Berbice Bridge toll is a hindrance to development – President David Granger

Sep 06, 2015 News

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-“We as a coalition are convinced that it could be lowered”

By: Kiana Wilburg

President David Granger is of the firm belief that the high tariffs of the Berbice River Bridge are a hindrance to development. He said that the coalition administration is convinced beyond the shadow of a doubt that it could be lowered.

In a recent interview with this newspaper, the Head of State reminded that even when the A Partnership for National Unity and the Alliance For Change (APNU+AFC) were in opposition, both parties were always concerned about the high tolls which the residents of Berbice had to pay.

Granger said that for the government, it was not a “commercial question but a human question” as it relates to the lowering to the tolls.

The President said, “I have been confronted by students in West Coast Berbice, who had to travel to Berbice High School. People are paying $5000 a week for transportation costs largely because the previous government not only agreed to a high rate for the use of the bridge but also removed the ferry service that was cheaper.”

The Head of State added, “We were concerned initially because of the impact that the rates had on the poor.”

Asked for his take on the contractual arrangements of the bridge which were described by some members of his camp to be “ruthless and unconscionable,” the President said, “I would like to wait until the talks between the Finance Minister, Winston Jordan and the company are concluded. I don’t want to jeopardize those talks. People are already throwing statements in the air and whole page ads in the newspapers and I don’t want to aggravate that dialogue. Let us wait to see the outcome of the talks. But we as a coalition are still convinced that the rates could be lowered.”

Referring to one of the basic principles of Economics, the President said that when a product has a very high price, it is highly unlikely that the multitude would go after it. He said that the flipside of this is that if the cost is low, it is more than likely that the most persons would be willing to pay for it.

Against this background, he insists that more persons would use the Berbice Bridge if the cost was reduced. He said that it would even lead to the profits of the company being maximized.

The Head of the State added, “In a different situation, it cost $5000 for one person to go from Aishalton to Lethem to get his or her pension for example. As a result of this high price, many can’t afford to go given what the pensioner was entitled to, which was $13,000. Many of them had to end up giving a letter of authorization for someone to get it for them. So things like high tariffs hinder commerce. If more people could travel freely between the two areas then they would go and shop for other things in Lethem and not just to pick up their pension.”

The President said that with the use of that example, it underscores how high tariffs hinder development and said that the high Berbice Bridge toll is a prime example of this.

While government is moving to introduce water taxis amidst an ongoing row with the Berbice Bridge Company Inc, the company is insisting that it has racked up accumulated losses of $1.5B up to the end of last year and could face insolvency unless it can restructure its financing.

Minister of State, Joseph Harmon, at his most recent press briefing said that the decision to place the covered passenger speedboats was taken by the Cabinet of Ministers’ earlier this week.

Minister of Public Infrastructure, David Patterson, reportedly submitted a proposal for the passengers speedboats to the Cabinet. The water taxis will be used to transport mainly students and senior citizens.

Government, based on assessments of how well the boats are working, will then decide on the next steps.

The move by Government would signal clear intent that there is no backing down by the administration, with Harmon also admitting that the agreement that BBCI has with the Government of Guyana is also being reviewed.

The new Government, while on the campaign trail in the lead-up of the May 11 General and Regional Elections, which it won, had vowed to reduce the tolls.

On August 10, Jordan announced in the National Budget that tolls for cars will be reduced from $2,200 to $1,900. For other categories of vehicles, the decrease will be 10 percent.

The toll increase would be subsidized by Government.

However, according to Government, BBCI has been using delaying tactics.

In the first instance, Directors of the US$40M bridge as the September 1, deadline for the tolls reduction implementation approached, said it wanted its shareholders to have the final say.

The bridge company then insisted that it wanted a toll increase or an extension from the 21 years it had to manage the facility, to 40 years. Harmon recently stated that Minister of Finance, Winston Jordan, has been mandated to continue engaging the Directors of the Bridge Company on the toll reduction.

“We are of the firm belief that very soon the Bridge Company… whose Directors referred the matter to the shareholders…that they will see the light and move to have the tolls reduced,” Harmon said.

The Government spokesman made it clear that it is the administration’s duty to provide the necessary infrastructure and regulatory framework.

He explained that initially the “two launches” similar to the covered ones operating between Vreed-en-Hoop and Georgetown, will be put into operation. The vessels will not belong to the State.

A special committee that would include representatives from the Ministry of Public Infrastructure, Ministry of Education, Ministry of Social Protection and Ministry of Public Security is expected to travel to Berbice over this weekend to fine tune the details, including locations.

Harmon also disclosed that there was a loophole in the agreement between the Government and the bridge company, which while blocking vessels from transporting vehicles across the Berbice River, does not say anything about passengers.

Over a week ago, Minister Jordan had also made it clear that the Berbice River does not belong to BBCI.

The BBCI situation has even angered the new administration, especially after it was disclosed that private businesses were allowed to invest five percent into the construction of the bridge, which was opened in December 2008 but managed to gain ownership control of almost 50 percent of the equity. This subsequently led to calls for the Shareholders Agreement to be made public.

There was disbelief when it was learnt that New GPC and Queens Atlantic Inc., two companies owned by Dr. Ranjisinghi ‘Bobby’ Ramroop, a close friend of former President Bharrat Jagdeo, were able to install two Directors on the Board of Directors while the Government of Guyana had little say in the affairs of BBCI.

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