As analyst finds millions in hidden costs to be borne by taxpayers
Advisor to the Opposition Leader, Dr Peter Ramsaroop believes the new Demerara Crossing is nothing more than the President looking to leave in place a legacy with one of the PPP proposed projects, but lack the financial know-how on how to implement - in face of his acceptance of his fate as a one term Head of State - and that this will in fact be the final nail in the coffin of the sugar industry of Guyana.
“This will consume all money earmarked for the sugar industry, at projects not essential at this moment.
The money the PPP administration had set aside for the diversification of the sugar industry, they know are using for the Demerara Bridge.”
Granger would rather see a productive sector be eliminated and many thousands out of jobs just to see his legacy next to his mentor, President Burnham.
The notion was posited by Dr. Ramsaroop after Opposition Leader, Dr. Jagdeo, flayed the Government for its blatant lies on this and many other projects.
Dr. Ramsaroop, who contends that the Minister of Public Infrastructure, David Patterson - in his defence of what will undoubtedly Guyana’s single largest project - “has either all but exposed this fallacy or is himself clueless as to what is really going on around him.”
The financial analyst said his assertions can be gleaned when taking even a cursory look at the Feasibility Report for the construction of a New Demerara River Crossing which was done by the coalition Government- a report that costs in excess of $150M.
According to Dr Ramsa- roop, the report outlines three possible toll increases from its year one of operation, ranging between 100% and 300%.
None of knows what will be the financial exposure on the treasury.
“This increase alone, on an already struggling population is nothing short of unconscionable,” he said.
Dr Ramsaroop has since surmised, however, “the problems do not end with mere toll increases since, in all of the financial models that have presented to this administration by their consultants; it repeatedly dismisses them as not viable given the US$170M price tag for the bridge alone...Each of the models proposed requires an untold amount of government support.”
The businessman said, “these people are smart in a way, because the report speaks to a construction cost of US$150M with additional financing such as interest during construction and in all of the designs there are mass expanses of road networks that are not optional.”
Ramsaroop is of the firm believe that the true costs of this project have not even been laid out in the report, since there is no reference to the actual cost of the accompanying elevated road network and ancillary structures.
Only recently, the administration inked a contract for the upgrades of the East Coast and West Coast Public Roads.
Dr Ramsaroop reminded that each of those were in excess projects are in excess of US$40M.
“This means that already the bridge project exceeds either the expansion of the Cheddi Jagan Airport or the Skeldon Sugar Factory. To- gether those projects cost US$280M.”
He surmised, “already by just including the cost of the road we can see that this new bridge is going to cost almost the same as Guyana’s two largest projects combined...a bridge.”
According to Dr Ramsaroop, those speaking in defence of the project are not saying is that none of the financial models are viable and that the tolls increased by 300% for vehicular traffic and 700% for river traffic, the tolls are not even enough to cover the operations of the bridge.”
The financial analyst noted that in the report, in each of the models chosen by the consultants, they have stressed the need for government input either in the form of Guarantees on debt payments, equity investments, zero per cent interest loans and regular subsidies as a means of support.
Ramsaroop pointed to the report, which states that in one proposal, it asks government for as much as US$140M in subsidy in the first decade of its operation.
“This is in order to service debts, debts that have been racked up in order to build the behemoth legacy to the great military dictator of the 21st century.”
According to Ramsaroop, “this act has to be some sort of political heresy since tax payers are being asked to essentially foot the bill for a project that can’t even pay for itself. Not only will it become a burden on the downtrodden man, even those dependent on a mini-bus for their daily commute but with State having to pour billions into the construction, maintenance, debt servicing and all that comes with it, there is little left for other sectors.”
One such sector for which ‘DAG Crossing’ will spell certain death, is the sugar industry.
Dr Ramsaroop drew reference to the fact that Cabinet met on Tuesday last while the President was out of the country at the UN General Assembly.
Prime Minister Nagamootoo, “the man that had championed himself as a defender of sugar workers no doubt would have had to support the key item on the agenda, a multi-billion subsidy for the Guyana Sugar Corporation in order to meet employment cost.
“In other words pay people their salaries,” Dr Ramsaroop stressed.
“How on earth is this country going to be able to afford to pour money into Granger’s legacy project and at the same time be able to make the investments and cash transfers necessary in order to save the jobs of thousands of Guyanese?”
According to Dr Ramsaroop, “there is nobody that does not see the need and importance for a new bridge, but at what cost”...Can we really afford to give over to the state, more than US$300M overt the next ten years just to say we built a bridge, a bridge that cannot even make enough money to carry out its own operations.”
Guyanese, he said, “must be more civic minded and try to get a copy of the report and read it and have a national discussion on whether the country can in fact kill the sugar industry in order to build you legacy.
He told this publication the new crossing over the Demerara River is undoubtedly needed but “If Burnham could have bridged that river decades ago at a cheaper cost, his protégé certainly can find not only a cheaper way to get it done but a way that saves the sugar industry and the thousands of jobs that depend on that industry.”
The red flags are there, he said, and used as example the projected increase in tolls from US$5.4M in its first year of operation to more than $8.4M a decade later.
This projection is based on a five per cent increase projected for road traffic. According to Ramsaroop, what the report seems to have forgotten is that the majority of physical land space that is the most accelerated in terms of development lies on the Eastern Bank of the Demerara River.
“This together would the planned East Bank bypass road would mean even if the projected increase in vehicles were to be realized, they are not going to be using the bridge...besides people will avoid that bridge like a plague because of the high tolls.”
According to Dr Ramsaroop, “Patto must be sailing if he still believes that this project is not dangerous to the country when that very report says revenues from toll make up for the operation expenditures but cannot support the debt service.”
Dr Ramsaroop said it is clear the Alliance for Change (AFC) has lost any bit of clout it has ever held under Granger’s Coalition as is evident in Patterson’s ill-informed outbursts.
“The report itself says the toll rates can be increased, but there is a limit to that since too large increase would make the toll unaffordable for many of the people who have to use the bridge. How can you defend such a project knowing fully well that the government support the consultants are asking for is in fact the assistance currently going to thousands and thousands of Guyanese in poor rural communities, poor Guyanese that depend on the continued survival of the Guyana Sugar Corporatio?”