The management of the National Insurance Scheme (NIS) has met with the Berbice Bridge Company Inc (BBCI) on the call by the government for the lowering of the Berbice Bridge tolls but both sides are mum on the content of their discussions.
Stabroek News was told by both Chairman of the NIS Dr Surendra Persaud and Chief Executive Officer of BBCI Omadat Samaroo that the bridge management had met with that of the NIS.
Persaud told Stabroek News last week that the NIS board is yet to meet officially since coming into being in July and as such he would not be commenting on the ongoing deliberations between the BBCI and the government on the lowering of the tolls. He would only state that a meeting did occur.
Samaroo spoke with Stabroek News briefly stating that “nothing has happened as yet” while adding that he could not disclose what was discussed between the bridge and its major shareholder, the NIS.
Amid the APNU+AFC government’s call on BBCI to lower the bridge tolls, the company had written to the NIS and other shareholders seeking their positions on the proposal.
In a letter dated Septem-ber 14, received by NIS General Manager Doreen Nelson on September 17, Samaroo stated that should there be no response from the NIS before or by September 22, 2015 the company will assume that the NIS has abstained from the process.
In the letter, Samaroo apologized for the short notice while requesting that the NIS indicate yes or no as to whether the BBCI should go ahead and accept the government’s proposal or whether the BBCI should refuse and continue with negotiations. The letter also requested that the NIS signal whether there should be a general meeting of shareholders and financiers to determine a collective position or if the BBCI directors should make this decision as the NIS’s appointed representatives on the Board.
The lowering of the Berbice Bridge tolls had been a manifesto promise by the APNU+AFC government. Earlier this year, it decided that a subsidy would be paid to BBCI to offset the loss of revenue. BBCI has however counter proposed that tariffs should be increased or the concession period for the bridge extended.
NIS has $950 million in preferred shares in the Berbice Bridge and an additional $80 million in regular shares. The total investment in the bridge by the NIS is well over $1 billion. Earlier this year the company had written to the NIS stating that it was unable to pay dividends for 2014 as the company did not make a profit.
A source told Stabroek News that the bridge’s management has maintained that a profit is not being made and as a result the source said that the government is looking at all possibilities should its toll lowering proposal not be accepted.
BBCI has said that given the current structure of the Toll Formula, without the much needed adjustment to the financial model, the cash shortfall this year is estimated at $600 million. The 2015 budget allocated $36 million for a bridge subsidy from September to the end of the year.
In his budget speech on August 10, Finance Minister Winston Jordan had announced that from September 1, the toll for passenger cars and buses crossing the Berbice River Bridge would be reduced by $300, from $2,200 to $1.900, while the toll for all other types of vehicles would be reduced by 10 per cent. The tolls have not been reduced because of the stalled talks and the government has since introduced subsidised river taxis to travel the route.
