Govt in talks with investors for acquisition of Berbice Bridge – President Ali

…VP says engagement likely with bus and taxi operators to lower fares

President Irfaan Ali has disclosed that negotiations are ongoing with the private investors in the Berbice Bridge Company Incorporated (BBCI) on a possible buyout.
“We’re in the final stages of that [negotiation]. The Minister of Finance is leading that, and we will be working towards inking an agreement after the elections so that the responsibility of the bridge will be that of the Government,” Ali told the Guyana Times on the side-lines of an event on Thursday.
According to the President, the goal is to ensure there is an “amicable” agreement between the private investors and the state.
“Investors must have the opportunity to negotiate, and if there’s a buyout, then they must have their… concerns dealt with, so we have a very good process that is ongoing,” he explained.
The Berbice River Bridge, a critical link between Region Five (Mahaica-Berbice) and Region Six (East Berbice-Corentyne), was constructed between 2006 and 2008 through a public-private partnership at a cost of just over $8 billion.
The 1.57-kilometre (km) bridge was financed mainly by the state-run National Insurance Scheme (NIS) along with other private companies. It was conceptualised and constructed under the Bharrat Jagdeo presidency.
In fact, Jagdeo, who now serves as Vice President (VP) in the current PPP/C Administration, just last year had to defend the innovative financing model used for the bridge.
“It was one of the most lucrative investments for the NIS. NIS made a tonne 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 had stated last September.
NIS had invested in Bond One of the project to the tune of $300 million. The scheme received (not principal payments) $270 million, a 90 per cent return on their investment. It 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) and $456 million, while preference shares invested were $950 million. Some $80 million was further invested in common shares.
Under the previous A Partnership For National Unity + Alliance For Change (APNU/AFC) Administration, there were talks of a possible state buyout of the BBCI to avoid the increase of tolls.
However, the then Public Infrastructure Minister David Patterson had refused to meet the BBCI Board to discuss the Government’s buyout offer. This was after the BCCI had taken court action against the State after the then Public Infrastructure Ministry took over operations of the bridge to stop the toll hike in 2018.
On November 5, 2018, the then APNU/AFC Government took over operations of the facility.
In fact, the BBCI had cited the Coalition administration’s persistent refusal to respect contractual obligations under the Concession Agreement to come to the table and address the annual adjustments to the bridge toll that the BBCI said it was forced to resort to the court.

Engaging public transport operators
Nevertheless, the current Ali-led Government on August 1 introduced its toll-free initiative, which saw the removal of fees to cross not just the Berbice River Bridge but also the Demerara Harbour Bridge and the Mackenzie-Wismar Bridge in Linden.
Over the years, there had been numerous complaints about the high tolls to cross the Berbice Bridge.
However, now that the bridge tolls are removed, there have been calls for public transportation operators like minibuses and taxis to lower their fares as well, especially for the Berbice route.
Speaking at his press conference on Thursday, VP Jagdeo says that such an engagement is likely between the Government and the operators.
“I think we should have a discussion with them,” the VP stated, but cautioned that Guyana operates a free-market economy; hence, the Government does not dictate prices.
“But we should constantly have discussions because we want them to do well too… They should be able to earn a living,” Jagdeo stated.
Since the removal of the bridge toll about one week ago, some operators plying the Number 56 minibus route (New Amsterdam to Rosignol) have reduced their fares from $300 to $200 per passenger, but others, especially the taxi/car operators, have refused to follow suit.
In fact, hire car operators plying the New Amsterdam-Georgetown route have refused to drop their fares, which increased from $1500 to $2500 during the COVID-19 pandemic and never returned to pre-COVID levels. Some drivers even demand as much as $3000 after dark. Defending their position, the car operators argue that the price for spare parts has increased.