The Berbice Bridge Company (BBCI) is refuting government’s claim of a delay on its part for the introduction of the reduction of tolls commencing September 1.
The bridge company in a release on Saturday said it notes with regret the government’s statements on the issue, while claiming that it is as anxious as all Guyanese to provide the best service at an affordable price.
On Friday, Finance Minister Winston Jordan expressed worry over the delay of the Berbice River Bridge Company to agree to the reduction in the toll for crossing the bridge, with effect from next Tuesday.
It was Jordan who announced on August 10, during his 2015 budget presentation, that the tolls for buses and cars would be reduced from $2200 to $1900, representing a 13.6% reduction while the tolls for all other vehicles will be reduced by 10%.
To facilitate this reduction, the government has set aside $36 million in the 2015 budget as subsidy for the Bridge. Jordan explained that the government is likely to pay the bridge between $120 – $140 million annually in subsidies as the phased reduction in tolls is advanced.
However, the bridge company says that while the government proposed a schedule of subsidies to commuters based on the existing toll structure it remains interested in further discussions on the proposal for an extension in the concession period from 21 years to 40 years or for the government to give consideration to an application for an increase in toll made to the PPP/C Government on March 15, 2015.
“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,” a statement pointed out.
The company said so far no agreement has been reached between itself and the government on the issue.
The company claims that according to 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.
“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. In 2015, over $500M in debt repayment to investors is required. 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,” the release explained.
As such the company explained that any change in the Concession Agreement and the Toll Order which is made by the Government (the last one was made in 2009), requires the approval of the Trustee and the Shareholders.
“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 added. It is expected that once agreement is reached with the BBCI, the Government and the BBCI will sign an amendment to the relevant agreements and the Government will gazette the change in tolls in a revised Toll Order.