Jagdeo flays bridge takeover -opposed to 19-year contract extension

D2 posted:
Baseman posted:
Django posted:
D2 posted:
Baseman posted:

I don’t know who to trust.  Are there independent auditors who can vouch?

the proposed rates are preposterous. Something is wrong here. If the financial structure for the minuscule portion these "investors" put in compared to the state for a business they control with lots of concessions they need to explain themselves.

What is wrong is the revenue stream from the Bridge is not enough to cover costs.Apparently there is not enough traffic.

It was fundamentally flawed to assume toll revenues could or should cover operating costs.  This was compounded with the involvement of private equity partners in the mix.  

This bridge has both a tactical and strategic component, as such, the model should have included govt subsidy at the inception.  

The presumption here is people will suck it up and pay whatever the price.  Well, sooner or later you starve the goose.  

The proper way was to set a reasonable price the people could afford to pay and then devise a model to cover the costs.

TK said that the financial model proposed was a farce. He also said the project is only viable as a government infrastructure project.

He is correct because Baseman felt the same!  So if he agrees with the Base...he is correct!!!

caribny posted:
Zed posted:

What part of what Jagdeo said did you diisagree with? State it then there can be a sensible discussion, if you can hold off cussing.

I keep hearing about the expectation of massive profits for the shareholders but from what I am reading, that statement is a stretch. Maybe someone has the actual figures since the bridge has been in operation and can share it so the discussion can be evidence-based.

If the bridge is currently profitable then why do the owners want a pay increase?  Why did the owners ensure that the bridge had absolutely no legal competitors?

The deal was a bad one from the beginning and even a Jagdeo lover like Baseman agrees.

Hey hey...I agree with facts and reason.  That's why I also, at times, agree with the PNC...and sometimes even you, but don't sit to comfortable!!

They might well be headed this direction!

Conclusion

The BBCI is in serious financial difficulties to continue operating for the foreseeable future since: (i) funds have to be found to repay the loans and bonds that were used to finance the construction of the Bridge; and (ii) urgent maintenance works, such as replacing the pontoons, need to be carried out. The solution is not the more than doubling the rates of toll for vehicles and vessels using the Bridge. As a short-term solution, the Government needs to assume responsibility for carrying out the maintenance works. In the long-run, BBCI in collaboration with the Government should consider the financial restructuring of its operations by either an offer to convert debt to equity. If lenders are unwilling or unable to do so, the Government should repay them and treat the amounts involved as equity in the books of BBCI. In this way, some 58 percent of BBCI’s revenue, which goes towards the servicing of its debts, will be saved.

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