At a recent function to rename the Centre of Caribbean Studies at the University of Warwick in honour of our renowned business icon Yesu Persaud, I met Mr. David Patterson, Minister of Public Infrastructure. He agreed to an interview with me to discuss a number issues, most importantly being the proposed new Demerara Harbour Bridge between Versailles and Houston. The meeting was scheduled for 10.00 a.m. last Friday. By the time I arrived, the Minister had already alerted his Secretary and had arranged for a technical officer to be present. The Secretary ushered me into the Minister’s boardroom and within one minute the interview commenced. It lasted for exactly one hour since the Minister had another engagement at 11.00 a.m.
Re: Previous article on the proposed new Demerara Harbour Bridge
On 2 October 2017, we had carried an article entitled “Procurement of consulting services and prequalification procedures” in which we discussed the Ministry’s decision to engage in sole source procurement for the selection of the consulting firm, LievenseCSO, to conduct the feasibility for the new Bridge. The Ministry had sought to engage in the open tender approach, but the results were unsatisfactory. As a result, it abandoned this approach which would have required re-tendering, and proceeded to select the consultants via the sole source method.
We had examined the facts of the matter, outlined the requirements of the Procurement Act relating to consulting services and concluded that there was no breach of the Act. In accordance with Section 49, a procuring entity may engage in single source procurement where the services to be procured require that a particular consultant be selected due to its unique qualifications or where it is necessary to continue a project with the same consultant. However, the contract is awarded only if the selected consultant agrees to be subjected to cost verification during the performance of the services. The contract shall indicate the accounting obligations of the consultant, including the obligation to present appropriate accounts or documents allowing the determination of the cost of the services. The procuring entity may also negotiate the terms of the contract with the selected consultant but under no circumstances may engage in negotiations with more than one candidate simultaneously.
The article also dealt with the Ministry’s announcement that only three firms would be shortlisted following the receipt of applications to prequalify for the construction of the Bridge. We made it clear that this proposed restriction would violate the Procurement Act. Section 6(5) requires the procuring entity to make a decision with respect to the qualifications of each supplier or contractor submitting an application to prequalify. In reaching that decision, the procuring entity shall apply only the criteria set forth in the prequalification documents. It shall promptly notify each supplier or contractor submitting an application whether or not it has been prequalified and shall make available to any member of the general public, upon request, the names of all suppliers or contractors that have been prequalified.
By Sections 6(6) to 6(8), only suppliers or contractors that have been prequalified are entitled to participate further in the procurement proceedings. The procuring entity shall, upon request, communicate to any supplier or contractor that has not been prequalified the grounds therefor. Should the procuring entity decide that a supplier or contractor does not satisfy the prequalification requirements, the supplier or contractor may, upon request, obtain a review of that decision pursuant to Part VII dealing with bid protests.
In the said article, we had stated that the feasibility study recommended a low-level bridge instead of a fixed high-level one considered the best option in a 2013 pre-feasibility study. The former will still require daily closing and opening to allow ships to pass, resulting in a build-up of traffic and hence the dreaded traffic congestion that we are experiencing daily on the East Bank. We raised the issue as to whether the problem being experienced with the operations of the current bridge is not being transferred closer to the city, and suggested that if funding is not available to construct a fixed high-level bridge, it stands to reason that we should delay the construction until we are able to garner the necessary funds.
Clarifications by the Minister
Asked whether he had any comments on our assessment and conclusion regarding the engagement of Lievense CSO, the Minister stated that he was happy that there was no violation of the Procurement Act, despite criticisms to the effect that the Ministry should have re-tendered for the conduct of the feasibility study.
The Minister, acknowledged our concern about the proposal to restrict the number of contractors submitting tenders for the construction of the Bridge following an invitation to prequalify. He indicated that the Ministry was in dialogue with the National Procurement and Tender Administration Board and the Public Procurement Commission with a view to advising on the way forward. One consideration is to revisit the pre-qualification criteria and agree on a minimum revised score above which a contractor becomes eligible to submit a tender. The overall objective is to reduce the administrative burden that is associated with the evaluation of a large number of tenders.
Demonstrating through a computerized simulation model, the Minister clarified that the Bridge will neither be a floating one nor a flat one. Rather, it will be a permanent structure with a height of 17.5 meters. At this height, approximately 90% of the riverain traffic will traverse the Demerara River without the need to disrupt the operations of the Bridge. To cater for the remaining 10% of the riverain traffic, there will be a section of the Bridge that will be lifted hydraulically 47.5 metres. This section will have a width of 70 metres, five metres wider that of the existing bridge at Bagotstown. The Minister explained that, unlike the operations of the current bridge which opens and closes every day for more than one hour, there will be a bar and a stop light at the beginning of the hydraulic section. When a vessel approaches the bridge, the stop light will show red and the bar lowered, thereby bringing vehicular traffic on the Bridge to a halt. As soon as the vessel completes its passage through the Bridge, the green light will come on and the bar lifted. This interruption is expected to last 10-15 minutes.
In dealing with the traffic congestion that may be posed by the operation of the new Bridge, the Minister explained that vehicles coming from West Demerara to Georgetown will be diverted in three different directions. There will be an exit at Houston for vehicles to join the East Bank traffic towards the Banks DIH turn and the DSL junction on Mandela Avenue. Traffic on the Bridge will then continue east via an overhead pass above the East Bank road, with an exit to Cemetery Road on Mandela Avenue before merging with the traffic towards Sheriff Street. The Minister estimates that the West Demerara traffic will be dispersed evenly and therefore there will be less congestion coming into the city, compared with what pertains currently.
The estimated cost of the Bridge is US$150 million, excluding the supporting network of roads on both sides of the river. The latter will be financed by the Government of Guyana at an estimated cost of US$20 million, and work has already started. According to the Minister, there are two options for financing. The first is for the Government to enter into a Build, Own, Operate and Transfer (BOOT) contract with a reputable operator. BOOT is a public-private partnership project model in which a private organisation conducts a large development project under contract with a public-sector partner, such as a government agency. It is a way of developing a large infrastructure project with private funding. The private-sector partner assumes the risks associated with planning, constructing, operating and maintaining the project for a specified time period. During that time, the developer charges customers who use the infrastructure that has been built. At the end of the specified period, the private-sector partner transfers ownership to the public-sector partner, either for free or for an amount stipulated in the original contract. Such contracts are typically long-term and may extend to 40 or more years.
The other option is for the Government to meet the cost of construction of the Bridge. This will require a loan in the sum of US$150 million and has implications for the Public Debt as well as the debt ceiling. According to the Minister, the important consideration is whether a loan of this magnitude will crowd out much-needed smaller loans to other sectors of the economy, such as education, health and agriculture.
As regards the infrastructure works on the Sheriff Street/Mandela Avenue, the Minister clarified that the original plan to expand Sheriff Street from David Street to Duncan Street had to be modified because of concerns raised by business owners in the area. As a result, this portion of the project will remain a two-lane road with enhancements, such as constructing sidewalks, strengthening the bridges and making car parks. The revised estimated cost is US$36 million, and not US$66 million as was reported elsewhere. Financed by the Inter-American development Bank, the works were advertised in five lots. However, a prospective contractor may tender for the combined lots.
The construction of the Ogle/Diamond highway is being financed by the EXIM Bank of India in the sum of US$50 million, and work is expected to commence next year with the recruitment of consultants. In relation to the Diamond/Soesdyke portion of the highway, the Minister indicated that his Ministry intends to include it in next year’s budget to begin the feasibility study.
This Column expresses its gratitude to the Minister for providing clarifications on a number of contentious issued that have been highlighted in the media, and for the frank and open discussion that took place. One hopes that other Ministers will follow suit in terms of their willingness to engage in free, frank and open discussions on the operations of their Ministries and Departments. After all, accountability to the public is an integral part of ministerial accountability.