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Nidco president: Why Gov’t stopped Rapid Rail after paying consultants $500m
Published:
Thursday, November 1, 2012
Dr Carson Charles
National Infrastructure Development Company (Nidco) president Dr Carson Charles has explained why the Government stopped the controversial rapid rail project after paying $500 million to French consultants.
Speaking about “the crazy project called the Trinidad Rapid Rail that the Leader of the Opposition (Dr Keith Rowley) said he would like to see executed,” Charles said he “thought that must be a statement made (by Rowley) out of ignorance, and some information could be shared on that.”
He said, “A decision was taken to implement a rapid rail project here. No feasibility study was done. In other words, nobody knew what it would cost, but a decision was taken to do it.
A contract was awarded to a company to do it, (a) design-build-operate-and-maintain contract. All it was lacking was the finance package, and you could call it a public private partnership (PPP) project, but it was lacking the finance package.
PPPs normally involve financing, so the Government would have had to find the finance, but it was a design-build-operate-and-maintain contract (that) was awarded to a consortium called the TriniTrain consortium, major partner, a French firm called Bouygues, and the consultants selected to execute the project (was also) a French firm.
“In fact, there were two consultant firms, both foreign. So the consultants are foreign, the design-build-operate-and-maintain contractor is foreign (French) and they are reporting directly to the president of Nidco,” he said. Charles said there was “no engineer involved from this country,” no planner, no economist. “None of the professionals from this country (were) involved at all,” he said. “The reporting is from the consultant to the president of Nidco, who reports to a Cabinet committee on it. When I took over here at Nidco, I inherited this. So the consultant came to report to me in 2010.”
Charles, who spoke to the Business Guardian on October 10, asked rhetorically, “What are the facts of the project? The project is based in phases. At the end of Phase I of the project, in which the design-build-operate-maintain contractor is required to carry out all his designs, his investigations. He did all of his surveys an so on, his geo-technical work, etcetera. He did the design of the cars as the elements for the trains. He did a tremendous amount of work. He presented this work to Nidco, both in hard copy and also in electronic form. It’s a tremendous amount of work we have stored here now.”
He said at the end of phase I, the consultant “came to find out if he had permission to go to Phase II. Phase II involves construction in which he would actually begin to construct the rail system, bring in the cars.” Charles said, “Phase I cost us over $500 million. Remember, a feasibility has not yet been done, and that’s designs. So you spend $500 million doing investigations and designs, but you haven’t done a feasibility yet, and you don’t know what the cost of the project is. How do you find out the cost of the project?
“At the end of phase I, he (the consultant) tells us what the cost of the project is, and this project, his figure is US$7 billion. That’s about $46 or so billion. It makes the San Fernando-Point Fortin highway look like child’s play because the Point Fortin highway is $7.5 billion. This is about $46 billion, plus the cost of acquisitions, and all other consultancy fees that (were) not even counted; management fees and so on.
“All of these have to be counted still, plus, this was also going through the port. So you have to relocate the Port of Port-of-Spain, and if you didn’t relocate the port, the consultant said then you could run the rail through the port, but it would be elevated, so more money.
“In other words, we talking about somewhere between $50 billion to $60 billion, at least, for this project. That’s what I mean by a project we can’t afford. So we paid them the half a billion. We paid them the $500 million. We had no choice because they did the work already, but you know, we can’t use any of the information. It’s just sitting there. If anybody wants it, they can come and contact Nidco and they will get some information on geo-technical investigation and they will get something on rail cars, but we can’t use information on rail cars, can we? To build anything else?”
TriniTrain Consortium
In response to calls by the Opposition to re-tender, he said, “The contract was already awarded. It was a design-build-operate-maintain contract to a TriniTrain consortium. It’s a consortium that is quite capable, quite reputable. They are quite capable of doing all the stages, including building the trains and operating them and maintaining them.
“They were given a contract to do all of it, but the contract was phased, so at the end of phase I, you could decide if you should proceed to phase II or not. Although we had spent about $500 million, we knew we couldn’t find $60 billion, so we had to say no to Phase II. There was no need to re-tender, or to go out for tender because you (the previous administration) already awarded the contract.
“Of course, you could have decided that you want to take all the designs and go out to tender for somebody else besides that, but you (the previous administration) already awarded the contract. Why would you do that? You already chose the contractor that you want to build it. So I don’t understand. I think he (Rowley) is mistaken. I think he was misinformed. That’s the only explanation I could imagine for what he said. That this is really the worst example that you could possibly choose.”
Charles said, “It’s not that we can’t have rails, you know, or we can’t have a train system, you know. That’s the point I want to make. It’s not that we can’t have it, but this particular one, obviously, couldn’t be done. What you could have decided was to do a feasibility study first, which would tell you what kind of rail system you really want to introduce here. For example, our geo-technicals, the contractor said, are really bad, our soils are really difficult soils, even in that area for a train, because the train requires very heavy foundations, so that added to the cost.
“If you were to do light rail, you wouldn’t have that problem. So you could design a lighter rail system. You could use a more limited area and you could get something within your affordability. So we can have trains in the country, but we couldn’t have that project. We couldn’t have that rapid rail project.”
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