Berbice Bridge Company cites possible bankruptcy if tolls reduced

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The Berbice River Bridge.
The Berbice River Bridge.

[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.”

17 COMMENTS

  1. Ravi you are talking through your ass,what private company that’s the lies that the feed you…the government has 74% shares in the company but is said to be a minority owner..in what world does that happen?would u Ravi invest in a company put up 74% and accept being a minority owner?

  2. BBÇI is jus playing the fool … My guess is that they are going to ask for a few billions in bailouts soon.. My take is, let go bankrupt, the pay back the investers their balance of capital they invested and take over the bridge.. Simple ..

  3. I am sure if an audit is done you will find Hugh corruption and links to others who are benefiting from this bridge conglomerate. The gov need to inforce strict governance with these kinds of humans demand a reduction in fares or face the consequences and start looking at ways to remove the entire board or ownership which ever and find people who has the building of the country at heart to run this operation. Once again I say it is time to start jailing these bastards.

  4. No one will understands the frustration berbicians feels when they had to used the ferry.They are grateful for the bridge and are willing to pay the fee.So those of you who never had the cause to go through the stress and wait for hours or some instant more than a day. stop critzed and make ungrateful comments for a service well appreciated by others.

  5. Bankruptcy when the minority investors did not put up any kind do of investments? Each minority investor should walk to the middle of the bridge and jump. Greedy bast arms just like their Chief Thief!!

  6. I totally agree with you. The government should build another bridge behind the estate which will cost less

  7. This is blackmail. It always happens in monopoly situations. So sometime in the future the tolls were to increase causing more hardship. The BBCI shareholders must understand that the safety of their investment depends on the commuters.

    What will happen if the ferry boat system is reintroduced? Government should consider that option to wake them up.

  8. Here you go now new government. Go build and expand the ferry service..Go back the the days of waiting for like 2 to 3 days to cross. You in front of the line to cross the ferry but then a whole host of vehicles just pass by and wham they gone it leaving you still at the front of the line just because you didn’t pay a bribe to cross. Be warned the worse is yet to come. US just does not care what it did to Guyanese once again. US installed their power hungry puppets and walk.

  9. No government has right to decide on the toll for using the road and bridge built by private company or corporation with a MOU and legal agreement.
    Investers risk their money and the government never has funds for such mega projects. Elections come and go and we get nothing more than false promises.

    100 days plans for Guyana is over and supporters wait with patience to to see the real changes. Stop giving statements and news headlines. Let people judge you by your good work and governance than reading false news you guys publsh everyday.

    We want to see Guyana a safer place to live.

  10. RALPH , THAT IS EASIER SAID THAN DONE. IF THE GOVERNMENT CAN’T EVEN AFFORD TO PAY THE FULL SUBSIDY , HOW CAN THEY FIND THE MONEY TO BUILD A NEW BRIDGE?

  11. These people mean to suck the life-blood from Guyanese; frustrate and embarrass the current administration;invoke legal strictures and continue laughing all the way to the bank.
    Moreover they are pushing the Government to act precipitately so that they can renege on agreements to repay NIS, etc; they would then use the Government’s action as an excuse for filing bankruptcy proceedings.
    Something in the explanations sounds ‘eerily similar’ to how a Certain famous Chat-3 would have expressed a legal opinion.

  12. I agree with Ralph, build another bridge where the bridge should have been built in the first place.

  13. i have to agree with Ralp.But i also want to know what is the position with the NIS MONEY??? Somebody has to go to jail. If its all the NIS board members let it be.
    My Father has a royal run around to get his lil pittance.

  14. Well said. That venture is another example of a monopoly intended to enrich a few at the expense of thousands. If govt announce the construction of a new bridge the CEOs will drop the price without question.

  15. Govt. Build another more affordable bridge going to new Amsterdam and bankrupt that 1940s world war era bridge that is so expensive to cross.

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