How is this not a triple whammy?

Sep 09, 2015 Letters

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Dear Editor,
Given the ongoing Berbice Bridge brouhaha, it is obvious the APNU+AFC partnership did not do its due diligence homework to determine the realization of its elections campaign promise. It now needs to capitalize on the public’s growing anger and interest in the emerging facts and figures, which are in the government’s favour to take decisive action and stop appearing weak or uncertain.
Before advancing, I want to make it abundantly clear that I, along with many others, was and am not opposed to the Berbce Bridge as a means of public access to either banks of the river. I am not even against public-private partnerships or P3s, as they are popularly called in developed countries, and which this bridge was supposed to represent. I will get back to this P3s concept, but I must take issue with the manner in which the bridge deal was structured for a small group of investors to put up small amounts of money and then become majority shareholders, even though the government, via the NIS, holds the majority of the bridge’s investment. Worse than that is the deal also calls for the minority investors to collect dividends and to tell the government it cannot collect its dividends.
It comes as little or no surprise to many of us who have been publicly wailing for years against the Jagdeo regime that the Berbice Bridge deal is so damning, it now requires the coalition government to grow a spine of steel and stand up to the bridge management on behalf of the people of Guyana, who took a hit when the Jagdeo regime raided the NIS for money to build the bridge and are taking a hit with tolls comparably higher than users of the Demerara Harbour Bridge. In the most literal sense, the people of Guyana are paying twice for the same project. And on top of that, we have the Finance Minister talking about raiding the Consolidated Fund to help replenish the money taken from the NIS to build the bridge. How is that not a triple whammy?
Editor, I did say at the top that I will expand a bit on the P3 concept, which is popular in Europe and Canada, and gaining traction in America. There are various broad definitions of P3 or PPP, but they all agree that it is about ventures involving public and private funds to deliver services to the people. In short, they are legal and they work.
While there are some P3s that contain sovereign immunity clauses that protect the government from lawsuits by private partners, no wise and prudent government goes into a P3 arrangement that denies the government the right to end the contract on its terms or that ‘gives away the entire store’, even if the project is owned by the public but operated by private parties. In fact, while both public and private investors know there are financing risks involved in P3 ventures, it may be construed as criminally irresponsible with huge legal implications for holders of the public purse to deliberately give away public funds in such ventures.
In Guyana, the obvious problem with P3s is that they were deliberately designed to enable a handful of people to become wealthy via a structured arrangement, which allowed the government to put up the bulk of financing versus a miniscule amount by the private investors, then granting the minority investors majority status with tons of rights, privileges and concessions. When these local P3s are legally examined, they appear criminal in content and intent, and in law-abiding democracies, the architects and technicians of such structured arrangements would face stiff fines and prison time.
While the Berbice Bridge and the Guyana Marriott stand out as two prominent examples of flawed P3s, a closer look at the Amalia Hydro Project would reveal it almost qualified for P3 status, given that former President Bharrat Jagdeo not only invited Makeshwar ‘Fip’ Motilall into his office and awarded him US$15M in 2010 to build the access road to the hydro generating facility, but Jagdeo also traveled to China in 2010 and used his government as guarantor for a US$500M loan towards the hydro project.  Had the Amalia project gone ahead, it would have been another high-cost P3-type venture that would have benefited private minority investors at enormous expense to the unwary public.
In closing, while I resonate with the government’s sincere intentions to lower the bridge tolls for needy users, it cannot tell the nation that buying out the other shareholders or nationalization is not financially feasible, then turn around and agree to interminably subsidize the financially bleeding bridge. That is a contradiction that needs clarification, even as the minority shareholders make money and NIS does not.
Let me say also that at this juncture of an obviously publicly embarrassing stalemate brought on by the government, it needs to have face-saving options or some sort of Plan B, but I would strongly recommend that it (1) stops badgering the bridge management about lowering the tolls, (2) steps up engagements with private parties for the re-introduction of alternative cheaper, safer and more reliable river crossing services, and (3) seeks out legal advice to extricate the NIS from the Jagdeo-engineered asphyxiation, because it has been bleeding 950 million preferred shares in the bridge.
Is it not ironic that the elderly folks this government is trying to help pay less to cross the Berbice Bridge are the same folks who are suffering because the NIS invested money in the bridge and now cannot pay them more money to keep up with the rising cost of living? And Jagdeo wants to run Guyana again?
Emile Mervin

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