A recent letter by Berbician Mr. Nowrang Persaud advocating for the Government to assume full ownership, control and management of the Berbice River Bridge appears to have aroused the disfavour of Minister of Public Security Mr. David Patterson and the Department of the Public Information. The Department quoted the Minister as assuring all Berbicians and users of the Bridge that the Government is not contemplating any increases to the Berbice Bridge Toll.
Minister Patterson seems to believe that it is that simple and simplistic. He must not only be familiar with the Provisions of the Berbice River Bridge Act but also the Concession Agreement dated June 26, 2006 under which the Bridge operates, and over which he exercises ministerial responsibility and has certain obligations to the Bridge Company and its investors.
The Concession Agreement was made under the laws of Guyana and obligates the Minister and the Government to grant periodic increases to tolls based on specific indications and circumstances as computed under Schedule 4 to the Concession Agreement.
The Bridge is a public/private partnership in which the Government made a contribution of land and access roads and the private sector provided the capital funding and the management of the Bridge with financing and operating costs being met out of user tolls. From very early, questions were raised about assumptions on traffic flows and the expectation that the investors would have fully recovered their investments and returns by the time the concession period ends in 2026 and the Bridge is handed over free of cost to the Government.
In the early years, instead of allowing toll increases, when the Bridge was unable to meet certain obligations, the PPP/C Government waived certain sums receivable by NICIL as holder of $950 million worth of preference shares. Fortunately for the then Administration, the instalments of several tranches did not become due until later but the chickens have now come home to roost and that reality now confronts the Bridge Company and the current Administration.
In the process, the situation has moved from bad to worse, from difficult to dire and in the case of just one investor, the decision by the Minister can seriously jeopardise its financial stability. That single investor has a total investment in the Bridge Company in the form of ordinary and preferred shares and loans of $2,367 million. Additionally, the Company owes that investor unpaid preference dividends, unpaid interest and unpaid bonds in the sum of $938.3 million, making a total of $3,305.3 million.
While there are other domestic investors who are also owed significant sums, there is something particularly important about this investor: it is the National Insurance Scheme. The funds of the Scheme really belong to the workers of the country and the eventual loss of such magnitude will make the tenuous situation of the Scheme disastrous. Mr. Patterson and his colleagues in the Government must therefore consider whether they desire such an outcome.
Commendably, the Government does not wish to impose further hardship on Berbicians with the estates closure and a slowing economy already hurting many communities. But a government’s functions include not only its social obligations but its duty to comply with the laws – the very essence of the rule of law, the foundation of our constitution.
Over the years I have written extensively and frequently on the economics of the Bridge and the tolls charged to its users and have made a number of recommendations thereon. Among these was a recommendation that the Government buy out the investors and take over the Bridge which serves a public function. By strangling the Company and its investors, the Government is not only depriving them of their rights under the law and the Concession Agreement but is bullying them to provide at significant losses a public good and service which is the duty of any State.
I sincerely hope that the Government will understand the iniquity and urgency of this situation and move quickly to address it. If the Government persists with this inaction, it may very well find that when it inherits the Bridge in another few years, it will be in such a state of disrepair that it may regret its shortsighted action.
Finally editor, it does not escape the notice of many Guyanese how willingly the Government is prepared to defend vigorously the highly flawed Petroleum Agreement with Esso on the basis of sanctity of contract (what is sacred about a flawed and immoral contract?) but are prepared to disregard and consciously ignore the laws of Guyana in respect of domestic investors. Seems a clear case of servility to foreign investors but contempt for domestic investors.