$1.8 billion overrun on waterfront project

THE COST of the Port-of-Spain waterfront project has more than doubled to $3.4 billion (US$551 million), with the cost overrun on the project, considered to be the jewel in the crown of the Patrick Manning administration, amounting to a massive $1.8 billion (US$286 million).

In August, 2005, when the French construction giant Bouygues Batiment signed the contract to design and build an office, hotel and conference centre on the Port-of-Spain waterfront, the price tag on the project was put at US$265 million ($1.6 billion).

Yesterday, Canadian-owned bank FirstCaribbean issued a release saying that it had completed the financing of the “prestigious” waterfront project with a US$375-million transaction ($2.3 billion).

The FirstCaribbean statement said the US$375 million financing was placed by the bank at a fixed interest rate of 6.09 per cent for 15.9 years on the US private placement market, using an "innovative structure.”

The bank said the current financing followed “earlier interim funding arranged and provided by FirstCaribbean in the amount of US$176 million—US$136 million in December, 2005, and US$40 million in June, 2006—for the project.”

The earlier US$176 million plus the current US$375 million mean that the project financing is estimated at US$551 million, substantially more than the US$265 million allocated in the original budget.

The FirstCaribbean statement said, however, the project was “currently within budget and deadline.”

During the last two years, there have been substantial increases in the cost of local construction labour, materials and equipment—mainly as a result of the enhanced pace of State construction.

The appreciation of the euro against the TT dollar is also believed to have contributed to the cost overrun.

When it signed the contract in August, 2005, Bouygues Batiment was part of a consortium comprising Home Construction Ltd, the CL Financial subsidiary and Hyatt Regency, the global hotel chain which was identified as the top-ranked of three groups last December.

The French contractor/developer will be represented in T&T by its unit Bouygues Batiment International.

The consortium is developing the 150,000-square-meter complex on behalf of a company called the Port-of-Spain Waterfront Development Ltd, which is a wholly-owned subsidiary of the Urban Development Corporation of T&T (Udecott).

The first part of the project is expected to be completed by October, this year, the second phase at the end of 2007, with completion expected by the end of 2008.

The two 26-storey towers at the waterfront project will house corporate offices and a 22-storey, five-star Hotel Hyatt Regency hotel with 428 rooms.

Other features of the project include:

A conference complex containing exhibition space
Pre-function rooms, translation booths and media facilities
Retail shopping facilities
Car park with a 1,200-vehicle capacity
According to the Barbados-based FirstCaribbean, the waterfront project "is one of the urban rehabilitation efforts" being made by the Government. The bank described the waterfront project as being of “strategic importance” to the Government’s development plans in the context of its Vision 2020 for the country.

“Upon completion, it is expected to position the T&T capital as a regional hub for finance, international relations and trade,” according to the bank.

Efforts to contact the bank's spokesman were unsuccessful up to yesterday evening.

A list of questions was e-mailed to Udecott spokesman Danielle Jones at 5.48 pm yesterday. Jones said she was unable to respond, because the officials qualified to provide a comment were not available.

http://legacy.guardian.co.tt/archives/2007-05-25/news11.html