Berbice Bridge Company officially informs Govt. of toll increase

Oct 18, 2018 News

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…insists it has powers to do so after “consulting” with Minister

One day after dropping a bombshell and sparking a tsunami of protests across the country over new tolls for vehicular traffic, the Berbice Bridge Company Inc. (BBCI) appears not to be daunted.

Yesterday, the company defiantly released a letter addressed to subject Minister of Public Infrastructure, David Patterson. The letter informed the minister of intentions to steam ahead with the tolls increase come November 12, 2018 – the same day that local government elections are to be held.

The company, a controversial one from the start because of the way the financing model was configured under the People’s Progressive Party/Civic, insisted that it has the powers and has consulted with the Minister in keeping the Berbice River Bridge Act on the tolls.

The issue is threatening to become a talking point as the aforementioned elections loom.

The bridge company is proposing a staggering 365 percent increase in vehicular tolls.

On Tuesday, Patterson insisted that the tolls increases as announced have elements of political machinations.

According to the letter from chairman, Dr. Surendra Persaud, to Minister Patterson, dated Monday, October 15, the Board of the company, in thanking the ministry for a meeting last on the toll increase, expressed its disappointed with the Government, “a party to the

Concession Agreement” for “not honoring its obligation to implement the toll adjustment.”
The Chairman noted that during the meeting, Minister Patterson “offered to undertake maintenance works on pontoons of the Berbice River Bridge and to absorb this cost to your Ministry from the year 2019”.

According to Persaud, the minister also offered to arrange a meeting with the Minister of Finance, Winston Jordan, to examine the debt situation of the BBCI.

Persaud noted that the adjustments in the tolls required were computed using the established toll adjustment formula prescribed in the Concession Agreement. However, despite four requests to have the tolls adjusted – starting since March 25, 2015 and as recent as July 2018, there was no response.
Dr. Persaud reminded Minister Patterson in the missive that the company in January 2016 signed and implemented a commuters’ subsidy arrangement in good faith, with the understanding that there would have been continued discussions and an adjustment to tolls.

“The Government, our partner in this Public/Private/Partnership has not reciprocated the good faith extended by BBCI, since there were never any discussions or an adjustment in tolls.”

We wish to emphasize the fact that since commencement of operations on December 23rd, 2008, the company   has  had  no  increases in  tolls, despite   inflation,  increases in exchange   rates, overheads  and other factors.”

Persaud said that the bridge company has taken legal advice in relation to its rights and responsibilities, and that of Ministry of Public Infrastructure, in relation to an adjustment in tolls.

It had this to say of its right to increase the tolls: “Part 3, Sections 4 to 6 of the Berbice River Bridge Act headed “Toll Order” makes extensive provisions in relation to the Minister’s power in relation to tolls. Of specific relevance is Section 4(2).  It provides that the Concessionaire may specify different toll  amounts  in  relation  to  the  use  of  the  bridge  by  reference  to  such  circumstances  or combination of circumstances as the Concessionaire may, after consultation with the Minister, determine. It is under and by virtue of the above provision that the Berbice Bridge Company Inc. is consulting with you in relation to its proposals for an adjustment in tolls.”

The bridge company insisted that the Concession Agreement provides that after 10 and a half years of the issuances of the project final completion certificate (during which period the toll level shall not fall below the minimum level preset at the time of the Concession Agreement), toll levels shall be adjusted in the manner set out in Schedule 4 (tolling policy) of the Concession Agreement.
The bridge company, prior to the early general elections of 2015, which saw the Coalition Government entering office, had been a source of contention, with the then government coming under fire regularly in what was considered a secretive deal, despite the transformative impact of the structure which links Berbice to Demerara.

More than 70 percent of the US$40M spent had come from CLICO and the New Building Society. However, CLICO went belly-up and the National Insurance Scheme then bought out those shares.

Shareholders have reportedly not been getting their dividends.

With nine years remaining before the bridge is supposed to be handed over to the people of Guyana, a government-ordered review last year reportedly found that the 39 pontoons were not maintained in the three-to-five year period that is required.

Patterson, in denying the bridge’s bid for the toll increase on Tuesday, disclosed that Government has offered to maintain the pontoons for the remaining nine years of the concession period.

Government is now seeking legal advice on how much legroom it has with the bridge company, a private one that has state monies (NIS) sunk into it.

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