detailed design of the bridge as pre start-up costs.

The bid price of the BRBC was US$45.9 million with the contract having a value of US$36.8M with other charges associated with the project accounting for the rest of the sum. The sum is expected to be reduced given that the Inter-American Development Bank (IDB) has already financed the traffic study, leaving detailed geotechnical investigations and designs as pre-construction work to be done. The bid price is above that of BNI but the reworked BNI price based on negotiations reached US$43.5M.

Given that the traffic study is already completed, the time schedule presented by the BRBC to the government in its proposal would allow for actual construction of the bridge to start in eight months if the data provided by the government to the firm for its bid is verified.

The consortium had anticipated that it would take a month to reach agreement with the government on a contract for the project and mobilisation and financial closure would take another six to seven months. Construction of the bridge as proposed could take between 18 to 30 months.

Once formally notified to start talks with the government, it is anticipated that a team from South Africa would join Matthews in a matter of two weeks to conduct an on-site study of the area and then enter talks with the government on a contract.

Hinds on Monday did not share the view that the government is to take the blame for the delay in the Berbice River Bridge Project. The bid review process which ranked BNI the number one bidder had been heavily criticised.

Hinds in 2000 was asked by attorney Khemraj Ramjattan to mount an inquiry into the review process as BNI had not submitted a financial plan with its bid, had not provided a schedule of cost recovery for the bridge and had not identified a firm to finance the project on its behalf, among other shortcomings. Now Minister of Trade and then consultant to one of the groups, Manzoor Nadir had also supported Ramjattan's arguments and had said that the groups only participated in a charade as there was a preferred investor before bids were invited.

But the bid review team headed by Winston Brassington and Tarchand Balgobin had stood by its ranking of BNI as the number one bidder at the time.

Ramjattan on Friday maintained his initial criticisms of the process.

"It came as no surprise to me that the financial arrangements could not have been put in place by Ballast Nedam because of the fact as was stated by me earlier, it never had a financial package to support the project," Ramjattan said in an invited comment.

He noted that the delay is hampering everyone in Guyana and wishes that the bridge could go up as quickly as possible, whoever the investor is.