BBCI Toll Reductions

– GuySuCo, GAWU pension plans to lose $9.9M and $2.9M annually

The A Partnership for National Unity/Alliance For Change (APNU/AFC) Government in trying to fulfil its campaign promise to reduce the Berbice River Bridge tolls within 100 days of being in office has failed to do so.

However, in attempting to reduce the tolls, the Administration may now jeopardise the pension plans of thousands of pensioners across Guyana.

Dr Henry Jeffrey

Political commentator and former Government Minister, Dr Henry Jeffrey on Friday evening told Guyana Times that while the move to ensure that the tolls were reduced was “a good thing”, it has been executed in a manner that was “improper”.

He stated that should the bondholders be forced to accept the conditions of lowering the tolls then the pension schemes for the National Insurance Scheme (NIS); Guyana Sugar Corporation (GuySuCo) and the Guyana Agricultural and General Workers Union (GAWU) would be drastically affected.

According to Dr Jeffrey, had the APNU/AFC coalition “done the wise thing” by holding consultations with shareholders/bondholders of the BBCI after taking office, both sides would have emerged with an amicable agreement.

“I think the Government went precipitously and made all these arrangements for change without properly sitting down and talking to these people. They made these decisions that they are going to lower and lower and all that without first of all discussing this matter. I think what they are trying to do might be good, but they needed to have discussions and agreements before making announcements,” he said.

According to former Minister, no Government of the day should use its power to, or assume that because it is in power it can, make decisions on such matters and then expect other parties who are involved to “just agree” with what the Administration has decided upon.

“I think it really was not properly discussed before the decision was taken and all of that … I have no problem or quarrel, just that the process in which the Government has done things, I mean not because you are Government means people have to follow every decision you make without discussions …The government had a long time to review the proposal put forward by the BBCI before it made this announcement,” Dr Jeffrey added.

Should these bondholders agree to the request being made, they would be losing significantly on their multimillion-dollar investments in the Bridge Company.

On the other hand, should they refuse, the toll reductions will take much longer to be implemented.

Although GuySuCo was declared “insolvent” and allegedly not in a position to pay workers their earned Annual Production Incentive (API), its pension fund for sugar workers – $281 million will also be receiving lower returns, as well as GAWU’s $81 million pension plan.

Guyana Times understands that as per the original agreement, bondholders would receive 11 per cent interest on the sums each invested regardless of the amount, but the new proposal by the APNU/AFC Government would see that the interest rate be reduced to about 7.5 per cent.

This would mean that GuySuCo which had invested the $281 million would have benefited from $30.9 million annually, but with the much lower interest rate it would be receiving an average of $21 million each year instead.

Meanwhile, GAWU’s investment of $81 million that would have been bringing in $8.9 million per annum in interest would now be getting an average of $6 million every year should it be pressured to accept the new interest rate to facilitate a reduction in the bridge tolls.

Guyana Times understands that the bondholders were invited to a special meeting scheduled for December 14 to discuss matters concerning Government’s intention to reduce the Berbice River Bridge tolls.

The bondholders are the New Building Society Limited (NBS); the NIS; Republic Bank Limited; the Guyana Bank for Trade and Industry (GBTI); Scotiabank; Citizens Bank; the NEW GPC INC; Trust Company Guyana Limited; Hand-in-Hand Trust; Guyana Sugar Corporation Pension; Guyana Power and Light Pension; GAWU Pension; Guyana Geology and Mines Pension; Demerara Bank Limited; Demerara Distillers Limited Pension; Massy Pension and Geddes Granger Pension.