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Govt must justify $7.2b highway

Tuesday, March 22, 2011

In  the  latter  days  of  the  last  administration  of the People’s National Movement (PNM),  a  great  deal  of  public  concern  was  expressed about the expenditure of public funds on high-profile state projects such as the Alutrint smelter in La Brea and the light rail network. Especially as it relates to the proposal to reintroduce a public, passenger rail service in Trinidad, there were many calls on the then Government for the publication of the feasibility studies and the cost benefit analyses, which would have justified the expenditure of public funds estimated to be between $12 and $20 billion on what quickly came to be known as the rapid rail. Given the vast capital expenditure and the significant recurrent cost of maintaining a rapid rail system, those calls on the PNM administration for more financial and economic information were entirely appropriate. The funds that the Government proposed to spend on the rapid rail, after all, belonged to the people of Trinidad and Tobago. It is quite likely, as well, that the taxes raised from individuals and companies operating in this country would have gone to repay the loans that the Government of the time proposed to borrow to facilitate the rail system.

If the scrutiny brought to bear on the rapid rail project was appropriate and justified, it stands to reason that a similar level of scrutiny should be required of the proposed $7.2 billion highway from San Fernando to Point Fortin. The Government proposes to spend $5.2 billion on the construction of a four-lane divided highway comprising segments totalling 47 kilometres in length and 2.5 kilometres of two-lane highway including connector roads. The Government has also budgeted to spend $2 billion in land acquisition costs. While we are not qualified to offer an opinion on whether $140 million a kilometre for a highway from San Fernando to Point Fortin constitutes justifiable expenditure, there are some points that can be made. As Cabinet ministers have continually reminded the population—and as the Prime Minister reminded the nation once again last night at the news conference following her return from her state visit to London—the ability of the Government to pay is based on the state of the economy.
This argument, of course, has been put forward in the context of the negotiations between the State and the Public Services Association.

But the argument can be applied to the capital expenditure requirements of the highway just as much as the recurrent expenditure demands of the public servants. The money that the Government intends to borrow to construct the highway will eventually have to be repaid—and with interest. This is likely to be hundreds of millions of dollars a year. The direct issue for the Government—and for the people of this country—is whether the highway can generate enough business opportunities and enough savings from the reduced time to come close to justifying the expenditure of $7.2 billion. It is quite likely that the Government sees the construction of the highway from T&T’s second largest city to the community in which Atlantic LNG, the country’s single largest revenue source, is located in the context of its plans to create a major growth pole in southwest Trinidad. The population would only be able to form a proper judgment on whether (or if) this highway is a billion-dollar road to nowhere or a potential growth pole on the basis of a scientific cost-benefit analysis that takes all the possible scenarios and permutations into consideration. Such a cost benefit analysis is recommended to the Government before it commits the country to the expenditure of billions of dollars. In that context, too, we call on the Government to publish and disseminate the findings of the multi-million-dollar Comprehensive National Transportation Study—conducted by the lead firm of Parsons, Brinckerhoff, Quade and Douglas and submitted in November 2006—for the purpose of initiating a public discussion or consultation on the issue of national transportation.


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