[www.inewsguyana.com] – The Berbice Bridge Company Incorporated (BBCI) has defended its stance in the implementation of reduced tolls at the Berbice River Bridge as announced by the government, contending if not done to their specifications, the company stands the risk of going bankrupt.
Government on Friday, August 28 stated that the BBCI was employing some amount of delay tactics in the implementation of the 10% and 13% reductions at the Berbice Bridge. But the Company, in a statement on Saturday, said that this was not the case. In fact, BBCI says that it is anxious to provide its service at an affordable price.
“Just as the government was forced to defer several of its campaign promises based on the need to comply with existing laws, so too are the Directors of the BCCI constrained by the Berbice Bridge Act and Regulations and in the legally binding agreement between GoG and BBCI called the Concession Agreement,” the release stated.
The company says it cannot understand why Finance Minister Winston Jordan would suggest that “delaying tactics” are being employed, noting that other discussions also took place concerning the timing of subsidy payments but BBCI team made it clear that nothing could be agreed until the matter be brought before its full Board and stakeholders.
“The government in other fora proceeded as if its proposal was a fait accompli, simply to fulfill a campaign promise on the BBCI tolls, which was made without any consultations with the BBCI. The fait accompli was that its proposed commuter subsidy would be based on the existing toll structure, and that the revised toll structure as adumbrated in the Concession Agreement, and brought to the attention of the government, would be ignored. The other win-win scenario of an extension of the concession period that would have allowed the present toll structure and the subsidy levels proposed by the government would presumably also be placed in doubt,” the company claims.
It was stated that the Directors convened an Emergency Meeting on Thursday August 27, 2015 to make a decision on going forwards. It was reiterated that based on the figures that had been submitted to the Government, because tolls had not been increased based on the Toll Formula under the Concession Agreement, revenues of $1,228,523,720 had already been lost.
Another item discussed was that in June 2014, based on its Financial Model and debt commitments, BBCI began to repay the principal on its bonds. According to the statement, this increase in demand for cash was supposed to have been met by increases in tolls.
“However, such an increase was deemed untenable particularly after the then Opposition passed a motion in the National Assembly on May 15, 2014 to reduce tolls by more than half. Directors of BBCI, have a fiduciary duty to act in the best interest of the company. Any agreement to a subsidy without honouring the toll adjustment formula set out in the Concession Agreement will result in the BBCI defaulting on its obligation to repay debt in 2015 and possible insolvency (bankruptcy).”
It was stated that in 2015 over $500M in debt repayment to investors is required and directors cannot change the agreements reached with the investors in the bridge as represented by the Trustee for the debt and the Shareholders for the equity.
“Such decision must involve an agreement with the Trustee and the Shareholders. Any change in the Concession Agreement and the Toll Order which is made by the Government (the last one was made in 2009 by the Minister of Public Works), requires the approval of the Trustee and the Shareholders. All investors relied on the toll making adjustment in the Financial Model that is referenced in Schedule 4 of the Concession Agreement and projected in the Financial Model referenced in the Concession Agreement. The BBCI would expect that Government is fully committed to honouring the legislation, concession agreement, and the rights enshrined in the various agreements related to the Berbice Bridge. A subsidy divorced from honoring the BBCI Concession agreement could very well result in bankruptcy for the BBCI,” the statement noted.
The Directors therefore concluded on Thursday that the revised toll schedule per the Concession Agreement must form the base line for computation of the Government subsidy for the Berbice Bridge commuters.
“Any variance from this withoutt the agreement of the shareholders, debt holders and trustees would have exposed the Directors to be sued in their personal and professional capacities for failing to perform their fiduciary responsibilities.”