Berbice Bridge Inc says has accumulated losses of $1.5b

Up to the end of last year, the Berbice Bridge Company Inc (BBCI) had racked up accumulated losses of $1.5b and is under threat of insolvency unless it can restructure its financing.

This is the contention of the BBCI in a whole-page advertisement in today’s SN, the latest salvo in an escalating battle of wills with the APNU+AFC administration which has voiced its determination to lower the Berbice Bridge tolls in line with a campaign promise.

BBCI and the government have been locked in talks over the reduction but there has been no agreement. The government had set September 1st as the date for the lower tolls to take effect but this date has now passed.

While the government has proposed a subsidy to cover the loss to the company from lower tolls, BBCI is arguing that its financial plight requires a longer-term agreement which would enable a refinancing of its debt with creditors.

Today’s whole page advertisement also sought to dispel what it said was misinformation. BBCI noted that it had never increased tolls over the six years that the bridge has been in operation and that it had never declared or paid any dividends to any of its ordinary shareholders. The ordinary shareholders comprise Secure International Finance Company Limited, the National Insurance Scheme, New GPC Inc, Queens Atlantic Investment Incorporated, Hand-in-Hand Mutual Fire Insurance Co. Ltd and Demerara Contractors and Engineering Limited.

BBCI argued that it cannot restructure its financing unless it can present to creditors and investors “a stable and profitable projection of the company’s financial position over many years to come”.

It said that recognizing that increased tolls would be burdensome on commuters, in May of 2014 it made an alternative proposal to the then PPP/C government and followed this up with a presentation to Cabinet in June 2014. The advertisement said that the alternative put forward by BBCI was for the concession period to be increased from 21 years to 50 years.

“This would allow creditors and investors alike to benefit from the added security in BBCI’s projected profitability and improved cash flow position, under the extended period, which would allow BBCI to restructure its financing and lower its costs, thus restoring viability”, the ad said.

This BBCI proposal had not been publicised by the company or the government. The PPP/C government did not act on the proposal and with general elections approaching, BBCI said it had no other option than to apply in March 2015 for increased tolls as per the toll formula in the concession agreement. This, too, was also not disclosed by either the company or the PPP/C government. Earlier this week, Finance Minister Winston Jordan said that a 55% hike in bridge tolls had been sought in the proposal.

The ad listed the sequence of events that followed the advent of the new APNU+AFC government and said that BBCI has not rejected or accepted the currently proposed government subsidy. It added that the BBCI Board has determined that the correct approach would be to raise the matter with all its stakeholders including its creditors.

The Berbice Bridge
The Berbice Bridge