Bridge Projections

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This is my guesstimate of the basic numbers for the Bridge project during the lease period, based on my Bridge Calculations spreadsheet. All figures are in millions of dollars, and have been adjusted to 2010 constant dollars.

The "NOW" column for the "low" traffic forecast would be the likely current scenario.

Lease Period Summary

Traffic Forecast 2006 PROLOG low range 2006 PROLOG high range
Original NOW Original Now
Additional Debt 15.0 15.0
Equity 4.3 1.4 4.3 1.4
         
Total Tolls 188.8 188.8 250.7 250.7
Subsidy Contributions 140.0 140.0 140.0 140.0
Total Revenues 328.8 328.8 390.7 390.7

Principal -171.0 -171.0 -171.0 -171.0
Interest -113.3 -113.3 -113.3 -113.3
Total Debt Service -284.2 -284.2 -284.2 -284.2
         
Operating Costs -21.0 -12.3 -21.0 -12.3
         
DCBC Equity Return -14.7 -5.6 -49.3 -38.7
         
Gross Cost -319.9 -302.0 -354.5 -335.1
GNWT Returns 4.4 3.6 32.1 34.5
Net Cost -315.5 -298.4 -322.4 -300.7

Comments

The "Net Cost" is somewhat misleading, because the tolls are to some extent offset by the benefits of the bridge, which aren't reflected here. Whatever the argument over their exact nature, the value isn't zero. The Cost Benefit Analysis attempts to quantify these.

For the low-traffic case, the last of the GNWT's extra $15 million gets paid off near the end, around 2043. With greater traffic volumes, or no DCBC equity it would happen sooner (the high-traffic estimate would make it around 2027).

Assumptions

  • Traffic Availability Date - I've assumed October 31, 2011, a suitably spooky date.
  • Amortization - I've used a straight amortization for the $165 million debt, indexed to 2008 when it was issued, with semi-annual principal repayments beginning December 1, 2011. Different amortization could produce different results.
  • Partial Year - I've assumed the December 1, 2011 principal and interest payment are handled by this process, which tends to put a $2.5 million dollar hole in the partial first year, since there are only a couple of months of toll revenue. If the Construction budget includes an allocation for this payment, there will be a corresponding improvement in the numbers.
  • Equity - For "Original", $4.3 million, and for "Now", $1.4 million. I've run it as if the GNWT doesn't "buy" equity in its own project, but instead puts all extra money in as Additional Funds. If they take the equity stake the numbers might change slightly. If the DCBC equity is bought out, those monies would be added to the GNWT as well.
  • Traffic Forecasts - "Low" is the "Conservative" forecast from the PROLOG 2006 report, and "High" is the "Probable".
  • Annual Operating Costs - $600,000 for the "Original" forecasts. For "Now" I've used $350,000 as that was a number thrown out by the Minister of Transport during the debate.
  • Inflation - I've assumed an arbitrary 2% inflation, although it isn't a big factor since everything except the equity return is indexed to inflation.
  • Interest - Additional Funds Outstanding are charged interest at the current GNWT short-term rate. I've assumed this at 3%.
  • Sanity - assumes my calculations bear some resemblance to reality and the old NorthernRaven isn't as crazy as a loon. Debatable.