Identifier
Created
Classification
Origin
06GEORGETOWN233
2006-03-13 11:48:00
UNCLASSIFIED
Embassy Georgetown
Cable title:  

BERBICE RIVER BRIDGE AGAIN INCHES TOWARD REALITY

Tags:  ELTN ECON PGOV EFIN GY 
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RR RUEHGR
DE RUEHGE #0233 0721148
ZNR UUUUU ZZH
R 131148Z MAR 06
FM AMEMBASSY GEORGETOWN
TO RUEHC/SECSTATE WASHDC 3247
INFO RUCNCOM/EC CARICOM COLLECTIVE
RUEHLO/AMEMBASSY LONDON 0096
RUEHTC/AMEMBASSY THE HAGUE 0346
RUEHAT/AMCONSUL AMSTERDAM 0001
UNCLAS GEORGETOWN 000233 

SIPDIS

SIPDIS

E.O. 12598: N/A
TAGS: ELTN ECON PGOV EFIN GY
SUBJECT: BERBICE RIVER BRIDGE AGAIN INCHES TOWARD REALITY


UNCLAS GEORGETOWN 000233

SIPDIS

SIPDIS

E.O. 12598: N/A
TAGS: ELTN ECON PGOV EFIN GY
SUBJECT: BERBICE RIVER BRIDGE AGAIN INCHES TOWARD REALITY



1. SUMMARY: The GOG's point person on the one-mile long
Berbice River Bridge project, which would connect the
agricultural east Berbice region with the central coast and
Georgetown, has predicted completion of the bridge by
October 2007. Significantly, funding for the US$37.2 million
dollar project is expected to come from private sector
shareholders, though details remain uncertain. END SUMMARY.


2. Head of the GOG privatization unit, Winston Brassington,
told a parliamentary subcommittee on March 8 that he expects
construction of the Berbice River Bridge to be completed by
October 2007. Brassington expects construction to begin in
April 2006, following conclusion of contract negotiations
with the UK/Netherlands consortium that won the bid in
January. Brassington's statement follows President Jagdeo's
announcement during a visit to the region on March 7 that a
contract would be awarded by the end of the month.


3. The bridge itself is forecast to cost G$7.4 billion
(US$37.2 million) and be financed by a debt/equity mixture.
An October 2004 feasibility study by the Louis Berger Group
found the project economically feasible provided the cost of
construction does not exceed US$37.5 million. The build-own-
operate-transfer arrangement assumes cost recovery through
toll collection. In addition, the IDB has pledged US$11
million for access roads leading to the bridge once
construction has commenced.


4. Parliament passed a bill authorizing construction of the
bridge in December 2005. The bill also established a private
special purpose corporation, Berbice Bridge Company
Incorporated (BBCI),to finance the venture. Four
shareholders will hold BBCI's equity -- Clico Life and
General Insurance Company, Hand in Hand Insurance, Secure
International Finance Company, and the National Insurance
Scheme (Guyana's pension fund). Brassington also identified
a potential fifth shareholder, though he declined to name it
to the parliamentary committee or during a follow-up
conversation with EconOff. Media speculation has centered on
the New Building Society (NBS),a publicly-chartered housing
finance corporation. The act authorizing the bridge's
construction includes language allowing the NBS to invest in
debt instruments issued by the BBCI. However, some NBS
shareholders and directors have reportedly resisted efforts
to amend the society's charter to allow it to invest in such
a project without a GOG guarantee on the investment.


5. COMMENT: The Berbice Bridge has been an apple in the
GOG's eye since the early 1990's, and this is not the first
time it has neared fruition. In 2002, a Dutch contractor
received a contract to build a similar bridge, only to
withdraw shortly before breaking ground. Not surprisingly,
while the opposition has expressed conceptual support for a
bridge across the Berbice River, some have dismissed the
current proposal as an election-year ploy and attempted to
cast suspicion on the timing of the project. To some extent,
the GOG has taken a substantial risk in proclaiming the
project's imminent commencement if details on financing are
not yet in place. However, the GOG may also figure that
breaking ground in the run up to the elections will allow
for some added political capital. This would be especially
useful in the Berbice region, a traditional stronghold of
the ruling PPP party where dissatisfaction with the
government is reportedly on the rise. END COMMENT.

BULLEN