Those questionable friends of Jagdeo invested 5%, but still can't make a fortune from their meager stake. Imagine if they had invested 95%. They would have been declared bankrupt by now.
The government should issue a compulsory purchase order on the bridge since the private investors have failed to abide by the agreement under which they were given control of the bridge. 

The bridge economic model is a total disaster.  The WB said it was not viable due to volumes.  Applying a public private partnership model compounds that problem.  The high tolls ensured this outcome.  I don’t know why Jagdeo expected it would turn out differently.  

Jagdeo rant now is disingenuous.  If the volume of traffic is below what was expected, the rates will need to go up.  Unless he can point where provisions were made to plug this shortfall, then he talking hot air!

His bad judgement is being exposed here.  This is another “Skeldon” disaster.

Attached

BERBICE RIVER BRIDGE CONCESSION AGREEMENT

Hopefully the crew read it,maybe they may say too much jargon to read.

PPP engaged BBCI in 2014 and had win-win solutions

Oct 21, 2018 Letters 0 Comments

Berbice Bridge Company Inc. (BBCI) has held both the PPP and APNU responsible for not honouring increases in tolls pursuant to the Berbice Bridge Act and the Concession Agreement. The Berbice Bridge is a PPP project which has been heavily criticized by APNU/AFC. In fact, in 2013 even before the tolls were scheduled to change, APNU sought to politically sabotage the Berbice Bridge by proposing a motion in Parliament to reduce tolls. This motion was passed in May of 2014 and proposed reducing tolls by over half. APNU actions scared investors in the bridge, who became concerned both about their existing investment and about reinvesting funds back into the bridge. By 2015, when a larger toll increase was needed, elections deferred all decisions. In the resulting change, from the PPP to the APNU-AFC Government, APNU-AFC inherited a problem of their own making.
In 2014, when I was President, we met with the Berbice Bridge Board with the objective of finding ways to avoid a toll increase while at the same time ensuring that the Berbice Bridge was able to honour its obligations. We viewed the toll levels like the way GPL handled its tariffs to maintain a constant level of tariffs, despite rising and falling oil prices. Our solution was simple—given that tolls were only going up to secure cash to reduce debt, Government would support investors, reinvesting some monies at a lower interest rate, and have this repaid in the last few years of the bridge concession. Under this scenario, tolls would not go up, but it would also not go down as quickly as projected. Other solutions included increasing the life of the concession, but this was viewed as less preferable than solutions possible over the remaining life of the concession.
In 2006, every investor received a financial model that contained a toll index. I have no doubt that the PPP has no objection to this model being made public. The financial model showed that tolls would remain constant until 2014. In 2014, tolls were scheduled to increase 6.4% and again in 2015 by 17.3%. Thereafter tolls would start dropping. The table below shows the toll index and the % change in tolls from the prior year. The last column shows how much a vehicle would pay based on this toll index and using the tolls in existence since the start of the bridge. Despite the modest increase in 2014 and 2015, it fell in the follow years, such that by 2019, tolls were projected to be lower than that in 2008 when the bridge opened.
The key reason tolls were scheduled to go up from 2014, was that debt repayment started in 2014. Prior to 2014, only interest was being paid. But as debt was repaid, less money was needed for interest expense. By2019 tolls were lower than 2008, and by 2021, tolls were projected to be substantially below where it was in 2008 falling over 40% over 2020. In 2026, the bridge would be handed back to Government at no cost, and fully repaid. By that time, tolls would be almost negligible.
Some persons have argued that the Berbice Bridge financial model was flawed. We in the PPP believe the opposite. The bridge has performed largely as projected. In fact, as the following table (based on audited financial statements of BBCI) shows, in every year, toll revenue was greater than projected. The table shows that as the Berbice Bridge repaid debt, its interest expense started to reduce. In fact, during the 2009-2017 period, actual revenue was G$2 B more than projected revenue. During the same period, the BBCI repaid over $2.3 B in debt. Annual interest expense which peaked in 2013at $789 M, was reduced to $636 m in 2017, a reduction of $150 M. This trend would continue as debt is repaid.As debt is reduced, interest expense is reduced, allowing more of the bridge revenue to go to debt reduction. Using 2017, as an example, with total revenue of $1.37 B, interest expense was $636 M, leaving $634 M left over for operating expenses and debt repayment. In 2017, G$591 M was used to reduce debt.
Had APNU not sought to sabotage the Berbice Bridge project by its opposition and Parliamentary motion, solutions to resolve the timing of debt repayment would easily have been agreed by the PPP and the BBCI to avoid toll increases.But we all know that the APNU motion sabotaged this and held the BBCI hostage. The bridge financing made sense. It did not have a Government guarantee and truly attracted a broad range of private sector interests. Today the pending default can threaten major financial institutions. Despite the PPP having a record of honouring contracts, such as GTT, Omai, Barama, and Aroaima, APNU seems bent on dis-honouring contracts or failing to negotiate acceptable compromises to both sides. Our entire financial sector is now exposed. And so, the current impasse could have been avoided. Solutions were readily available if APNU/AFC only showed the will. But political stubbornness and vindictiveness against the PPP, now leaves the BBCI facing debt repayments without the resources to pay these. Is APNU pushing BBCI into bankruptcy?
Donald Ramotar, Former President—Republic of Guyana

Government not budging on Berbice Bridge tolls - 2014 

Minister of Public Works Robeson Benn on Thursday staunchly defended his position of refusing to reduce the Berbice River Bridge tolls. The call came through a motion tabled by Joseph Harmon of A Partnership for National Unity (APNU) who called on Government to instruct its representative on the Board of Directors of the Berbice Bridge Company, to demand an immediate reduction in the tolls charged for crossing the bridge.

“This motion… it’s ill advised, it is not the type of resort available for the Parliament to deal with … the Berbice River Bridge as we all know, is a successful project as a public private partnership, it has been built despite many attacks and criticisms, it has been operating properly, it is a signal achievement for public private partnership method…” the Minister stated.

Minister Benn rejected the call stating that to do so would cause the bridge to face financial collapse and scare investors away. He explained that the investors would develop the fear that their assets would be easily expropriated, adding that in this case, assets would be taken away from Guyanese, unlike foreign investors who brought slaves and indentured workers to Guyana.

“This effort unfortunately sends a very bad signal from the parliament with respect to how we mobilise funds for investment, with respect to how we invite investment and people to come to partner and work with us in Guyana …”

He named Republic Bank, Guyana Bank for Trade and Industry, Scotia Bank, Demerara Bank, Citizens Bank, NIS and NBS as having interest in the bridge, and stated that the opposition’s motion imperils their investment.

“This is a shot fired across the bows of all those persons who want to continue to invest in our country. This is an attempt to make a de facto expropriation or nationalisation of a private investment. This is what it is!…this is when we will be expropriating, taking away the money and hard earned cash and interest investment from our own people. Unheard of!”

The Minister also pointed to the inaccurate figures used about profit making by the Berbice Bridge Company, slamming Harmon for his attempt to gain political mileage among Berbicians. He noted also that rates paid during the ferry service in 2005 and the toll rates now are similar.

Minister Benn also disabused the opposition’s notion that that the National Industrial & Commercial Investments Ltd. (NICIL) was a preferential shareholder, indicating that the body only had one share. He further maintained that the company is privately-owned and none of the government’s representatives enjoys voting rights.

He insisted too that he would not order the reduction of the toll, “…until by economic modelling and defining we can determine that it would be of benefit to the Bridge Company and the shareholders and the people of Guyana as a result.”

The Minister was supported in his rejection by Minister of Tourism, Industry and Commerce, Irfaan Ali who noted that the toll was determined by several factors including the projected number and frequency of traffic, as well as willingness-to-pay survey by the Inter American Development Bank that was conducted in 2002. The survey had solicited several views such as the need for constructing the bridge, willingness to pay and problems persons had encountered travelling by ferry.

Minister Ali cautioned that if the toll was lowered, it would affect the contractual obligations and could lead the bridge company to sue government for breach of contract and damages.

Minister Ali also supported Minister Benn’s statement that government and NICIL have no direct ownership in the Berbice Bridge Company.  He however, added that while the National Insurance Scheme (NIS) owns 20 percent of ordinary shares, it is only represented by one Director on the Board, and no one Director can determine or undermine the decision of the full Board.

However, opposition MPs charged that the bridge has been responsible for higher cost of living including steep transportation costs and was pressuring the people in Berbice. MP Dr. Veerasammy Ramayya of the Alliance for Change posited that the current administration could use the reduction of the toll as an incentive to win back much needed seats in its traditional Berbice stronghold.

Nevertheless, despite the Government’s rejection, the combined parliamentary opposition approved the motion.  (GINA

http://newssourcegy.com/news/g...erbice-bridge-tolls/

Baseman posted:

The bridge economic model is a total disaster.  The WB said it was not viable due to volumes.  Applying a public private partnership model compounds that problem.  The high tolls ensured this outcome.  I don’t know why Jagdeo expected it would turn out differently.  

Jagdeo rant now is disingenuous.  If the volume of traffic is below what was expected, the rates will need to go up.  Unless he can point where provisions were made to plug this shortfall, then he talking hot air!

His bad judgement is being exposed here.  This is another “Skeldon” disaster.

Less traffic could be the result of no economical activity in Berbice. The government closes the estate, excessive rainfall and poor drainage cause rice farmers to import rice to meet its obligations, Berbicians has no money to spend... thanks to the PNC government. It’s their plan to silently kill Indians.

The reduction of Berbice Bridge Tolls in 2015 are subsidized by the Gov't.

https://guyanachronicle.com/20...-accept-govt-subsidy

Dave posted:

Baseman posted:

The bridge economic model is a total disaster.  The WB said it was not viable due to volumes.  Applying a public private partnership model compounds that problem.  The high tolls ensured this outcome.  I don’t know why Jagdeo expected it would turn out differently.  

Jagdeo rant now is disingenuous.  If the volume of traffic is below what was expected, the rates will need to go up.  Unless he can point where provisions were made to plug this shortfall, then he talking hot air!

His bad judgement is being exposed here.  This is another “Skeldon” disaster.

Less traffic could be the result of no economical activity in Berbice. The government closes the estate, excessive rainfall and poor drainage cause rice farmers to import rice to meet its obligations, Berbicians has no money to spend... thanks to the PNC government. It’s their plan to silently kill Indians.

Quite an objective analysis.

Why there was no International Financing for the Berbice Bridge ??

Dave posted:

Baseman posted:

The bridge economic model is a total disaster.  The WB said it was not viable due to volumes.  Applying a public private partnership model compounds that problem.  The high tolls ensured this outcome.  I don’t know why Jagdeo expected it would turn out differently.  

Jagdeo rant now is disingenuous.  If the volume of traffic is below what was expected, the rates will need to go up.  Unless he can point where provisions were made to plug this shortfall, then he talking hot air!

His bad judgement is being exposed here.  This is another “Skeldon” disaster.

Less traffic could be the result of no economical activity in Berbice. The government closes the estate, excessive rainfall and poor drainage cause rice farmers to import rice to meet its obligations, Berbicians has no money to spend... thanks to the PNC government. It’s their plan to silently kill Indians.

Tolls were high from the inception. I remember this controversy from day 1.  

Anyway, so now, given what you said, and I take at face value.  What provisions are in place to plug this gap?  I can only see a govt injection as a solution. This should be in the agreement and the GoG will have a legal obligation.

Dave posted:

Baseman posted:

The bridge economic model is a total disaster.  The WB said it was not viable due to volumes.  Applying a public private partnership model compounds that problem.  The high tolls ensured this outcome.  I don’t know why Jagdeo expected it would turn out differently.  

Jagdeo rant now is disingenuous.  If the volume of traffic is below what was expected, the rates will need to go up.  Unless he can point where provisions were made to plug this shortfall, then he talking hot air!

His bad judgement is being exposed here.  This is another “Skeldon” disaster.

Less traffic could be the result of no economical activity in Berbice. The government closes the estate, excessive rainfall and poor drainage cause rice farmers to import rice to meet its obligations, Berbicians has no money to spend... thanks to the PNC government. It’s their plan to silently kill Indians.

How about this as a big factor!  The PNC is trying to force the BCCI into bankruptcy and will take it over (Nationalize).

"The BBCI had first rejected the government’s offer of financial support on the premise that its shareholders had not been consulted on the matter. The government, in an effort to relieve the travelling public from paying high tolls, implemented river taxis. This mode of transportation was far cheaper and very successful, resulting in thousands of people, including school children, utilising the boats."

the most brazen anti-worker predatory scam in Guyana's history!

conceived and executed by the Yeltsinite tiefman PPP braintrust . . . Patrice Lumumba U graduate 'Dr' Bharrat Jagdeo presiding

smfh

where is Gilbakka?