The Central Corentyne Chamber of Commerce (CCCC) last month wrote the Government of Guyana regarding the possibility of it (government) taking over ownership of the bridge to reduce tolls but President Irfaan Ali has ruled this out.
Ali on Monday in Berbice emphasised that if there is a part the government can play in reducing the tolls then this will be done.
Ali, who held three community meetings on Monday in Region Six, explained that his government believes in a “free and open society” as such “government can’t go and take over the bridge.”
However, he assured that his government is willing to work with every single stakeholder, “and if it is that the shareholders of this bridge want to speak with the government then believe you me, you have a government that is willing to listen to them that we can make the best possible decision in the interest of you, the people of this region and people of this country, that I can assure you.”
The President then asserted, that if the government can play a part in reducing the bridge toll then “you can believe the last dollar you have that this is a government that will embrace that action”, because his government wants to “remove as much hardships” from the lives of Guyanese as possible.
The CCCC in its letter to Minister of Public Works, Juan Edghill, on March 29 which was copied to President Ali, Attorney General Anil Nandlall, and Senior Minister in the Office of the President with Responsibility for Finance, Dr Ashni Singh, pointed out that the APNU+AFC after assuming office in 2015 had reduced the toll to cross the Berbice Bridge for a regular vehicle from $2,200 to $1,900 “and had made a pledge to take measures annually thereon to have the tolls reduced to an amount considered acceptable to users of the bridge.”
However, the Chamber pointed out that this never materialised and that the APNU+AFC government was then voted out of office. “The present tumultuous period in the world during the pandemic and now post-pandemic resulting in serious disruptions of the world supply chain has given rise to significant inflation worldwide and of which Guyana is no exception,” the letter stated.
The Chamber also commended the present government for removing the entire excise tax on fuel and subsidising the cost of water and electricity, stressing that “to further help in alleviating the cost of living in Berbice, we feel a significant reduction – a minimum of 50% cost in the bridge tolls should be facilitated.”
However, the CCCC acknowledged that presently it would not be feasible for the Berbice Bridge Company Inc (BBCI) to grant such reductions that could have a “tangible economic impact” on the lives of Berbicians and every citizen using the bridge. “For this reason, we are humbly requesting that government negotiate with the owners of the bridge with a view to have one hundred percent ownership. Having achieved this, a toll can be computed with consideration towards the administration and maintenance of the bridge.”
Meanwhile, Stabroek News was informed that following the letter, CCCC President Mohamed Raffik had a meeting with Minister Edghill and others.
In 2018, the (BBCI) announced plans to implement massive toll increases which were to take effect from November 12th, 2018. Then Minister of Public Infrastructure, David Patterson, however, referred to the planned increases as unconscionable, and caused to be issued a Toll Order by which he froze the toll fares of the BBCI. BBCI, as a result, filed an application in court in 2018 claiming that Patterson is not required by law to approve toll increases, had no lawful authority to prevent the company from moving ahead with its planned increases, and asked for his action to be quashed.
In December 2019, Justice Roxane George-Wiltshire dismissed the bridge company’s application to quash the Toll Order by Minister Patterson which prevented it from implementing planned increases.
The Chief Justice, in dismissing the application, also ruled that Patterson’s action did not amount to a takeover of the bridge, as was claimed by the company in its application. BBCI then appealed this decision.
The BBCI deal which had been struck by the Jagdeo administration has been widely criticised. In 2015, former Auditor General Anand Goolsarran urged that it be restructured. Writing in his accountability column in this newspaper, Goolsarran had called for the shareholders agreement for BBCI to be scrapped and replaced by one which reflects proportionality in investment.
“The first is that the financing of the Bridge’s operations is in urgent need of restructuring so as to reduce costs and hence to provide the much-needed relief to commuters. At the moment, the BBCI is too highly geared, meaning that there is too much debt (as opposed to equity) which has to be serviced from the revenues of the Bridge. Second, the Government must be allowed to have a say at the level of BBCI board that is commensurate with its investment. The current Shareholders’ Agreement therefore needs to be scrapped and replaced by one that reflects proportionality in investment”, he asserted.
Noting that various figures have been quoted for the cost of construction of the Berbice River Bridge ranging from US$38 million to US$41 million, Goolsarran said that this does not include the cost of the feasibility study of US$1 million as well as the US$11 million outlay on the construction of the access road on both sides of the river, financed by the IDB as a loan to the Government of Guyana. Further, some $85 million was expended by government holding company NICIL to meet various costs associated with the Bridge. Using the lower figure for the direct construction cost of the Bridge, Goolsarran said that the total project cost works out to US$50.410 million.
The direct construction cost, equivalent to $7.874 billion, was funded from a mix of financing comprising debt of $6.484 billion, and equity of $1.350 billion. Goolsarran said that this gives a debt to equity ratio of 83:17.
“The BBCI is highly geared and therefore interest charges are an important consideration in determining the financial viability of the company. We know that the company is yet to pay dividends to its shareholders, including the cash-strapped National Insurance Scheme. The company is reported to have accumulated losses totalling $1.5 billion as at the end of last year and could face insolvency. Was the company not aware from the very inception that the present financing arrangement will pose significant challenges in terms of the financial viability? Or, was BBCI hoping that, given its monopoly status, it could increase tolls to meet shortfalls in revenue vis-à-vis expenditure?”, Goolsarran queried.
Hand in Hand Fire Insurance Company Limited, New GPC Inc and Queens Atlantic Investment Incorporated are among the major shareholders in BBCI.
