Do You Know the Cost?
I'm always amazed at how hard it is to discover the most basic information about the financing of the Bridge. So here's a simple little test. Try and answer as many of the following basic questions as you can - using whatever resources (except this site) you wish - Googling news stories, government info, friends, whatever.
Before you start, the current cost is often quoted as $192 million. This is just the cost of construction - the GNWT is not paying for this all at once though, but over 35 years via a bond issue. You can think of it just like a mortgage on a house - what you pay over the life of the mortgage is much more than the price of the house. So the actual cost is rather higher than $192 million, and if you knew this give yourself a bonus point to start, since this fact (and the full cost) is never mentioned in any news stories.
- How much was borrowed, and what amount will the GNWT have to repay to the bondholders over the next 35 years?
- What are the annual payments, which come out of the GNWT budget.
- Since the bridge has had cost overruns, the bond borrowing will not cover the full construction cost. How much extra has the government spent beyond the bond borrowing?
- The latest one-year delay means no tolls will be collected until fall 2012 at the earliest. How much will the lost tolls and extra ferry season cost the GNWT? Is this amount taken into account in any news story or other resource you can find?
- The government will (presumably) save all the money it currently spends on the ferry and ice bridge. How much will these savings be?
- What are the major influences on how much toll revenue is collected, and what are the likely revenues? This is an advanced credit question, since the answer isn't simple!
- So, the big question: what is the likely net cost of the Bridge to the GNWT budget each year?
My own answers can be found on another page. But if you think these are very basic questions anyone interested in forming an opinion on the Bridge project would want to know, please take a few minutes to see if you can answer them elsewhere. Whatever one's view of the Bridge, my feeling is that the media, government and other groups have done a fairly poor job of providing information for the debate!