Stalemate as New GPC-controlled Berbice Bridge delays toll reduction

Aug 29, 2015 News

Days after Government announced in the 2015 National Budget that it is reducing tolls for commuters using the Berbice River Bridge, it appears that there is a stalemate, and the September 1st deadline will not be a reality.

Minister of Finance, Winston Jordan, was yesterday convinced that the Berbice Bridge Company Inc. (BBCI) is holding the travelling public hostage by delaying the Tuesday, September 1st deadline for the implementation of the tolls.

He spoke of the situation during the Government’s weekly post-Cabinet press briefings at the Ministry of the Presidency.

Since announcing the tolls’ reduction during the budget presentation in early August, Government has been meeting with the company to work out the arrangements.

However, on Thursday, the company told Government that it wants its shareholders to make the decision.

“With September 1, fast approaching, the Government is concerned that these delaying and dilatory manoeuvres appear designed to frustrate the reduction in the tolls and hold the travelling public hostage,” the Minister said in a prepared statement yesterday.

During the budget presentation, Jordan announced that from Tuesday, September 1st, the tolls for passengers carts and buses will be reduced from $2,200 to $1,900 – a 13.6 percent decline.

Tolls for all other types of vehicles are to be reduced by 10 percent.

“In introducing the reduction, I noted that it would be the first of a phased reduction in the Berbice Bridge tolls.”

He said that on August 12th, he met a four-man team from the company, led by its Vice Chairman, Ravie Ramcharitar.

“I restated the intention of the Government to facilitate lower tolls for users of the bridge to bring some relief to the people of Regions 5 and 6. I indicated that the company would not suffer any loss, since the Government would pay to the company the difference between what is now charged and the reduced toll, in effect a subsidy.”

According to the Minister, Ramcharitar requested that the Government’s proposal be put in writing.
“This was done. He also said that the company would like further discussions to take place on the proposal and an extension in the concession period from 21 years to 40 years: or for the Government to give consideration to an application for an increase in toll made to the PPP/C Government on March 15, 2015.”

DELAYS

Jordan disclosed yesterday that Government, during the talks, expressed its willingness to enter into a series of discussions on matters of mutual interest, beginning with the implementation of the reductions announced in the budget.

“I also announced that Mr. Christopher Ram would engage the company on the procedures for effecting the reduction. The first meeting between Mr. Ram, on behalf of the Government and Mr. Ramcharitar, Mr. Bert Carter, the company’s CEO and Finance Manager, on behalf of the company, was held on the same day, August 12th.”

At the meeting, the company’s representative indicated their preference to receive any subsidy, quarterly, in advance, subject to adjustment at the end of each quarter.

“This was agreed. The letter containing the formal proposal was sent to the company on August 13. It has taken the company over two weeks and several telephone calls before an inconclusive response was finally received.”

The company’s directors reportedly decided, during a meeting held on Thursday that the matter will be placed before their shareholders.

The Minister insisted that Government wants to amicably conclude with the company, the mechanisms leading to the implementation of the announced toll reductions.

“While we respect the concession agreement, signed with the previous administration, we believe that lowering the tolls is in the national interest. We take this opportunity to re-state our resolve to do everything possible to bring relief to the travelling public in Regions Five and Six, who use the Berbice Bridge.”

$120M SUBSIDY NEEDED

Questioned yesterday, Jordan disclosed that under the arrangements, Government would have been advancing the bridge company a sum of money every quarter.

Based on current traffic figures, the company said the toll reduction would put them out-of-pocket about $120M-$140M.

In the budget for this year, Government has allocated $36M to help the company deal with the fallout of the reduction for the period September to December, 2015.

Commissioned in 2008, the Bridge, while hailed by long-suffering Berbicians, came under fire as mostly taxpayers’ dollars was used for its construction, yet it ended up in the control of a few private investors.

Apart from the state-owned National Industrial and Commercial Investments Ltd (NICIL), being the single largest shareholder, in 2011, Queens Atlantic Investment Inc (QAII) which is controlled by Dr. Ranjisinghi ‘Bobby’ Ramroop, the best friend of the former president, Bharrat Jagdeo, acquired even more shares in the BBCI, making him the second largest shareholder.

Ramcharitar, the bridge company’s Vice Chairman, is a top deputy in Ramroop’s companies.

The holders of the ordinary shares are National Insurance Scheme, New GPC, QAII and Secure International Finance Company each having $80M, and Hand-in-Hand and Demerara Contractors each holding $40M.
There has been anger about the operations of the bridge which last year asked NIS to waive its dividends. Indeed, the Government of Guyana has not been collecting dividends as the company says it is not making profits.