Difference between revisions of "Bridge Costs"

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(updated for 2012 additional $10 million)
(updated for $202 million+)
 
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The cost of the Deh Cho Bridge is often referred to these days as '''$192 million''' - the current construction budget.  But the government didn't just plunk down that much money from its piggybank.  It's just like buying a house - there was a loan, and the payments will eventually cost much more than $192 million. There are other costs, but also toll revenue and money saved by not running a ferry.  I've put these together in a calculator that let's you see how the numbers look.  
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The cost of the Deh Cho Bridge is often referred to these days as '''$202 million''' - the current construction budget.  That number does not include the amounts ($6-13 million) being paid by the Government of New Brunswick) used to redo work from the original Atcon contract,  or a million or two in other costs, so the cost to ''build'' the bridge is '''$210+ million'''.  But the government didn't just plunk down that much money from its piggybank.  It's just like buying a house - there was a loan, and the payments will eventually cost much more than $202 million. There are other costs, but also toll revenue and money saved by not running a ferry.  I've put these together in a calculator that let's you see how the numbers look.  
  
 
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Latest revision as of 13:26, 3 December 2012

The cost of the Deh Cho Bridge is often referred to these days as $202 million - the current construction budget. That number does not include the amounts ($6-13 million) being paid by the Government of New Brunswick) used to redo work from the original Atcon contract, or a million or two in other costs, so the cost to build the bridge is $210+ million. But the government didn't just plunk down that much money from its piggybank. It's just like buying a house - there was a loan, and the payments will eventually cost much more than $202 million. There are other costs, but also toll revenue and money saved by not running a ferry. I've put these together in a calculator that let's you see how the numbers look.

click here to go to the

Bridge Calculator

The Bridge was originally financed with $165 million worth of bonds, and the repayments, with interest, over the next 35 years will be the current equivalent of almost $300 million. There's also the $36 million in cost overruns the GNWT has had to pay for - which takes that 35-year total to around $335 million. Like buying a house - you may refer to the price you paid, but you also have to know what your mortgage payments are going to be. In this case, it will be the equivalent of an average of $8.5 million per year. The extra $46 million can be considered as the down payment!

Also like a house, there's various annual running costs besides the mortgage payments. For the bridge, these relate to maintenance, toll collection, etc. They will probably be around $800,000 a year. That takes the 35-year cost of ownership past $360 million.

On the other side of the ledger, getting rid of the ferry and icebridge saves $2.7 million in annual costs, or around $94.5 million. There will also be toll revenues, although although the exact amounts will depend significantly on mining activity in the future. A reasonable range might be $160-$190 million.

So balancing out the costs, savings and tolls, the net 35-year cost of the bridge to the GNWT might be $75-105 million. At that point, it owns a bridge with another 40 years or so of life, and can continue generating tolls if it chooses.

Toll revenue comes from shippers (and their customers), and what value they place on having a bridge is a separate question.