Berbice Bridge wants increased tolls; investors discouraged
The Berbice Bridge Company Inc. (BBCI) wants commuters to pay more for crossing so it can generate enough revenue to cover maintenance and operation costs, as well as make a profit so that shareholders can receive dividends.
Since the bridge was opened in 2008, the 39 pontoons under the floating structure have not been maintained and the shareholders have not received dividends because the Company never made profits.
Chairman of the Board of Directors, Dr Surendra Persaud, told a news conference Tuesday morning that the Guyana Government has failed to honour its obligation with private investors to have the implementation of a structured increase of the tolls and it is currently exploring the possibility of filing a lawsuit for breach of contract.
Dr Persaud, who is also Chairman of the National Insurance Scheme (NIS) – the largest shareholder in the BBCI – said this development is worrying for investors and can deplete private sector confidence in the Government.
“It is likely to affect the willingness of the private sector to partner with the Government in future infrastructure projects like the New Demerara River Bridge…,” he expressed.
He explained that with the NIS, it would be challenging to convince the Board to invest in another similar venture given the current situation with the BBCI.
BBCI qualified to apply for toll increase in 2014 and when the first application was dispatched to the Government in March 2015, the request was ignored. Subsequent applications were made in August 2015 and January 2016, however, Minister of Public Infrastructure David Patterson did not respond, Dr Persaud said.
Dr Persaud emphasized that an increase in the fee structure is necessary as the BBCI is nearing bankruptcy, having already racked up $2.8 billion in losses.
The proposed increases for various categories of vehicles are cars from $2200 to $8040; minibuses from $2200 to $8040; pickups from $4000 to $14600; 4WD from $4000 to $14600; small trucks from $4000 to $14600; medium trucks from $7600 to $27720; large trucks from $13600 to $49600; articulated trucks from $32,000 to $116,680 and boats from $110,000 to $401,040.
Asked whether these increases are feasible for the average man to pay, Dr Persaud said as a Company, the BBCI is only concerned with the stipulations of the contract.
He proffered that the Government can propose options after taking into consideration the plight of commuters. “But we are bound by contract,” he said.
The BBCI’s Finance Controller, Stephen Rambajan explained that the toll formula – which is the sole authority on the determination of the tolls – is designed to ensure that all operational, maintenance, debts servicing and dividends are covered by the revenue earned from tolls.
Rambajan explained that any excess revenue generated by the tolls during a given year will be applied to an adjustment in the following year.
Currently, the BBCI generates about $3M on a daily basis.
The Berbice Bridge was constructed through a Public Private Partnership (PPP) arrangement. The BBCI was incorporated by the private investors who will manage and operate the bridge for 21 years after which it will be transferred to the Guyana Government.