Govt. seeks new builder for Demerara River Bridge

Feb 09, 2022 News

…ends negotiations with Chinese firm due to high costs

Kaieteur News –The contract with China State Construction Engineering Corporation Limited (CSCEC) to build the $53.7B New Demerara River Bridge has been terminated. This is according to Vice President, Bharrat Jagdeo who made the disclosure during an interview with foreign media house – Vice News Agency.
The government last year in an official statement confirmed it had secured a Chinese firm to build the new bridge under a Design-Build-Finance (DBF) model. During the interview, the Vice President said, “we have just terminated the negotiations with them (CSCEC) because the cost of financing is too high.” At an event held earlier in the year, Minister of Public Works, Juan Edghill had mentioned that a specially appointed team was concluding the negotiations and all the administrative details to prepare for the signing of the contract for the new bridge. The Vice President explained that the government will now move to the second ranked bidder for the project “because we have to get the cost down.”
During day two of Consideration of Estimates and Expenditure being held at the National Assembly, Opposition Member of Parliament, David Patterson asked Minister Edghill to provide a status on the award of the contract. The Minister’s response was similar to that of the Vice President. Edghill said on Tuesday that “As of today, the negotiating team which comprises of a lawyer, engineers, finance specialist and management consultants have been engaging with the number one ranked bidder and the negotiators have since informed the National Procurement and Tender Administration Board that they wish to terminate the negotiation process because the terms sheets and the cost of financing would not serve the best interest of the people of Guyana.”
He added, “currently, we are negotiating with the second ranked responsive bidder.”

Vice President, Dr. Bharrat Jagdeo.

When the final set of tenders was opened for this project in October last year, four Chinese constructing firms were vying for the contract. The firms were China Gezhouba Group Company Limited, which submitted two financial proposals of US$387,566,116 and US$491,810,000, China Road and Bridge Corporation in joint venture with Peutes and Calzadas Infrastructuras SLU (China and Spain) which submitted bids US$340,698,473 and US$ 364,160,202, China State Construction Engineering Corporation Limited which submitted a bid of US$256,638,289, and China Railway Construction Corporation International Limited who is in joint venture with China Railway Caribbean Company Limited; and China Railway Engineering Bureau Group Company Limited submitted three financial proposals of US$260,852,464, US$260,852,464 and US$300,000,000.
Among this group, CSCEC submitted the lowest bid, followed by China Railway Construction Corporation International Limited and its joint ventures.
It should be noted that the new bridge aims to replace the aging Demerara Harbour Bridge with a modern four-lane structure that will facilitate greater traffic capacity and dramatically improve commuter convenience. The bridge which is commonly referred to as a “flyover bridge” is set to be built with the lifespan of 50 years and will not require opening or retraction to allow for maritime.
The Ministry of Public Works had stated before that the new bridge comprises a critical component of the Government’s drive to expand and modernize Guyana’s transport infrastructure. During the reading of the Budget 2022, Senior Minister with responsibility with Finance, Dr. Ashni Singh had announced that this year, some $21.1B has been allocated for the project. A perusal of the profile page of the project that falls under the Ministry shows however that the financing is not external but rather is being funded by central government.
When the government had given its no-objection for the Ministry to engage the Chinese firm, at that time, it was pointed out that the project would be done under the DBF model with financial terms and conditions, “which would be no less favourable than those submitted in the preferred bidder’s price proposals.
With a contract still to be signed, the proposed location for the New Demerara River Bridge will see the structure being laid between Nandy Park on the East Bank Demerara and La Grange on the Western end of the Demerara River.