B.C. bridge banker short on cash for U.K highway project
A British newspaper is reporting that Dexia, the Franco-Belgian bank involved in financing B.C.'s Golden Ears Bridge project through a so-called public-private partnership (P3) deal, has failed to come up with the cash for a major transportation infrastructure project in the UK.
As a result, the U.K government has been forced to bailout the project with a £4.2 million cash infusion while the construction contractor looks for alternative financing.
Construction of the five-mile Carlisle Northern Development Route is due to start next year but is threatened by the credit crunch.
Franco-Belgian bank Dexia had been lined up to provide up to £142.8m under the Government’s private finance initiative (PFI).
But the bank narrowly escaped collapse this autumn and is no longer in a position to lend the money.
Two months ago, both B.C. finance minister Colin Hansen and Fred Cummings, the Translink vice-president in charge of the Golden Ears project, dismissed concerns that Dexia's problems could spell trouble for the $800 million P3 deal to build a bridge linking Surrey and Maple Ridge.
"[The bailout] provides them with enough guarantees that they will meet their funding obligations," Cummings said. He added the Golden Ears Bridge project, which will link Surrey and Maple Ridge, has already received three-quarters of its financing and the companies involved are "fairly confident their obligations will continue to be met."
If those obligations can't be met, it would spell big trouble for the Translink budget -- already short $100 million it needs to maintain and expand services next year.