Berbice River Bridge was most lucrative investment for NIS – VP

…defends Govt’s toll-free plans for 3 bridges as maintenance cost will plummet

Vice President Dr Bharrat Jagdeo has brushed aside concerns over the People’s Progressive Party/Civic Government’s recent announcements that three major bridges in Guyana will become toll-free in a few years’ time.
Last week, President Dr. Irfaan Ali announced that the toll to travel across the new Demerara River Bridge and the new Mackenzie-Wismar Bridge – both of which are currently under construction, as well as the current Berbice River Bridge will be “free of cost.”
This declaration came on the heels of Government planning to build a new-fixed high-span four-lane bridge across the Berbice River to replace the current floating structure.
Speaking at his party’s weekly press conference at its Freedom House Headquarters on Thursday, Jagdeo lashed out at criticisms that this toll-free initiative is reflective of his government’s “autocratic” tendencies especially since no consultations were held on this decision.
Moreover, these criticisms raised concerns about the financing model of the current Berbice River Bridge, which was conceptualised and constructed under the Jagdeo Presidency. Critics mentioned the lack of a comprehensive analysis on the investment made by key investors, mainly the state-run National Insurance Scheme (NIS).
But according to the Vice President, the Berbice River Bridge was built through an innovative arrangement between public and private investors.
“It was one of the most lucrative investments for the NIS. NIS made a ton of money from that bridge because it invested in a lot of the preference shares that had a higher ranking and the subordinate debt…And we didn’t have to go to the treasury. It was because of the innovation of the government,” Jagdeo stated.
The 1.57 kilometres Berbice River Bridge was built to the tune of US$40 million (GYD $8.2 billion) and was completed in 2008. It was financed by the NIS, which had invested in Bond One of the projects to the tune of $300 million. The scheme received (not principal payments) $270 million, a 90 per cent return on their investment.
NIS also invested in Bond Two, $760 million, and received $823 million in return. The insurance scheme also invested $500 million for subordinate debt (loan stuck) $456 million, while Preference shares invested was $950 million. Some $80 million was further invested in common shares.
Jagdeo pointed out during Thursday’s press conference that government could not have built a fixed structure across the Berbice River at that time because they did not have resources to do so and the country’s borrowing capability at the time was limited. He noted that this public-private-partnership financing model was selected given the importance of a bridge at the time.
“We had to get that bridge built because people were spending hours, sometimes days at the ferry [stelling]…Most people, and especially the young ones, don’t know about the hardships there. It used to be long lines and the price was similar to price that is charged [now as bridge] toll,” he noted.
The former president went onto state that since they lacked the financing, the best option at the time was to construct a floating bridge – any other structure would have blocked the Berbice River. The current bridge, he added, was done with the intention of replacing it at the end of its 20-year lifespan with a permanent structure, which was reflected in the comprehensive feasibility study done back then.
Over the years, there had been numerous complaints about the high tolls to cross the Berbice Bridge and now that Government is moving to remove this cost for travellers, and this is now being criticised.
“They used to complain about the toll there [at the Berbice Bridge] but what’s wrong now with giving people toll-free access… Just imagine if you want to develop Berbice now, and you have the deepwater harbour there and containers start landing there, you can’t bring it back this way because under [the current Berbice] bridge you have weight restrictions. The same thing like the floating bridge [across the Demerara River], you can’t bring heavy trucks across or containers,” the VP asserted.
Jagdeo, who is also the General Secretary of the ruling PPP/C, further sought to dispel some of the other concerns raised about the toll-free initiative such as how these three bridges will be maintained if government removes the toll.
“Every one of these bridges now will be four-lane concrete structures. Two are under construction… This is a 75-years’ life bridge with little or no maintenance. You don’t have moving parts [to retract] anymore so the cost of maintenance plummets… And it’s toll-free so you don’t even have to put [staff] there because people would just drive across,” he explained.
According to Jagdeo, these three bridges are “…essential for the territorial integration of Guyana and also for the development of these regions that are populous – Five and Six, Three and Four… So, what’s wrong with giving toll-free [to citizens]? It’s dictatorship now… Autocratic. Ali announces toll-free [travel across the bridges] not taking away people’s rights or freedom of speech or anything. He said ‘oh, you’re gonna have a benefit from the government and once we finish these bridges, you will not have to pay toll’.”
The Vice President pointed out that when a party is elected to government, the electorate expects them to not only fulfill their manifesto promises but also implement initiatives that would benefit them. “Not everything has to be in the manifesto. We’ve surpassed our [2020] manifesto a long time now…,” Jagdeo asserted. (G8)