Minister of Public Infrastructure David Patterson has reached an agreement with the Berbice Bridge Company Incorporated (BBCI) for lowered tolls and will be signing a contract with the company in the coming week.
A release from the Ministry of Public Infrastructure said yesterday that the agreement, which covers the provision of a government subsidy to BBCI, will take effect from January 1, 2016.
The agreement comes after months of wrangling between the company and the government. The APNU+AFC government had pledged to lower the bridge tolls in its campaign manifesto and this led to a dispute with the company which wanted a reworking of the financials. With no agreement forthcoming the government reintroduced a ferry service on the Berbice crossing which upped the pressure on the company.
BBCI eventually decided to accept the proposal and talks then ensued on the mechanism. The government will be paying a subsidy to the company to the amount of the reduced tolls.
On August 10, Minister of Finance Winston Jordan had announced that from September 1, the toll for passenger cars and buses crossing the Berbice River Bridge would be reduced by $300, from $2,200 to $1,900, while the toll for all other types of vehicles will be reduced by 10 per cent. The reduction was intended to fulfil an elections campaign promise made by the APNU+AFC coalition.
Stabroek News was unable to ascertain the terms of the agreement reached.
Contacted for comment BBCI Chief Executive Officer Omadat Samaroo said he is aware of the company having received a communication from the minister’s office but would not be able to comment on its contents until Monday when it will be examined. He however added that he expects the company and the ministry to sign an agreement sometime in the new week.
While the government had proposed a subsidy to cover the loss to the company from lower tolls, BBCI had argued that its financial plight required a longer-term agreement which would enable a refinancing of its debt with creditors.
As a result, BBCI requested an extension in the concession period from 21 years to 50 years, or for the government to consider an application for a toll increase made to the PPP/C government on March 15. The APNU+AFC government refused to agree to either request.
Up to the end of last year, the BBCI said, it had racked up accumulated losses of $1.5 billion and is under threat of insolvency unless it can restructure its financing. Meanwhile, the 2015 budget had seen an allocation of $36 million as a subsidy for the bridge company for this year and Jordan had said that between $120 million and $140 million would be required annually to allow for a phased reduction of tolls.