PNC will Bankrupt the Berbice Bridge that will Eventually led to the closing down of this Berbice lifeline.

Bankruptcy looms if subsidies based at present rates

Berbice Bridge toll reductions…

…Directors duty-bound to inform stakeholders

Despite the subsidies promised, the Berbice Bridge Company Inc (BBCI) indicated that while it sup-ports moves to

Toll booths at the Berbice River Bridge

Toll booths at the Berbice River Bridge

make the Berbice crossing more affordable, it could go bankrupt if Government arbi-trarily moves ahead with the toll reduction without fully honouring the legally binding agreement be-tween the Company and the Government to have tolls adjusted within specified timeframes.
Both the A Partnership for National Unity and Alliance For Change (APNU/ AFC) precipitated this situation when they used their one-seat majority in the 10th Parliament to pass a motion on March 10 2015 to lower the Berbice Bridge tolls without taking into consideration that the move was an in-fringement on a legal agreement and that the Company would incur significant losses. At that time, the company had applied to the then PPPC administration for the legally specified toll adjustments.
Finance Minister Winston Jordan on Friday blamed the Bridge Company for the setback in the toll reductions, which Government announced would take effect on September 1.
“With September 1, fast approaching, the Government is concerned that these delaying and dilatory manoeuvres

Finance Minister Winston Jordan on Friday blamed the Bridge Company for the setback in the toll reductions

Finance Minister Winston Jordan on Friday blamed the Bridge Company for the setback in the toll reductions

appeared designed to frustrate the reduction in tolls and hold the travelling public hostage,” Jordan exclaimed.
However, in response, the Bridge Company issued a release, expressing its rejection  over the Minis-ter’s accusation.
The Company explained that its Directors are constrained by the Berbice Bridge Act and Regulations and the Concession Agreement – the legally binding agreement between the Government of Guyana and the BBCI; therefore, it cannot introduce a reduction without proper discussions with its principals  the shareholders, bond holders and trustees.

 

Discussions ongoing
In fact, the Company pointed out that no fixed agreement ha even been reached in relation to toll reductions as the discussions are still ongoing between Government and the BBCI Directors.
“Discussions also took place concerning the timing of subsidy payments, but BBCI team made it clear that nothing could

Despite the subsidies promised, the BBCI indicated that it could go bankrupt if Government haphazardly moves ahead with the toll reduction without honouring the legally binding agreement between the Company and the Government

Despite the subsidies promised, the BBCI indicated that it could go bankrupt if Government haphazardly moves ahead with the toll reduction without honouring the legally binding agreement between the Company and the Government

be agreed upon until the matter had been brought before its full Board and stakeholders,” the Company stated.
It also noted that Government has other obligations to honour before the Company agrees to toll reductions.
“The Government proposed a schedule of subsidies to commuters based on the existing toll struc-ture. But the Minister also accepted that “the Company would like further discussions to take place on the proposal and an extension in the concession period from 21 years to 40 years: or for the Govern-ment to give consideration to an application for an increase in toll made to the PPP/C Government on March 15, 2015.” The Minister has accepted that no agreement was reached with BCCI,” BBCI stated.
The Company also noted that, “the Government in other fora proceeded as if its proposal was au fait accompli, simply to fulfil a campaign promise on the BBCI tolls, which was made without any consultations with the BBCI.

The au 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 Agree-ment, 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.”
Against this background, the Directors convened an Emergency Meeting on August 27 to discuss a way forward on the toll reductions.

 

Lost revenue
“Based on the figures that had been submitted to the Government, because tolls had not been in-creased based on the Toll Formula under the Concession Agreement, revenues of $1,228,523,720 had already been lost,” the Company said.
It also noted that because of the then Opposition’s successful move to lower the tolls in the 10th Parliament, the Company is already heavily indebted due to revenues lost.
“In June 2014, based on its financial model and debt commitments, BBCI began to repay the principal on its bonds. 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 mo-tion in the National Assembly on May 15, 2014 to reduce tolls by more than half. This motion was first tabled in December 2013,” the Bridge Company said.
Therefore, the Company said 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 re-pay debt in 2015 and possible insolvency.
“In 2015, over $500 million in debt repayments 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 a decision must involve an agreement with the Trustee and the Shareholders.
As such, any change in the Concession Agreement and the Toll Order which is made by the Govern-ment (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 Four of the Concession Agreement and projected in the financial model referenced in the Concession Agreement,” the Company explained.
“A subsidy divorced from honouring the BBCI Concession agreement could very well result in bank-ruptcy for the BBCI,” it reiterated.
The Company noted that it is willing to provide the best service to the Berbice Bridge commuters at an affordable cost but reminded that it also has to fulfil their fiduciary responsibilities and also act in accordance to the law.

Reduced toll
During his budget presentation, Jordan had indicated that from September 1 this year, the toll for passenger vehicles crossing the Berbice Bridge would be reduced from $2200 to $1900.
The move, he said, was the first of a phased reduction of the tolls which he said have been a worri-some issue for Guyanese, particularly those living in Region Five (Mahaica-Berbice) and Region Six (East Berbice-Corentyne).
The annual subsidy for the BBCI, Jordan informed, stands between $120 million and $140 million.
However, it was already established by observers that the toll $300 toll reduction will not benefit those who really need it, given that the everyday commuter who normally uses public transportation given that bus drivers and taxi drivers already insisted that they will not lower their fares, citing its in-significance.

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Original Post

Despite the subsidies promised, the Berbice Bridge Company Inc (BBCI) indicated that while it sup-ports moves to

Toll booths at the Berbice River Bridge

Toll booths at the Berbice River Bridge

make the Berbice crossing more affordable, it could go bankrupt if Government arbi-trarily moves ahead with the toll reduction without fully honouring the legally binding agreement be-tween the Company and the Government to have tolls adjusted within specified timeframes.

EH HE - BOBBY GETTING 23% RATE OF RETURN ON HIS INVESTMENT AND A LITTLE REDUCTION WILL CAUSE HIM TO GO BANKRUPT?

 

YEH RIGHT.

 

 

NEW GPC and Hand-In-Hand own 50% of Berbice Bridge

AUGUST 31, 2015 | BY  | FILED UNDER NEWS 

– Contractual agreements allow providers of 5% of capital to control the bridge and receive 23% annual return
By Kiana Wilburg  

NEW GPC and Hand-In-Hand  own 50% of Berbice Bridge

August 31, 2015 | By | Filed Under News 

– Contractual agreements allow providers of 5% of capital to control the bridge and receive 23% annual return By Kiana Wilburg  

The saga of the Berbice River Bridge Company Inc. continues to reveal even more interesting details as Kaieteur News understands from experts very close to the Bridge that the current contractual arrangements allow for two entities to control 50 percent of the company: The NEW GPC and Hand In Hand Trust Corporation. New GPC, a company owned by Dr. Ranjisinghi ‘Bobby’ Ramroop has close relations to former President Bharrat Jagdeo and, according to an article on chrisram.net some time ago, that company has two Directors on the Board. The structure of the company allows equity shareholders whose investment is less than five percent ($400 million) of the total funds of the company to exercise controlling interest over the company. Of the $400 million, the Ramroop Group owns 40 percent and the Hand-in-Hand Group owns 10 percent. The contract also provides for the equity shareholders to receive 23 percent on their investments. The coalition government, in the lead up to the May 11, 2015 elections, had accused the previous administration of hijacking the Berbice Bridge Company Inc. (BBCI), deliberately structuring operations in a manner that allowed investors and their close friends with disproportionately small investment to control the company. To ease the burden on users of the bridge, Finance Minister, Winston Jordan, pursued the reduction of the tolls in a phased manner. The first phase sees the toll reduction for cars, from $2,200 to $1,900. This was announced during the budget presentation. It was set for implementation on Tuesday, (September 1). Jordan had also indicated a 10 percent reduction on other categories of vehicles. But the Finance Minister at a recent post Cabinet press briefing revealed that the implementation of the reduction seems to be in limbo at the moment. He disclosed that the prescribed toll reduction was in limbo because BBCI’s Directors decided to take that matter to its shareholders. Jordan believed that the Bridge Company was deliberately delaying the implementation of the toll reduction. The reduction is estimated to see the Company collect annually about $120M-$140M less from commuters but with Government compensating them with an equivalent amount. For the remaining months of the year, the Government has allocated $36M.

New GPC’s owner, Dr. Ranjisinghi ‘Bobby’ Ramroop

New GPC’s owner, Dr. Ranjisinghi ‘Bobby’ Ramroop

Former President Bharrat Jagdeo

Former President Bharrat Jagdeo

In a full page advertisement published in yesterday’s edition of Kaieteur News, the company is denying that it is deliberately delaying the reductions. “This is not so. The BBCI is as anxious as all other Guyanese to provide the best service to the Berbice Bridge commuters at an affordable price.” BBCI pointed out that 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. The Bridge Company said that it signed a legally binding contract with the PPP/C Government called a “Concession Agreement”. The statement noted that at an initial August 12 meeting between the government and the Company, the Government proposed a schedule of subsidies to commuters based on the existing toll structure. BBCI said that it stressed during the meeting with Government that it would like further discussions to take place on the proposal and 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. The government said that no agreement was reached with BBCI. “We cannot therefore understand why the Minister would suggest that ‘delaying tactics’ are being employed. Other discussions also took place concerning the timing of subsidy payments but the BBCI team made it clear that nothing could be agreed until the matter is discussed by its full board and stakeholders.

New GPC director, Ravie Ramcharitar

New GPC director, Ravie Ramcharitar

Director Keith Evelyn

Director Keith Evelyn

The company said that Government proceeded as if it was a done deal, simply to fulfill a campaign promise on the BBCI tolls. This was made without any consultations. BBCI also claimed that it lost $1.2B because it has not been granted an increase in tolls. It could face insolvency if the process is not done right, BCCI added. “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.” This year, 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.” 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, BBCI claimed. The company said that it expects government to fully commit 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 current Directors of the Company are said to be Keith Evelyn, Ravi Ramcharitar, Avalon Jagnandan, Gillian Burton, Egbert Carter, Paul Cheong, Cecil Kennard, and Maurice Solomon. Jagnandan and Ramcharitar are both Directors in New GPC. Government’s lead negotiator in the toll increase is Attorney-at-Law, Chris Ram, while for the BBCI, Ravi Dev, is representing New GPC on the Board. Ram, earlier this year, wrote that Government, inclusive of the NIS, owns 76 percent of the issued shares of the company. NICIL, Ram said, owns what is called a Special Share in the company and according to the Articles of Amendment of the company “no action can be taken by the Bridge Company, without the affirmative vote” of NICIL. The NIS has $950M in Preference Shares and is entitled to fixed dividends. The equity shareholders are Secure International Finance Company ($80 million); Demerara Contractors Limited ($40M); Hand in Hand Motor & Life Insurance Company ($40M), the Ramroop Group ($160 M) and the NIS ($80 M). Ram, who has written extensively on the Bridge, has lamented the fact that despite having some 70 percent of the issued shares as well as a Special Share, control of the company is exercised by less than a handful of entities. The lawyer has also written on various occasions noting the losses being made by the company due to its contractual arrangements. Finance Minister Jordan had lamented on subsequent investments into the bridge by NIS. In the National Assembly on Friday, he described the investments as being “reckless” and “criminal”. He said that between 2009 to now, NIS has lost $1.8B and in spite of this, made another insane and suspect investment into the Berbice Bridge of nearly $1B to which they are still to collect income on. Jordan said that NIS is at a point where it cannot give full benefits to its faithful contributors and believes that the Consolidated Fund at the end of the day may be asked to make good on this loss.

Originally Posted by yuji22:

Welcome to Change, PNC style.

Quit the racist bullshit about PNC style and use your damn brain in some patriotic way to contemplate how to salvage some modicum of decency. These are people who are greedy. They wanted and were allowed avenues for  predation on a poor population. Contrary to your yapping of wealth in the region these people are being gouged and can barely pay the tools. These people have to be brought back in line without the opportunity to hide behind the law that allowed them excesses. They cannot get the kind of returns on capital anywhere else on the planet.

 

The Granger regime needs to pull back the Lease of 25 hectares of land around this bridge. If it cannot be done then make sure there is a crab or a snail there we need to put on a protected list so these bitches do not get the chance to build. The administration can also allow the same build out of oil facilities and harbor on the the other bank and let these bitches stew.

Originally Posted by Billy Ram Balgobin:

Gov't. ought to stay out of business and let the free market system function as it should. If they believe competition from ferry service can lower the tolls charged on the Bridge then so be it.

A free market place did not create this milk cow. It was created out of an investment of over 90 percent or more of state assets.

Originally Posted by Mitwah:

Screw the PPP leeches. Let it go bankrupt. There should be no tolls.

 

The PPP is not getting the monies.

The Government should subsidize the tolls on the bridge but in order to do so, they have to raise taxes across the board.

Originally Posted by Billy Ram Balgobin:

Gov't. ought to stay out of business and let the free market system function as it should. If they believe competition from ferry service can lower the tolls charged on the Bridge then so be it.

This Government doesn't know how to do Business.

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