…says company should show revenue management

OPPOSITION Leader Bharrat Jagdeo does not support the Berbice Bridge Company Inc.’s (BBCIs) proposal of 19-year concession extension and wants the company to instead provide evidence that it has not mismanaged its revenues.

The opposition leader’s statement comes just days after the BBCI board had requested that Minister of Public Infrastructure David Patterson, provide legal evidence to support the government’s decision to temporarily supervise the bridge operations.

On Wednesday at his weekly press conference, Jagdeo stated that the BBCI’s proposal is unjustified and the focus of the government should be placed on the company’s failure to meet its obligations over the years. It is widely believed that Jagdeo, under whose tenure the bridge was constructed, has deep connections to the players at the BBCI.

“The bridge company made a proposal not to increase any toll, but to extend the life of the agreement that we signed for another 19 years, so that there would be no toll increase. My position on that is that it is not justified by any economics to extend the life of the bridge agreement by another 19 years to keep it in the hands of the company,” the opposition leader said.

He further added: “We made it clear that the revenue is performing better in the Concession Agreement than was predicted. So, clearly, the company has to justify, in great detail, why it has not met all of its obligations to the shareholders and investors.”

He read from a document which outlined the BBCI’s returns in the last 12 years since the Berbice River Bridge Act was enacted in 2006, to prove that the company was receiving significant revenues. “The bridge needs to justify how in the face of increased revenue, beyond the model, they cannot meet their obligations; it’s a management issue. They have to demonstrate what happened there,” he said, adding:
“The revenue stream in the model performed better than what it was predicted to. So if the revenues stream performed better, why is it that you need to have an extension of even any toll increase because the original model said two minor toll increases: six per cent and seven per cent. Why now 300 per cent? That is what they [the government] should ask…did your cost go beyond [what was] predicted? If so, who is to be blamed?”

Jagdeo recommended that a financial analyst be used to examine the unknowns.
The BBCI has reported over G$6B in debts.

Patterson had announced in the National Assembly last Thursday that upon government’s request, the BBCI had presented a portion of its audited accounts, while the government was still awaiting the remaining information for transmission to the Ministry of Finance.