Home News Opposition Leader condemns Govt takeover of Berbice River Bridge
Opposition Leader Bharrat Jagdeo has expressed his disapproval of Government’s recent move to take over the operations of the Berbice River Bridge and said it could also create a negative image for Guyana to potential investors here and abroad.
“This issue about nationalisation and taking over private property, we don’t agree with it because we are seeking similar models to construct other bridges, hydro power and everything else,” Jagdeo told reporters on Wednesday at his weekly press conference.
The Opposition Leader questioned whether there is enough justification for the move taken by Government to nationalise the bridge. “Could there be some other remedy? The Minister (David Patterson) already had the remedy in the Act. He did not have to sign the toll order,” he said.
Jagdeo reiterated that any increase in tolls at the Berbice Bridge without the Minister signing the toll order under the Act would have been illegal. As such, he feels Government should not have made such a rash move to take over the operations of the bridge.
Jagdeo, who is also General Secretary of the Opposition People’s Progressive Party (PPP), feels that the decision taken by Government could be seen as a clever political move. He said, “it was contrived to get the entire media to play it out until November 12 so there is no focus on the other issues… the bridge issue is now dominating daily news headlines.”
The Opposition Leader reminded members of the media that the issue started with Berbice Bridge Company Inc (BBCI) Chairman, Dr Surendra Persaud, who also happens to be Chair of the National Insurance Scheme (NIS) and a member of the Alliance For Change (AFC).
But he recognised that the focus has now been shifted, and blame is now being placed on the PPP, even in light of the fact that the BBCI is in breach of the agreement to increase tolls by over 300 per cent and a request made to extend the life of the agreement for 19 years.
Jagdeo said the request from the company cannot by any means be justified, because it has been made clear that revenue is performing better than what was predicated in the concession agreement.
“So, clearly the company has to justify in very clear detail why it has not met its obligations to the shareholders and the investors, because they are two groups,” he noted.
Further, he made reference to statements made by Finance Minister Winston Jordan who claimed that the project was flawed, and sections of the media that reported that the bridge was used as a cash cow.
Jagdeo explained that the National Insurance Scheme (NIS) had invested in Bond One of the project $300 million. The scheme received (not principle payments) $270 million, a 90 per cent return on their investment. If they invested in treasury bills it would have been far less.
NIS also invested in Bond Two, $760 million and received $823 million in return. The company also invested $500 million for subordinate debt (loan stuck) $456 million and is now owed $207 million. Preference shares invested was $950 million. They were paid back $163 million and are owed $507 million. Some $80 million was invested in common shares with zero returns so far.
“…these are the only instruments that have had a return on investment,” he added.
Jagdeo said if there should be modifications to the existing agreement, he would support a two- or three-year extension or even for the tolls to remain the same until the life of the agreement ends.
The BBCI has criticised the Government’s unlawful move to take over the bridge and has demanded answers from Minister David Patterson. It noted that based on the legal advice it received, Toll Order 2018 to take over operations of the Bridge was unlawful under the Berbice River Bridge Act.
Slap to public-private
However, the Government’s unilateral decision did not go down well with BBCI Vice Chairman Paul Cheong, who on Monday told Guyana Times such an arbitrary move was a slap in the face of all public-private partnerships.
Speaking with this publication on Monday, a very livid Cheong said, “The decision came as a shock to us and, so we are working with our lawyers to weigh our legal options. I have a meeting with our lawyers tomorrow (Tuesday). This is a slap on the whole Private Sector… this is something bigger than toll increases… it is a slap to all public-private partnerships… it was a model project for private-public partnership and so the Government will have to be responsible in its actions.”
But on Monday, several members of the Private Sector were on edge, as, according to a leading businessman, the move by Government did not augur well for investors in Guyana.
Dip in confidence
Last week, the World Bank’s 2018 Report signalled a dip in investors’ confidence in Guyana. This year, Guyana placed 126th in the global rankings. Last year, Guyana ranked 124th, while in 2015, the nation ranked 140th.
The Ease of Doing Business Index is one of the most comprehensive studies done by the World Bank.
In determining ease of doing business, the World Bank looks at key indicators such as registering, compliance, taxation, obtaining loans and similar factors such as administrative procedures. It also looks at legal measures, such as protection and settlements.