The Government has rejected the proposal of a 150% increase in tolls for the Berbice River Crossing.
The Government in a statement yesterday said that it stands by its decision to reduce tolls, in fulfilling a campaign commitment, and will continue to work with the Berbice Bridge Company Inc. (BBCI) in ensuring that the Bridge is sufficiently maintained and safe for vehicular and marine use.
The statement disseminated by the Ministry of Public Infrastructure, (MPI) was a response to comments, made by the Berbice Bridge Company officials, who are seeking a 150% increase in tolls.
The missive came moments after Chairman of BBCI, Dr. Surendra Persaud, told a media conference of the struggles the company has endured in keeping the Berbice Bridge afloat.
The bridge was constructed under a Build, Own, Operate and Transfer (BOOT) scheme, a public-private partnership venture.
The construction of the bridge under the Bharrat Jagdeo administration, while widely welcomed, was heavily criticized because a few private investors were allowed almost total control, though putting up only a fraction of the almost US$45M used to build it. The Government of Guyana is the largest investor, but can take control only after 20 years.
However, with the private investors alone receiving dividends, the privately-owned bridge has been facing a major problem with maintenance, or the lack thereof, particularly as it regards to the pontoons.
As such, the BBCI has been reaching out to the Government to increase the tolls.
The Government yesterday reassured all Berbicians and users of the Berbice Bridge that it is not contemplating any increases to the Berbice Bridge toll.
Further, the government stated that any request for toll increases must take into consideration a wide array of factors, and cannot solely be on the basis of recouping operational costs and profits on the dividends.
“The Bridge Agreement places obligations on all parties, which include scheduled maintenance and associated upgrades,” the government said in its statement yesterday.
Dr. Persaud in his capacity as Chairman of the BCCI had earlier told the media that the contractual agreement does not give the players much of a choice.
“This formula is contained in a fourteen (14) page document, an addendum to the Concession Agreement, called the ‘Tolling Policy’, which is the sole authority on the determination of tolls.
The toll adjustment is an essential requirement to ensure that the bridge company can continue to execute its mandate, including meeting its obligations to its financers!” Persaud said yesterday.
He added that the sad reality is that the bridge company has applied for this adjustment on three (3) separate occasions, March 2015, August 2015 and January 2016, but without a response from the government.
The Chairman further told the media that the investors established the Berbice Bridge Company and entered into a Concession Agreement under the Berbice River Bridge Act of 2006, contracting to own and operate the bridge for a period of 21 years.
After that, “a fully operational bridge is transferred to the government and people of Guyana, at no cost.”
Dr. Persaud said that at present the investment is equivalent to G$9 Billion (US$45M) with NIS being the largest investor, followed by a significant number of pension funds and insurance companies, as well as some of the commercial banks and other private investors.
He lamented that the contract that exists between the company and the Government of Guyana, outlines a formula used to determine what the toll of the bridge needs to be, to ensure that the company can operate and maintain the bridge and meet its obligations to its investors.
“Sadly, the contractual obligations of the government as it relates to these adjustments have not been met.
Please note that the failure to implement these adjustments is inconsistent with the Concession Agreement and the provisions of the Act.
The cumulative result of the government’s failure to implement the contractual agreement has led to the bridge company now accumulating a loss of 2.8 Billion Dollars and the company now faces bankruptcy.”
“These accumulated losses and shortfall of cash flow have compromised the bridge company’s obligation to efficiently operate and maintain the bridge, including the timely servicing of its 39 pontoons under the bridge, and have resulted in the company defaulting on its obligations to its investors.”
Following similar problems last year, a team of engineers from the Demerara Harbour Bridge was dispatched to Berbice.
Minister of Public Infrastructure David Patterson, noted that some recommendations were made, including one for the acquisition of a piece of land in Berbice to construct a dry dock to repair and maintain the pontoons.
The BBCI will require about $150M to bring the proposed dry dock into operations.
With regards to financing, Patterson says, there are possibilities of selling shares on the open market. The bridge, he pointed out, has a guaranteed rate of return, and there are possibilities also to divert some of the dividends for maintenance.
Asked about the possibilities of further intervention from Government, Minister Patterson was critical of the company, which had made it clear that it was privately run.
Sep 24, 2018Hundreds of fans flocked to the Everest Cricket Club (ECC) ground yesterday to witness the action packed final day of the 2018 Indigenous Heritage Games which saw teams from across the 10...
Sep 24, 2018
Sep 24, 2018
Sep 24, 2018
Sep 24, 2018
Sep 24, 2018
I would classify the suspended Town Clerk, Royston King as the saddest manifestation of a post 2015 journey gone wrong.... more
Editor’s Note, If your sent letter was not published and you felt its contents were valid and devoid of libel or personal attacks, please contact us by phone or email.
Feel free to send us your comments and/or criticisms.
Contact: 624-6456; 225-8452; 225-8458; 225-8463; 225-8465; 225-8473 or 225-8491.
Or by Email: [email protected] / [email protected]