Key reports due early next year on deep-water port, road to Brazil

As early as the first quarter of next year, the Government of Guyana will have a better understanding of what will be required to make the Guyana-Brazil land transport link a reality and a clearer idea of a site for a deep-water port.

A deep-water port to boost trade and a road link to service Brazil’s northern states have been on agenda for a number of years. With oil revenues set to begin flowing in 2020, Guyana may be in a better position to take financing decisions on these projects.

According to a release from the Inter-American Development Bank (IDB) Representative here, Sophie Makonnen, the Government is working with the IDB via a Technical Cooperation Agreement to advance the Guyana – Brazil land transport link and a deep-water port. The recently concluded market study has paved the way for work to begin which will see Guyana moving closer toward this goal.

At present three companies have been engaged and are working simultaneously to help move various aspects of the project into fruition, the statement said. The results of the three studies to help the government make a determination, will be completed by early 2019.

Maritime & Transport Business Solutions (MTBS) is conducting studies to help determine the optimum location of a deep-water port in Guyana. The firm will prepare business case scenarios for the four potential sites, undertaking financial and economic option analyses, and subsequently develop a proposal and preliminary design for development of the selected option.

According to the IDB release, strategic environmental and social studies being conducted by the RINA Group will include identification and analysis of key environmental priorities, challenges and opportunities, diagnosis of the environmental institutional and governance framework and assessment of the most important environmental and social constraints bearing on the performance of the project. This analysis and its recommendations are expected to provide valuable complementary information to support comprehensive decisions on possible strategic opportunities and cooperation.

Guyana-Brazil Border Studies conducted by Estudios, Proyectos y Planificacion (EPYPSA) is expected to provide the Ministry with sound technical expertise regarding the Lethem border crossing being an integral element of a future land transport link between Guyana and Brazil, the IDB release said. This study will build on the results emanating from the previous market study completed by HPC Hamburg Port Consulting Gmb. This firm will assess the functionality of the current infrastructure at Lethem, conduct mapping of the control processes and agencies involved in regulation of international trade flows, assess the information technology, identify trade policy instruments and make recommendations on international good practices, trade policy and improvements which could boost the efficiency of the Lethem border crossing. The study is expected to fully complement the above-mentioned studies by providing the technical team with valuable details and recommendations to support an effective land transport link in future.

Under the technical cooperation agreement, a transport consultant, an expert in ports and logistics, has also been contracted to provide specialized supervision services.

The IDB technical co-operation assistance for this project was first announced in December 2013. The technical cooperation document that had been issued then on the three components had said that Component One, the market study, would determine the size and value of the shipping markets in the Brazilian states of Amazonas, Para and Roraima so as to ascertain the degree of trade that could be diverted to a port in Guyana, as well as new commodities that could be traded between these Brazilian states and Guyana. The demand for land transportation between Guyana and northern Brazil would also be examined, given the scenario that a suitable port(s) is available on the coast of Guyana which could accommodate the shipping needs associated with the expected demand.

The study would also assess the current and future (growth) transportation and market demand in the Amazonas/Roraima states of Brazil and also current options and cost available, considering the ports in Brazil, Venezuela and Guyana. A key element of the market study would be consultation with the shipping stakeholders in Brazil, Venezuela and Guyana to ascertain the relationships they have with shipping lines and also to better understand the dynamics of the industry.

The market study would estimate the traffic for various scenarios (low, medium, high) which could be diverted from the current ports to Georgetown and the revenue that could be had on the land transport leg by way of tolls, while still remaining competitive. The study would also examine the local traffic demand and quantify the tolls which could be generated. The overall revenue estimation would include both Brazilian generated and local traffic. The outputs of this market study would be inputs for the Terms of References for the Engineering, Economic and Financial studies, the IDB had said then.

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