Berbice Bridge proposal for Cabinet discussion Tuesday

Given the recent announcement made by the Berbice Bridge Company Inc (BBCI) of a proposed increase in tolls, the Government, through its Public Infrastructure Minister David Patterson, has strongly opposed an increase, but due consideration may be given to this matter at Cabinet on Tuesday.

Nevertheless, Patterson made it clear that Government was already subsidising the Bridge and giving more financial support to it might be a major task.
He added that the coalition Government had an obligation to the people of Region Six (East Berbice-Corentyne) to ensure that there were no increases.
“We have a commitment to the people of Berbice. The Berbice Act that was passed stopped any other means of transporting cars across the Berbice River. So, therefore, obviously it is the Bridge, and obviously, we can’t leave persons stranded. And we have to do whatever we have to, to ensure that it is sustainable.”
That, therefore, leaves the Government with no option but to subsidise the Company. Despite rejecting the proposed 300 per cent increase in tolls, the Government said that it would continue to work with the BBCI in ensuring that the Bridge was sufficiently maintained and safe for vehicular and marine use.
“It‘s something that will come up for discussion at Cabinet. So, it’s not about an election promise, but our concern for the Guyanese people, because no-one can pay that level of toll that has been proposed,” he said, stating that there must be provisions for other matters other than paying investors.
Based on the announcement made by the BBCI with regard to the proposed increase in tolls, Opposition Leader Bharrat Jagdeo has announced his disagreement with the proposal, but has since encouraged the coalition Government to buy more equity in the Company.
Jagdeo reasoned that Berbicians could not afford the steep increases that the Company has proposed at this time. He said this was mainly so because the BBCI was contractually obligated to maintain the Bridge. Instead, he thinks that Government could buy out other shareholders, so the Bridge becomes publicly-owned.
“Secondly, subsidise the increase that should take place in the toll, so they give an injection into the Company so the rate remains flat.” This formula, according to Jagdeo, would entail taking over the debt of the Bridge and securing greater equity in return.
But Patterson said while this was not something Government was totally against, it has caused some delays in the past. He recalled that when the Government approached a shareholder (Demerara Distillers Limited) to buy its shares, it took some time before a decision was made as to whether they should sell.
“It took a year before the shareholder voted and gave us permission to buy the shares. I think one of the problems at that time is that DDL bought shares at $40 million and they sold it for $45 million. The 24 per cent persons didn’t want to have a precedent yet, whereby they make a minor profit on it,” he added.
The Minister explained that Government was made an offer by another shareholder who was interested in selling his shares, but under the condition that he got all the profits he would have been entitled to for the entire period of over 20 years. Patterson said the proposal was not feasible and, therefore, Government could not give it due consideration, as it would have cost an exceptional amount.
The Company’s Chairman, Dr Surendra Persaud revealed that it was now facing bankruptcy following Government’s decision to reduce the toll and subsequent refusal to allow for an increase as per the initial agreement when the Company was formed.
Persaud is also Chairman of the National Insurance Scheme (NIS), which holds a significant amount of shares in the Company. According to him, they have had several engagements with Patterson. Following a previous engagement, Patterson had informed them that a maintenance proposal would be taken to Cabinet.
According to the Chairman, they were subsequently informed that it was not approved. In fact, the Company applied for a toll adjustment on three occasions: twice in 2015 and once in 2016, to no avail. It has since made another such application, dated July 9, 2018. In that application, the Company had requested that the toll increases take effect by August 1.
The new tolls proposed by the BBCI will see cars and minibuses paying $8040 to cross the Bridge; pickups, small trucks and four-wheeled drive vehicles $14,600; medium trucks $27,720; large trucks $49,600; articulated trucks $116,800; and boats $401,040.