The Berbice Bridge is for the public good and must be treated accordingly

Nov 10, 2018 Letters

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DEAR EDITOR,
Reading the Stabroek News article of November 7, 2018, captioned “Berbice Bridge Company to comply with (alleged sic) ‘unlawful’ takeover” was an unfortunate occurrence.  This statement from the Company was pointless.  If it was an unlawful takeover then takes the Government to court; why comply?
Some may want to say this is a political act, but I beg to differ.  What other choice does the Minister have but to use the rule of law and the terms of the concession to ensure that the traveling public benefits from an environment that supports consistent tolls (subject to inflation)?
For the public information, the Berbice Bridge cost four times as much for a car to cross compared to the Demerara Bridge.  If this is the price for private ownership, then it makes sense to nationalize if these Berbice tolls are to increase further.
When considering this issue we must frame the entire matter at a strategic level and allowing for three pertinent matters:
1. The toll rates and the public interest;
2. The rule of the law/ terms of the concession agreement;
3. The financing model/returns to the investors.
In that regard, if the Minister did not act in light of the unyielding position of the Company to increase the rates starting at 360% and more, then he could have been accused of dereliction of his duty. It is standard practice globally that regulators must protect public health, welfare, and safety while respecting the profit opportunities of the investors when it comes to the operations of public infrastructure.
This Berbice Bridge is a public infrastructure. Under no circumstance were the recommended increases of the tolls, as suggested by the Board, in the public’s best interest, reasonable and fair.  After all, whether privately or publicly owned, the Berbice Bridge is for the public good and must be treated accordingly.
Secondly, the rule of law/concessionary agreement is framed from the Berbice River Bridge Act, Act No. 3 of 2006.  In that Act, the Minister is tasked with monitoring “the Concessionaire’s obligations under the Concession Agreement”.
If by way of that monitoring process the Minister so deems the tolls as out of order, the law provides him with the power to “specify the maximum of tolls that shall be charged during the Concession period in respect of any class of vehicles”.
It is in the law, and thus to see the Company crying “unlawful” is absolutely counter-intuitive.  If a company managing a public infrastructure behaves in a manner that is not in the best interest of the traveling public, then it is the duty of the Government of Guyana to swiftly take action to preserve law and order.
For this principled reason, I support the decision of Minister David Patterson on this specific transaction to temporarily take over the operations of the Berbice Bridge.
Now with all that said, the nation owes a debt of gratitude to the investors for investing in a project that many had said was un-doable in 2008.  When that investment was made, the economic fundamentals were much more favourable.
Since then, those economic fundamentals have deteriorated markedly because of the policy paralysis in the APNUAFC Government. The average GDP growth rate during that period (2009-2015) was just under 5%; today it is averaging around 2%.  There was a sense of economic buoyancy in the Berbice area under the PPP, which is very absent today under the APNU+AFC.
Under the PPP, there was a shortage of sugar workers; today some 7,000 of them are on the breadline, mostly from the Berbice area.  There is such a fundamental deterioration in the economic conditions in Berbice today compared to those PPP days, only the unaware will not understand that there is a direct correlation between the economic malaise in Berbice and the number of vehicles using the bridge in 2018.  A very different economic environment was present in 2009.
Unfortunately, the financial model built for 2009 was a massive success in those PPP times, but because of the poor economic conditions currently under the APNUAFC Government, it has virtually collapsed today. But in spite of this failure, the bridge must not be allowed to fail, because it serves a national need.  Therefore it is time to nationalize the bridge permanently and pay off the investors what is due to them.
The fact remains that the State has successfully managed the Demerara Harbour Bridge and that model can be easily adopted on the Berbice River Bridge.  Because of space, I shall get into the how in another letter outlining in detail some recommended models and options.  The Minister has only one option today – nationalize the bridge permanently and pay off the investors.
Sasenarine Singh

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