The government wants to own the bridge

Oct 18, 2018 Features / Columnists, Peeping Tom

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Guyanese are gullible. They are easily deceived into believing something is true without uncritically examining why what they are told may not be what they think it is.
The biggest suckers of all are in the media. Some media practitioners are easily fooled, because they do not take the time to consider all the issues or to listen to all sides of a story – a cardinal element of fairness.
The Berbice Bridge Company Incorporated (BBCI) has sent the media into a fizz when it announced increased tariffs of more than 300%. A frenzy broke out, with media houses immediately questioning private transportation operators about the implications of the proposed increased. At no point so far, has any media house sought to question whether what we are seeing is a political and corporate smokescreen.
The proposed increases, from a financial point of view, make no sense. The bridge owners could not be serious about those tolls, because even if they are ratified, they will result in such a significant reduction in traffic that even the staff of the BBCI would not be able to be paid.
The proposed tolls are a bluff, but not a blind’ man’s buff. But the media has not considered this fact either. Neither has the media questioned why it is that the BBCI would choose November 12, 2018, as the effective date for the announced increases
Why the date of local government elections? Why not the 1st November of the 1st December or even immediately?
Why the very date when Berbicians go to the polls to elect their local government representatives? Is there a political undercurrent in this announcement? It is for the media to ask and then to find out.
The Berbice River Bridge is a public-private partnership (PPP). The APNU+AFC coalition was opposed to this financial model of the bridge because they saw it as a way of using government resources to enrich certain friends of the government. They feel that the NIS monies ought not to have been invested in that facility even though they can point to no other instrument which would yield the return that the investment offers to its shareholders.
From day one, the new government was hell bent on proving that the financial model of the bridge was flawed and intended to fleece government investors such as the NIS.
The problem is that the government wants to eat its cake and have it too. It wants to go after the private investors in the bridge but it also wants to keep the bridge. The only way that the government could have had its cake and eaten it was to seize control of the bridge.
But it cannot do that, because nationalization has gotten a bad name. And the international organizations had forced the PPPC to pass legislation which effectively outlaws nationalization without compensation at market values.
Therefore if the government wants to take over the bridge, it has to buy it from the owners. But that is not an option that the PNCR is interested in. The PNCR’s way is to bully and intimidate. And the AFC has fallen into line.
The APNU+AFC coalition had made an election promise that it would have significantly reduced the tolls. Supporters of the parties believed that this meant that they would pay about the same amount as is charged to cross the Demerara Harbour Bridge.
Reality hit the APNU+AFC when they got into office. They tried to bully the BBCI to reduce tolls. The BBCI had to remind them that the bridge is a corporate body and it was the shareholders which had to make that decision.
The government, instead of admitting that its election promise was too ambitious, decided to behave like a dockyard bully. It began to pressure the company to reduce tolls. It did this by additional ferry crossings and even for a period, granting persons the right to travel free on the ferry. In the end the tactics did not work, and the government and the BBCI reached an agreement for the government to pay, from taxpayers’ monies, a $300 subsidy for motor cars. Just so that it could say that it did something in relation to the tolls.
Well, the government’s bullying tactics did not go unnoticed, because one shareholder offered to sell its shares, and the government did manage to secure better representation on the BBCI Board.
The only way that the government is going to be able to keep its campaign promise of significant reduction in the bridge toll is if it takes over the bridge. But it does not want to buy the bridge, and it cannot nationalize it without paying market compensation.
And so the next best option is to refuse to grant increases in tolls, and so force the private shareholders to walk or face bankruptcy.
This is what is playing out between the government and the BBCI. But it is not as straightforward as the government feels. There are serious implications if this public-private partnership fails. But that is something the government has not considered, and which will be discussed in tomorrow’s column.

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