…says 40-year contract period means no increases
With just a week to go before toll increases are slated to go into effect, the Berbice Bridge Company Incorporated (BBCI) has made a major offer to the Government.
The Company has offered Government a chance to extend the life of the contract to spare commuters toll increases.
In correspondence to Public Infrastructure Minister David Patterson, BBCI Finance Controller Stephen Rambajan requested a meeting with the Minister on the Board’s behalf and in the public interest to discuss the terms of this offer.
According to the offer, BBCI is seeking an agreement to extend the contract period to 40 years. This extension, according to Rambajan, will make it unnecessary to implement the toll increases the company announced on October 16, 2018.
“We believe that such an extension, with full Government support, will provide BBCI the opportunity to approach its lenders to re-negotiate terms and conditions of the various debts. If these negotiations with the lenders are successful, it will provide much-needed relief to the cash requirement burden and, therefore, the need for toll increases at present and in the future.
“We are convinced that this proposal will allow the tolls to remain as is and provides opportunities for toll reduction in the near future, removing the need for Government subsidy to the tolls and maintenance of pontoons,” Rambajan stated, adding that BBCI would withdraw the toll hikes once a mutual agreement is reached. The letter has a stipulation that the meeting take place before November 11. The increases are to take effect from November 12.
Cabinet to consider offer
Speaking to Guyana Times on the particulars of the offer, BBCI Communications Consultant Kit Nascimento on Sunday revealed that after the correspondence was sent, he was informed the offer would be taken to Cabinet.
“We’ve written to Minister Patterson … to find a solution to the issue of the tolls and we’re pleased that he has responded saying that he is forwarding it to Cabinet for consideration,” Nascimento revealed.
Meanwhile, he also reiterated that the BBCI’s last meeting with Patterson in October did not address the tolls. According to Nascimento, the Minister was only prepared to address maintenance of the pontoons and not the tolls.
Recently, the BBCI announced toll increases that would take effect from November 12, in a bid to raise money and avoid defaulting on loans. The increases were announced by BBCI Chairman, Dr Surendra Persaud, during a press conference.
Persaud told the media that the Bridge Company was formally informed by Minister Patterson that Government would not agree to its previous requests for an increase.
Patterson had called a hasty press conference right after the news of the increase broke. There, he had informed the press that all options, including the legal route, to stop the increases, will be considered.
The Government has been resolute in saying it will not agree to toll increases and has instead pointed to its servicing of the Bridge’s pontoons as a way it is mitigating the crisis. BBCI has maintained that this arrangement is not sufficient for it to meet its financial obligations.
Last week, BBCI Vice Chairman Paul Cheong came out swinging at the Government, noting that the Company was bound by its Concession Agreement under the Berbice River Bridge Act in implementing the tolls charged. The Company, he said, has no alternative but to honour the Toll Adjustment Formula prescribed in the agreement.
According to the Vice Chairman, 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 current level of toll adjustment is entirely the fault of the Government not the Company, he noted, adding that 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 Government has come in for its share of criticism of its handling of the matter.
Outspoken political activist and former Presidential Advisor Ramon Gaskin, a trained economist, is suggesting a total buyout of the Bridge by Government so as to resolve the issue.
Overseas-based economist, Professor Tarron Khemraj also believes that Government should buy over the Berbice Bridge in its entirety. He said the Bridge was now financially unsustainable, as compared to when the proposal for its construction was implemented.
While several financial analysts have recommended the Government buy out shareholders, the Federation of Independent Trade Unions of Guyana (FITUG) had urged the Government to have a sit-down with the BBCI to find a solution for the toll increases.
