The Berbice Bridge: Life, liberty and property

When John Locke laid down the foundations of what is now the “liberal state”, he proposed that the right to “life, liberty and property” is sacrosanct against the depredations of the Leviathan when in control of men of narrow vision. Thomas Jefferson substituted “the pursuit of happiness” for “property” in the U.S. Declaration of Independence, not because he disagreed with Locke, but because he considered the two terms coterminous. How could one “pursue happiness” when mired in poverty?

From the 18th century to the present, if there has been one constant in the evolution of governance, it is this: when a government refuses to recognise the “right to property” as sacrosanct, that country will remain in the Hobbesian “state of nature where life is nasty, brutish and short”. The USSR and China both defined their governance structure as “communist” inspired, but the former is now a distant memory and the latter will become the largest economy on earth, because the latter gave due importance to the right to property.

The right to property is protected in the law of contracts – and for this reason, contracts have also become sacrosanct. One cannot breach the terms of a contract, without due process being applied in the courts that are mandated to protect the rights of citizens and legal entities. In modern societies, the latter is epitomised by the “corporation” which is considered literally as a legal “body” with its own right and remedies. Because, usually there are a host of individuals and other entities that have interests in a particular corporation, a “Board of Directors” is constituted for every corporation to protect the former’s interest.

Boards are said to have “fiduciary responsibilities” to the shareholders and trustees of their corporations and failure to protect the latter’s interests can result in Directors being sued in their private capacities. The foregoing becomes relevant in light of the exchanges between the Directors of the Berbice Bridge Company Incorporated (BBCI) and the Government of Guyana (GoG) after the latter unilaterally announced a reduction of the tolls (property) of the Bridge the former entity operates.

Over a year ago, when the GoG was in Opposition but in control of the Assembly, they had passed a motion for such a reduction. But it appeared that good sense prevailed after they became the government when they quantified their reduction of tolls, announced it in their Budget, and engaged the Directors of the BBCI in negotiations. They then announced that they would subsidise the reduction of commuters’ lowered payments which kicked in on Sept 1st. After extensive deliberations, the BBCI Board was forced to point out that they had never formally agreed to the government’s proposals which had repercussions of the stakeholders’ right to property that only they could approve.

And it is these repercussions that hark back to the sanctity of contracts and of property. The Berbice Bridge was built under the first Public Private Partnership (PPP) agreement in Guyana. The Government of Guyana (“Public”) entered into a contract with equity and debt investors (“Private”) that promised a cash flow from tolls to cover operational costs and debt servicing. It is to be noted that shareholders only receive dividends when there are profits generated and in the case of the Berbice Bridge these were never paid.

As pointed out by the BBCI Directors, the cash flow from tolls at the present level would plunge the Bridge into bankruptcy unless they were raised to the levels requested since 2014 but not approved because of the intervening general elections exigencies. The government has unfortunately ignored the BBCI Directors duty to consult with their principals before their property (payments of debt) is destroyed (bankruptcy) and labelled it “delaying manoeuvres”.

The government would do well to accept the fundamental values of “life, liberty and property” and accept that a campaign promise does not constitute “force majeure” that allows them to unilaterally breach the terms of a contract.