A June 2006 Concession Agreement between the Government and the Berbice Bridge Company Inc. (BBCI) says that the former has options to take control of the facility for the sake of “national interest”.
The issue would be pertinent as the Coalition Government is currently exploring its options after BBCI announced, much to widespread anger, that it will go ahead with a November 12, 2018 introduction of a sharp toll increase of 365 percent for vehicular traffic.
November 12, coincidentally, is the same day when Local Government Elections are to be held.
Government has made it clear it has no intentions to support the increases which the privately-owned BBCI is insisting that it is entitled to under the agreement. They are also accusing the Opposition of political machinations.
Since commissioned in late 2008, the bridge’s 39 pontoons were not serviced in keeping with recommendations of between three to five years.
BBCI said that its revenues were not enough and that shareholders are owed almost $3B.
The bridge also claimed it has more than $6B in debts.
Since the increases were announced last week, Minister of Public Infrastructure, David Patterson, said that Government has handed the matter to the Attorney General Chambers for legal advice.
Among other things, Government is looking, as the Grantor to the Concession Agreement, to determine the extent of its powers.
Government is also looking at other options, including the possibility of a take-over.
According to the agreement, Government reserves the right to terminate the agreement and the concession for national interest, subject to adequate notice being given to BBCI and the payment, by Government, of adequate compensation in a sum to be determined at the time of early termination.
The bridge company is not immediately saying whether shareholders want to sell. It is insisting that it consulted with Government and in any case the Concession Agreement allows for the increases.
According to the Concession Agreement seen by Kaieteur News, under the section, “Operation and Maintenance”, the Concessionaire (BBCI) shall be obliged at its own expense to operate and maintain the bridge in accordance with the Construction Specification.
BBCI agreed that it shall ensure on a continuing basis that, at all times during the concession period, its maintenance and operating procedures are sufficient to ensure that the requirements are continuously met.
The agreement said that if Government becomes aware that BBCI has failed to perform any of its obligations, in terms of the operations and maintenance, it can serve a notice. If the situation is not remedied in 30 days, then the Government, as the Grantor, may terminate according to Section 28 of the agreement.
The bridge was the first major “private/public” partnership project using a mixture of funds from local financial institutions, the National Insurance Scheme, and the New Building Society.
The Demerara Distillers Limited, New GPC and Hand-in-Hand were among the other investors.
What had angered Guyana is that despite NIS placing the majority of the funds, the control of BBCI was left largely in the hands of New GPC and other companies close to former President, Bharrat Jagdeo.
The deal has been largely a secretive one, with a tight lid kept on the Concession Agreement because of strict confidentiality clauses, until now.
The Coalition Government had, in taking office back in 2015, vowed to revisit the agreement and the makeup of the board of directors.
It had placed Dr. Surendra Persaud, the current chairman of the NIS, as the new chair.
However, it is Dr. Persaud who has made the announcements for the increase.
Over the weekend, Berbice businesses joined the list of voices in denouncing the intentions to raise the tolls.
Under the announced increases, the tolls for car moved from$2,200 to $8,040, the same for minibuses.
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