Trinidad & Tobago taxpayers likely to inherit fresh $7.3 billion in debt for new Mayaro highway
Saturday, March 07 2015 @ 12:00 AM AST
Contributed by: michaelariston
Trinidad & Tobago's government expects to start work on its proposed San Fernando-Princes Town-Mayaro highway, which could cost around $7.3 billion (US$1.15 billion) ceteris paribus, before elections, the country's Works and Infrastructure Minister Dr Suruj Rambachan (below striped tie) told reporters yesterday, Newsday said. http://www.newsday.co.tt/news/0,207920.html
The country - already burdened with a projected deficit in fiscal 2014/2015 of anywhere between $7 and $11 billion due to low oil prices - does not have that kind of money, except maybe in the Heritage and Stabilization Fund, which according to the latest report, is going down http://finance.gov.tt/heritage-and-st...mber-2014/
Therefore when the minister, coming out of the Latin Finance conference at the Hyatt in Port of Spain Thursday, tells reporters talks have begun on "financing," what he most likely means is that government is going to borrow money to build the highway.
The other major south highway being built, the Point Fortin highway, is costing $7.2 billion (US$1.13 billion). The project includes, according to NIDCO, a 4-lane 47 kilometer (km) highway and 2.5 km road.
The distance from San Fernando to Princes Town to Mayaro is 67.5 km along the Naparima-Mayaro Rd, which currently traverses San Fernando-Princes Mayaro, according to http://GlobeFeed.com Distance Calculator using Google Maps. The "straight line or air distance" is 50.37 km, or 31.3 miles. Therefore the shortest this Mayaro highway can be is 50.37 km.
At a per kilometer rate ($145.45 million per km), the new highway, financing and construction on which the government hopes to decide on before elections (if it hasn't already), would cost more than the $7.2 billion Point Fortin highway. At $145.45 million per km, the highway to Mayaro could therefore cost around $7.33 billion.
Following in the footsteps of the previous PNM administration, the PP government would likely enter a binding agreement with the new Mayaro highway contractor before the next election, so that the next government, constrained by expensive termination clauses in the contract with said Mayaro highway contractor, would have to complete the project with the contractor left by the previous administration.
NIDCO identifies Point Fortin Highway as an ongoing project:
NIDCO identifies Mayaro Highway as an ongoing project:
MORE BIG BITES AT FISCAL CHERRY
BEFORE FISCAL YEAR END/ELECTIONS
Government proposes to give out 100 houses a week, the Express reports
Highlights of Express report:
- 80% of houses to be distributed are new homes constructed from 2010 under sitting government
- According to Express calculations, 100 houses from March 14 to December 31 amounts to 4,200 houses over next 10 months
- Over 160,000 people waiting for houses, Minister Roodal Moonilal (at right in blue tie) said.
Opinion on two reports above:
- Government may be trying to propel economic growth by orchestrating a construction boom, which would avert a recesion amid oil price slump
- Already low unemployment may fall further, and it will become even harder to increase productivity amongst locals, and more "skilled labour" would have to be imported
- 4,200 new homes in 10 months may force private sector rental prices down
- the rush to complete the above two projects raises questions about:
- - - adherence to transparent procurement procedures;
- - - adequate time for contractor selection (assuming one hasn't been chosen already);
- - - the quality of the "deliverables";
- - - supply constraints;
- - - electioneering with state's name and credit
- Both projects at the same time could overheat the economy and increase inflation (or simply put everyone will have to pay more for everything)
- the 2014/2015 budget deficit could be much larger than the expected ($7-$11 billion), because even if none of the above happens, the PNM had spent more than $500 million commissioning studies (like feasibility studies) on mega-projects that never materialised (rapid rail/speed trains, etc); given that the PP government has used PNM precedents as its moral compass in the past, do not be surprised if the same happens with the proposed Mayaro highway.
- Photos are official government media portraits
- Map by Google Maps