Transport and Hydraulics Minister, Anthony Xavier says the government is ready to sign development agreements with Ballast Nedam International to bridge the Berbice River and is waiting on a date from the firm to so do.

However, the firm is reportedly waiting on the government to take the next step.

Xavier signalled that the government was relying on Ballast Nedam and Fincor (the merchant finance company of Trinidad) to advise that they were ready to go ahead with the project.

A source close to the team indicated that the financing agreements had already been finalised and while the September 11 terrorist attack on the US would change the ball game somewhat in terms of the financing, all was set and ready to go.

However, the source indicated that Ballast Nedam needed to have the development agreements signed as these would be the basis on which it would concretise financing for the project. But, the source noted that because of the depressed nature of the bauxite community in Berbice and the possibility of Everton being closed, the location of the bridge might have to be revisited. Xavier said he was not aware of any such concerns.

But the source noted that the government's specification was for the bridge to be located upstream of Everton with a minimum vertical clearance of 85 feet above mean high water level and a minimum horizontal clearance of 180 feet.

The source said that if Everton were to be closed, then the bridge could be constructed downstream near the narrowest point of the Berbice River and closer to the populated centres.

The source said that relocating the bridge in such a scenario would minimise construction costs and reduce the investment in approach roads as well. The source also noted that the returns might be greater as it would be easier for businesses to locate near the populated areas.

A decision on Everton is in the hands of the government, which is in the process of negotiating on a proposal to take over the operations of Bermine, which include Everton.

The source indicated that since the problem with Aroaima Bauxite Company and Bermine arose in recent months and Alcoa/RII pulled out of the former, the government had not been able to give the bridge the priority it required.

The President had asked for an assessment of the effect of the bauxite problems and possible dislocations on the construction of the bridge. It is not clear whether this has been provided.

With these further setbacks, it is not likely that construction of the bridge across the Berbice River will begin before mid-2002.

While the draft development agreements have been cleared by both the government and Ballast Nedam, securing the financing would take some time along with mobilisation.

Some weeks ago, financial closure of the transaction was set for the first quarter of next year, but this target date might not be achieved.

Following the signing of the development agreements, a team would be named to oversee the processes leading to construction. The development agreement sets out the terms and conditions under which the government, Fincor, and Ballast Nedam will cooperate throughout the complete development and implementation phases of the project. The agreement lays the basis for the design-build contract, the concession agreement and the ongoing operations and maintenance of the project as well as associated agreements.

The project is to be managed by a special purposes company in which Ballast Nedam will have a 25% interest. The government will grant similar concessions as given to other investors to the Special Purpose Company, but its accounts would have to be perused by the government once the concessions and special benefits apply.

The development agreement supersedes the memorandum of understanding signed between the government and Ballast Nedam on September 27, 2000. The government had invited proposals in December 1999 and had selected Ballast Nedam as the preferred bidder in June 2000.

The government will be tasked with the environmental impact assessment and the construction of the access roads to be vested with the project. Ballast Nedam and Fincor will be responsible for all the debt and equity arrangements.

The Special Purposes Company, expected to be in existence for some 30 years, is to be incorporated at least one month prior to financial closure and the project is expected to make maximum benefit of local resources.

The total cost of the project, including vessel impact protection, interest and pre-financial closure expenses is estimated at US$43.2 million. Ballast Nedam International and other investors are expected to inject equity amounting to US$7.5 million. The rest of the money for the investment is to be borrowed, with some US$24 million anticipated from international lending institutions and US$12 million coming from local debt and sinking funds.