Shareholders agreement for Berbice Bridge must be made public – Clive Thomas

Sep 02, 2015 News

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Contractual arrangements are outrageous, ruthless and unconscionable
By Kiana Wilburg
Presidential Advisor on Sustainable Development, Dr. Clive Thomas, believes that the contractual agreement for the Berbice River Bridge Inc. which allows New GPC and Hand in Hand Trust to own 50 percent of the entity when their investment is less than five percent, is “outrageous, ruthless and unconscionable.”
New GPC, a company owned by Dr. Ranjisinghi ‘Bobby’ Ramroop, has close relations to former President Bharrat Jagdeo and, according to an article on chrisram.net, that company has two Directors on the Board.
The structure of the company allows equity shareholders whose investment is less than five percent ($400 million) of the total funds of the company to exercise controlling interest over the company. Of the $400 million, the Ramroop Group owns 40 percent and the Hand-in-Hand Group owns 10 percent.

 

The contract also provides for the equity shareholders to receive 23 percent on their investments.
Dr. Thomas said, “This contract agreement is clearly designed to make just a handful of people filthy rich for the rest of their lives at the expense of the poor. It is a despicable contract which must be changed. The contract agreement and the implications for our taxpayers can only be described as criminal and I will insist that the Shareholder Agreement be made public.”
The Presidential Advisor added, “It is clear, also, that under the past regime there was a disease of greed which infected every project, every plan and almost every entity. We are seeing this behaviour on display from the company. Government has a right to reduce the tolls.
“It is unconscionable to think that this entity wants to increase the tolls and suggest in any way that it wants the government to consider extending the concession agreement.”
The coalition government, in the lead up to the May 11, 2015 elections, had accused the previous administration of hijacking the Berbice Bridge Company Inc. (BBCI), deliberately structuring operations in a manner that allowed investors and their close friends with disproportionately small investment to control the company.
To ease the burden on users of the bridge, Finance Minister, Winston Jordan, pursued the reduction of the tolls in a phased manner. The first phase would see the toll reduction for cars, from $2,200 to $1,900. This was announced during the budget presentation. It was set for implementation on Tuesday. Jordan had also indicated a 10 percent reduction on other categories of vehicles.
But the Finance Minister at a recent post Cabinet press briefing revealed that the implementation of the reduction seems to be in limbo at the moment. He disclosed that the prescribed toll reduction was in limbo because BBCI’s Directors decided to take that matter to its shareholders.
Jordan believed that the Bridge Company was deliberately delaying the implementation of the toll reduction.
The reduction is estimated to see the company collect annually about $120M less from commuters but being compensated by Government with an equivalent amount. For the remaining months of the year, the Government has allocated $36M.
The company subsequently placed an advertisement in this newspaper, refuting the allegations by Jordan as well as providing the public with its take of the discussions conducted with the Finance Minister.
But on Monday, Jordan expressed “grave concern” about the inaccuracies contained in a press release issued by the Berbice Bridge Company.
He also noted that the Berbice Bridge Company is seeking to impose a further 55 percent increase in tolls on an “already suffering population.”
Commenting on the BCCI statement, the Minister noted that “there is no toll reduction to the company.”
He had said that the company will continue to receive the full amount of the existing toll; if there is a reduction the company would receive the difference from the Government. Therefore the Bridge Company would not lose a cent.
Jordan also raised concerns about BCCI reporting on a statement he allegedly made at the meeting on August 12, last.
BBCI had stated that Jordan “accepted 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.”
But, the Minister said that contrary to that assertion, his record of the meeting indicates that he restated the intention of the Government to facilitate lower tolls for users of the Bridge to bring some relief to the people of Regions Five and Six.
“I further indicated that the Company would not suffer any loss.”
Minister Jordan said that he was prepared to enter into a series of discussions on matters of mutual interest, “beginning with the reductions announced in the Budget Speech.
“It was with Mr. (Christopher) Ram, and not with me, that the company indicated that it would like discussions to take place on extending the concession period from twenty-one years to forty years, or for the government to consider its letter to the PPP/C as an application to this Government for a toll increase.”
The Minister stated that he was given false hope by the “spirit in which both meetings of August 12 were conducted. It gave hope of an expeditious conclusion of this matter.”
“Alas, there now appears to be other forces who want to use the Government as a compensatory mechanism for a faulty investment model of the Berbice Bridge, one that seeks to impose a further 55 percent increase in tolls on an already suffering population.Such an unreasonable charge will not be countenanced by our Government.”
Jordan also noted that it is now approaching three weeks since his meeting with the officials of BBCI and the public is being inconvenienced.
“I hope that the company will move swiftly to demonstrate its commitment to achieving the objective of reducing the burden on the people of Guyana caused by prohibitively high tolls.”

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