The Berbice Bridge Company Inc (BBCI) has formally proposed a 19-year extension to its concessionaire’s agreement as a means to set aside steep hikes in tolls set for November 12 and the Public Infrastructure Ministry says that the offer will be discussed at Wednesday’s Cabinet meeting.
Minister of Public Infrastructure, David Patterson’s ministry had referred to the conditional offer in a statement on November 3rd in reference to a letter from BBCI in the preceding day’s edition of Stabroek News but did not provide any details on it.
A letter from BBCI’s Finance Controller Stephen Rambajan, dated November 2, 2018, to Patterson setting out the 19-year extension was released yesterday to the media.
It said “I write to you on behalf of the Board of Directors of the Berbice Bridge Company Inc. (BBCI) to inform you that the Board has decided, in good faith and in the public interest, without prejudice, to seek an immediate meeting with you, to discuss the following. An agreement to extend the concession period to 40 years (i.e. an additional 19 years) as a means of avoiding the need for implementation of toll increases announced by the company on October 16th, 2018 and the implementation of toll increases in the immediate future”.
The letter added: “We believe that such an extension, with full government support, will provide BBCI as the concessionaire the opportunity to approach its lenders to renegotiate terms and conditions of the various debts. If these negotiations with the lenders are successful, it will provide much needed relief to the cash requirement burden and, therefore, the need for toll increases at present and in the future”.
On October 16th, the heavily-indebted BBCI announced that it would be instituting huge hikes in tolls, an approximate 265% on each category, as of November 12th, 2018. Mere hours later, government responded with Patterson assuring residents that the government would do everything in its power to ensure that they pay no increase. The announcement of the hikes by BBCI attracted widespread condemnation and it was unclear how they would be implemented as Patterson would have to sign such an order as the subject minister.
In announcing the increases at the NCN studio, Chairman of the Board of Directors of BBCI, Dr Surendra Persaud said the decision was based on legal advice that the company had received, while also noting that no prior adjustments were ever made and no surpluses have been earned, resulting in the required hikes in the tolls being compounded.
The company, in the letter in the November 2nd edition of this newspaper reiterated its reasons and said that government had refused to meet with it to discuss bridge tolls, despite three requests.
“The BBCI is bound by its Concession Agreement under the Berbice River Bridge Act in implementing the tolls charged at the Bridge. The Company has no alternative but to honour the Toll Adjustment Formula prescribed in the Agreement. The Company has no discretion in calculating the amount of the toll. The Company is bound by the Toll Adjustment Policy dictating the Formula. Since 2015, respective governments (previous and present) have violated their contractual obligations to implement an annual toll adjustment which would have resulted in small incremental adjustments instead of the current burdensome level… The current level of toll adjustment is entirely the fault of the government, not the Company,” the letter stated.
“Prior to and since taking office, this government has refused to meet with the BBCI in spite of three requests to do so. The power and the privilege to review or amend the Concession Agreement rest entirely with the government”, it added.
Patterson’s ministry replied to the letter through an advertisement which was also carried as a letter in this newspaper, stating that the BBCI’s statements were riddled with inaccuracies.
Patterson’s ministry said that the government has never refused to meet with BBCI and there were records to that effect and BBCI’s acceptance of government taking over the maintenance of the 39 pontoons of the bridge was reflective of this.
“The Coalition Government has no intention of approving the toll increases proposed by the Berbice Bridge Company Inc., and assures the people of Guyana that in the interest of peace, order and good government, we stand ready to protect their legitimate right to a peaceful life in Guyana,” Patterson’s ministry stated.
“It is inaccurate that the Government has refused to meet with the BBCI. In fact, the Ministry met with the BBCI on Thursday, October 11, 2018, prior to the announcement of the proposed toll increases. At this meeting it was mutually agreed by the parties that the Ministry communicated its offer to assume full responsibility for the maintenance and rehabilitation of thirty-nine pontoons- an obligation under the Concession Agreement that the BBCI failed to execute during the years of operation. By correspondence dated October 16 and 17, 2018 to the Berbice Bridge Company Inc., the Ministry of Public Infrastructure had firmly reiterated its commitment to assume full responsibility for the maintenance and rehabilitation of the 39 pontoons. The Berbice Bridge Company Inc. has since acknowledged and accepted this proposal and the Ministry is working towards commencement of maintenance in 2019.” it added.
While admitting that Patterson is correct about the BBCI’s acceptance of government’s maintenance of the pontoons, BBCI’s Public Relations spokesperson, Kit Nascimento is adamant that the minister refused to discuss the tolls.
“He refused to discuss the toll adjustment. He has misrepresented the case. All he was prepared for was to talk about the maintenance of the bridge. He is correct he offered to take over the maintenance and the company has written accepting that offer. But there was absolutely no discussion on the toll because he refused to entertain it,” Nascimento told Stabroek News yesterday.
Nascimento believes that the matter of the toll could be resolved if government gives the company an ear as per the request of the November 2nd correspondence and said this is echoed in the letter.
“We are convinced that this proposal will allow the tolls to remain as is and provides opportunities for toll reduction in the near future, removing the need for government subsidy to the tolls and maintenance of the pontoons. Subject to mutual agreement on our proposal…BCCI will withdraw the implementation of the toll adjustments which were announced by the company on October 16th, 2018,” the November 2nd letter to Patterson stated.
The BBCI proposed that when the agreement is reached, a “joint statement announcing that the Government of Guyana (as the Grantor) and BBCI (as the Concessionaire) have come to agreement on a solution to toll adjustments for the Berbice River Bridge going forward which will be announced shortly and that the company will not proceed with the toll adjustments which were announced on October 1th 2018.’
However, Patterson’s ministry said it was currently seeking legal advice on the matter and it could also not commit to a meeting date, until the letter was discussed with the APNU+AFC Cabinet, scheduled for Wednesday.
“The Ministry wishes to publicly state that while it supports and welcomes the BBCI’s request for transparent discussions, the Ministry is also currently engaged in obtaining legal advice on the matter and the Government of Guyana will be reviewing all available options under the confines of the law, as well as possible actions proposed by BBCI prior to any meeting with the BBCI.
“Notwithstanding the above, BBCI’s revised proposal will be shared at the next cabinet meeting slated for next Wednesday, after which a meeting will be scheduled with BBCI to communicate cabinet’s decision, and hopefully move this process forward. The Ministry wishes to note that this response to BBCI is by no means a refusal to meet; rather, it serves to ensure that the Government of Guyana continues to stand ready to advance the best possible option to all Guyanese in continuing dialogue,” it added.
The Cabinet meeting on Wednesday will be held in the absence of President David Granger who is in Cuba for the investigation of a medical ailment.