The Chairman of the Berbice Bridge Company Inc Dr Surendra Persaud today announced massive toll increases following the absence of an agreement with the government on the way forward.
BBCI Press Conference Opening Statement
By Dr. Surendra Persaud
16th October, 2018
Good Morning Ladies and Gentlemen of the Media,
The Board of Directors of the Berbice Bridge Company Inc. met with the Hon. Minister of Public Infrastructure on Thursday (October 11th, 2018) to follow up on the Berbice River Bridge toll adjustments request, in accordance with the Berbice Bridge Act of 2006.
The Minister, conveyed to the Berbice Bridge Company Inc that the Government was not going to facilitate our request for the toll adjustment that is covered under the Public Private Partnership between the Government and the Private Investors in the bridge under the Concession Agreement.
The Minister, instead, proposed that Government undertake the responsibility, only, for servicing the bridge pontoons and offered to arrange a meeting with the honorable Minister of Finance for further consultation. These options are outside of the contractual arrangements that exist within the Concession Agreement and are in breach of our Agreement.
The actual cost, in fact, of maintaining the bridge pontoons is a small part of the overall operational cost of the Bridge and would do nothing to improve the revenue of the Bridge.
Let me take this opportunity to refresh everyone’s memory that the construction of this bridge would not have been possible without a partnership with the private sector in which private sector financing contributed G$9.1B.
You will recall that, the Company wrote the Minister since July 9th, 2018, requesting that he implement a toll adjustment to the current toll charges for the Bridge in accordance with a prescribed toll formula. We have now been formally informed that the GOG will not accommodate this request
The Berbice Bridge was a truly transformational project. It continues to benefit thousands who traverse it daily and many younger persons have never had to suffer through the chaos of the river ferry. At our last press conference, I shared my first experience of crossing the bridge and how efficient and convenient I found it to be, when compared to the horrifying experience of using the ferry service in the past.
Further, the Bridge continues to make a tremendous contribution to the ease of doing business in Berbice.
At our previous press conference I pointed out that the failure of the GOG to implement the previously requested toll adjustments has resulted in the Company being unable to meet its contractual obligations to its lenders.
The Company, unfortunately, has accumulated losses in excess of G$2.8B, has never paid dividends to its ordinary shareholders and is now in default of obligations to its numerous stakeholders, including the NIS.
It is important that we understand that the NIS’s investment in the Bridge represents an investment of all contributors to the scheme, without exception, past, present and future. These investments by the private companies have now been flagged by their respective auditors and regulators as impaired.
Again, there appears to be a fallacy that the required adjustment in tolls will benefit the shareholders. This is simply not the case. In fact, any excess revenue, as detailed in the 14 pages long tolling policy, which is earned in one year is applied to an adjustment in the following year.
Since no adjustment was ever made, no surpluses have been earned, resulting in the required adjustments to the toll being compounded.
Ladies and Gentlemen, There is a contract, there is an established formula within that contract and there are obligations to be met.
The toll ought to be adjusted in accordance with the agreement, in good faith, to allow the Company to properly maintain and operate this critical infrastructure as it was designed to be for all Guyanese to benefit and enjoy. As previously pointed out, “the Company has not neglected its obligations to maintain the Bridge, the Company commissioned equipment at a cost of approximately G$167M for this express purpose. This equipment will be used in the servicing of its 39 pontoons.”
Since its inception, the BBCI has acted as a responsible corporate citizen and it has adhered to the requirements under the Concession Agreement.
Today continuing on this path and following the legal advice in relation to the rights and responsibilities of the Berbice Bridge Company Inc. and the Ministry of Public Infrastructure in relation to an adjustment in tolls we are now taking the next step in this process.
On the basis of this legal advice, that the Berbice Bridge Company Inc. has received, it now wishes to inform you and the Public, that, consistent with those rights and responsibilities effective November 12th, 2018 at 12:01am, the revised tolls will be implemented and will be as follows:
Ladies and Gentlemen, as a company we are limited to the authorities granted to the company as stipulated in the Agreement that exists between the BBCI and the Government of Guyana.
The Government of Guyana like it is currently doing with a number of services including the bridge can subsidize the cost of the toll thereby reducing the impact on the consumer.
Thank you for your time. I ask that you consider our presentation and announcement today in light of obligations by both the Company and the Government of Guyana.