Govt decision on Interchange Project by April

By April Government will take a decision on the Interchange Project. Works Minister Frankie Khan in response to a question in the House of Representatives yesterday revealed that the last administration declined cheap funding from the Inter-American Development Bank, and chose to borrow more expensively from Citibank. Khan also revealed that the $150 million loan had already accrued interest of approximately $40 million even as the project was still being designed.

Khan said it was obvious that from the outset the project had been mismanaged both at the financial and engineering levels. “By the end of April 2003, a clear and unambiguous solution will be advanced to the nation,” the Minister promised. But turning to the alleged irresponsibility of the UNC administration which turned down IDB funding, Khan stated: “Mr Speaker the EIB/IDB funding for $150 million would have carried a total interest of $59.8 million over the life of the loan resulting in a total cost to the country (capital and interest) of $209 million. The Citibank financing which the Government opted to use carried an interest rate of 11.4 percent resulting in a total interest charge of $320 million at a total repayment cost of $508 million...What this means is that the Government, with superior options available to it, deliberately chose to pursue the project at an additional cost of $300 million,” Khan stated.

Khan said while the IDB funding would have imposed a measure of transparency, Government, having sourced the funding locally, was free to direct the tendering and award of contracts as it saw fit. He read into the records a letter from former Planning Minister John Humphrey in which he directed UdeCOTT to award a design/build contract to Pres-T-Con and to EIFFEL. Khan said that throughout the contract there were concerns held by both UDeCOTT and the Ministry of Works and Transport regarding the engineering design work being produced by the Consultant, PCA/Interplan Group Limited whom UDeCOTT had been directed to hire. These concerns were reinforced by an international bridge and civil works specialist, Parsons Brinckerhoff of Florida, whom UdeCOTT had retained. Khan said the new government put the project back under the Highways Division’s Chief Planning Unit of the Ministry of Works and Transport. He said a team has made several presentations and a final report is to be presented to Cabinet on April 30, 2003. In the meantime a short term plan aimed at increasing intersection and lane capacities has been implemented at a cost of $13 million and is 80 percent complete. Saying that UdeCOTT attempted to award the contract for the construction of the Interchange “under complex and confusing circumstances, overlaps and conflicting instructions”,  Khan said it was not surprising that the award process was challenged and is now the subject of a High Court matter.