The recent attacks by A Partnership for National Unity (APNU) and the Alliance For Change (AFC) on several developmental projects have been viewed a ploy by the opposition to damage the local investment climate.
Several opposition Members of Parliament (MPs) have strongly criticised the Marriott Project, the Amaila Falls Hydro Electric Project, the Specialty Hospital, the Cheddi Jagan Internationa Airport Expansion, and of late, the toll structure of the Berbice River Bridge.
The opposition is seeking through a parliamentary motion to reduce the tolls to cross the bridge. On the latter, a prominent Berbice executive said the security for all of the investors in the Berbice River Bridge is the Berbice River Bridge Act and the concession agreement issued pursuant to this act.
“One of the most important parts of the concession agreement is the BBCI (Berbice Bridge Corporation Inc) right to collect tolls and to have the tolls adjusted to cover its expenditure. The order made by the minister of public works with respect to the tolls for the Berbice Bridge is based on the Berbice River Bridge Act.
Toll orders
“Two toll orders were made by the minister – Order Number 42 of 2008 published in the Official Gazette on December 22, 2008, the month the bridge started operations and Order Number 23 of 2009 published in the Official Gazette on November 26, 2009,” the official said.
Joseph Harmon
Since the bridge started operations in December 2008, the tolls have not gone up. Without investors having the confidence in the rule of law and the state honouring the toll orders referred to above, any serious investor will be turned away.
The investors include the top five commercial banks in Guyana; insurance companies; pension funds; the National Insurance Scheme (NIS); the New Building Society (NBS); and major corporate investors.
Excluding the NIS (which some consider quasi-government); all of the investors in the Berbice Bridge are private.
Breakeven
With the existing tolls, the BBCI is only at a breakeven position, the official said, noting that to date, the common shareholders have not received a single cent of dividend.
To date, only the interest returns on the debt (bonds and subordinate loan stock) and the dividend on the preferred shares to NIS have been paid. The Berbice Bridge has not started paying back principal on any of its debt.
“If the opposition’s motion were to be implemented, it would amount to a form of nationalisation or expropriation and would send shockwaves through the investment community. It would amount to a fundamental breach of the concession agreement issued to BBCI and violate the Investment Act.
“Every investor would then be forced to write down their asset as the likelihood of payment of interest, much less principal, would be impaired.
Leader Khemraj Ramjattan
“To make matters worse, this opposition’s political attack on the tolls of the Berbice Bridge will jeopardise the ability to have the proposed new Demerara Bridge funded as a private sector project.
“In order for the new Demerara Bridge to be financed by the private sector, investors will have to be confident that they can collect the tolls from users crossing the bridge.
“The right to collect tolls is a right derived from legislation (similar to the Berbice Bridge),” he said.
