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NIS now chairs Berbice Bridge Company Board
The Berbice Bridge Company’s board will now be chaired by Dr. Surendra Persaud who is the current chairman of the National Insurance Scheme board of directors.
NIS Chairman,
Dr. Surendra Persaud
Dr Persaud made this information known yesterday during the 47th anniversary celebrations of the National Insurance Scheme, at its Brickdam office. Persaud was at the time commenting on the financial status of the NIS.
He said, “I am pleased to report that the National Insurance Scheme has appropriate representation today on the Berbice Bridge board.”
He further said, “As the largest investor in the Berbice Bridge, we the National Insurance Scheme have appropriate membership, I actually am now the chairman of the Berbice Bridge Company.”
According to the chairman, to say that what was promised to the investors in the bridge was lucrative would be an understatement. “What happened with the Berbice Bridge was that the monies that were given to them, were given with a promise of a rate of return that was not sustainable.”
He said that at present the Bridge is in a position where it is unable to satisfy its debt. Persaud said that now the NIS is leading the bridge management through a restructuring process.
An audit into the Berbice Bridge done by HLB R. Seebarran & Co. had recommended that NIS needs to have proper representation on the BBCI’s board since it is the largest investor in the company. In their opinion, the scheme should have a minimum of two representatives on the board -one of which should be the Chairman/Chairperson.
Persaud said that hopefully during the first quarter of next year the NIS can begin to receive the funds from its investments.
The NIS is the largest single investor in the bridge whereby it invested $2.6B. A forensic audit into the company showed that the entity had accumulated losses totalling $1.5B as of 2014.
Despite being the biggest investor, the New GPC and Ramroop Group through an equity arrangement had 40 per cent control of the bridge company. These companies are said to be owned by close friends of former President Bharrat Jagdeo. Two Directors representing the Ramroop Group have since resigned.
With the restructuring of the “Concessions Agreement” NIS is now allowed to have a more dominant role in the management of the company which is correspondent with its shareholdings. The auditors reported that this agreement should come to an end in June 2027, after which the company will be required to hand over the bridge to the Minister responsible.
According to the report, the previous Board of Directors had made several appointments but no position was taken as to the representation of the scheme’s interest. This was evident in the minutes of the board meetings over the last four years.
In 2014, BBCI informed NIS that it would be able to pay its dividends since enough traffic was not crossing the Berbice River and there was barely money available to pay overhead costs and loan commitments.
The investment by NIS was done in different forms. As it relates to corporate bonds, $1.06B was invested; Subordinated Loan totalled $500M, which is a debt that ranks after other debts in the event that a company falls into liquidation. Additionally, preference shares were bought at a cost of $950M and common shares for $80M.
The auditors had recommended that the NIS should seriously consider having a bigger say in the Berbice Bridge if it wants to protect its $2.6B investment.
The report also said that with the current situation at the Berbice Bridge, the new NIS Board will need to assess the risks and returns of investments.
It was also recommended that the NIS board carry out their own investigation to determine the value of the bridge which was reported at $6.28B net or US$29.9M at December 31, 2014 in the audited financial statements.
Earlier this month it was reported by NIS that the Berbice Bridge Company had begun making payments to NIS on the subordinated Loan stock that was issued.
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