Bridge evolution

$55 million

The Memorandum of Intent from late 2002 set out many of the principles that would be in the actual Concession Agreement five years later. It specified a maximum total project cost of $55 million, including $5 million of allowed equity and the 4.5%+15% equity return levels. The cost in the 2003-2005 period was reported variously up to $60-$65 million. I'm not sure how the DCBC came up with the estimated construction cost - presumably some sort of costing was done based on the bridge designs, but no tendering was done before late 2005, and I don't know if the the construction cost was ever actually viable.

It should be especially noted that the lease period was 35 years right from the start, and the projected toll rate of up to $6/tonne has not changed, except for inflation adjustments, so toll revenues would have been the same. But with only $50-$60 million of anticipated debt financing, there would have been much more revenue to the DCBC in this first version of the project. How much would have depended on interest rates, the size of the loan and how aggressively the loan was amortized. But a very quick back-of-the-envelope approximation (with interest rates 1% higher than the 2008 financing) indicates that $5 million in equity would produce tens of millions of (2002) dollars over 35 years to the DCBC, with perhaps $10-$15 million back to the GNWT, even with traffic at the somewhat depressed 2012 levels. The numbers might be a bit smaller if something less than $6/tonne was used, but on the other hand traffic volumes were expected to be rather higher.

Basically, the outline seems to be this:

• The toll charges were thought to be reasonably neutral overall to community freight (although a cost to the mines).
• The DCBC would get a very healthy slice from the tolls.
• The GNWT would have a bridge service for no more than they were paying for the ferry, and get the bridge itself after 35 years.

$170 million

A couple of rounds of tenders in 2005/2006 didn't produce an acceptable price - it would be fascinating to know what the tender amounts were. In any case, the project was shelved, and by 2007 the construction price was in the $135 million ballpark, or $170 million with all costs. When the GNWT revived things with a subsidy offer the numbers were rather different from the previous incarnation.