Dear Editor,
The Kaieteur News Editorial (26.10.18) headlined Berbice Bridge Controversy reflects the newspaper’s persistent assault on the truth. In fact, the newspaper persists in publishing lies.
The BBC1 is bound by its Concession Agreement under the Berbice River Bridge Act in implementing the tolls charged at the Bridge. The Company has no alternative but to honour the Toll Adjustment Formula prescribed in the Agreement. The Company has no discretion in calculating the amount of the toll. The Company is bound by the Toll Adjustment Policy dictating the Formula.
Since 2015, respective governments (previous and present) have violated their contractual obligations to implement an annual toll adjustment which would have resulted in small incremental adjustments instead of the current burdensome level. The Kaieteur News has chosen to ignore this truth.
The current level of toll adjustment is entirely the fault of the government, not the Company.
Prior to and since taking office, this government has refused to meet with the BBCI in spite of three requests to do so. The power and the privilege to review or amend the Concession Agreement rest entirely with the government. The Kaieteur News has chosen to ignore this truth.
The Kaieteur News has then lied about the shareholding of the Company. The Kaieteur News claims that the “majority shares of BBCI is owned by the NIS and control is in the hands of private entities’’. This is a lie.
The NIS is not the majority shareholder. No single shareholder (Company) owns the majority of shares.
The ownership of the BBCI is shared between six (6) investors as follows:
In an eight-person Board of Directors, six are ordinary shareholders, including the NIS, one is a preferential shareholder (the NIS) and one subordinated loan holder (including the NIS). The last two categories, preference shares and subordinated loans, have no general voting rights.
The Kaieteur News claims that the “contract was structured to allow investors with disproportionately small investment to control the asset”. As is obvious, this is another lie.
The Kaieteur News claims that “in its first year of operation the BBCI collected G$1.4B in revenue”. This is yet another lie. In its first full year of operation (2009), BBCI earned G$946M. In truth, after nine years of operations, BBCI’s annual toll revenue has never exceeded G$1.372B.
The Kaieteur News claims that the “Contractual Agreement was clearly designed to make a few people wealthy at the expenses of the masses”. Yet another Kaieteur News lie. First, the six ordinary shareholders are not guaranteed a return on their investment. Their investments are subjected to the risk of the company making a profit and cash flow availability. Since BBCI has made no profit, no dividends have been paid to any of the shareholders. Even if a profit is made, the payment of any dividends is at the discretion of the Directors, after taking into account the cash flow position of the company. The truth is that from the inception of the Bridge, the NIS, whose investments represent every Guyanese citizen, has earned 94% returns on its total investment, i.e. G$2.4B. Because of the shortfall in revenue resulting from government’s refusal over the past three years to make toll adjustments, the BBCI has been able to pay the NIS only G$1.7B of the returns earned from its G$2.59B investment in BBCI and G$222M in principle repayments.
In the meantime, it would be of interest to the public to know that BBCI asked the Private Sector Commission to use its good offices to arrange an urgent meeting with the Minister of Finance in the matter of the toll adjustment and that the Minister of Finance has refused to entertain the request.
Yours faithfully,
Paul Cheong
Vice Chairman of Board of Directors
BBCI