WHERE WILL THE GOVT PUT THE RIVER?
September 1, 2015 | By KNews | Filed Under Features / Columnists, Peeping Tom, Source
There is the small quarrel between the Berbice River Bridge Company and the govt. Apparently the govt felt that it had an agreement for the reduction in tolls.
That agreement is now in jeopardy. The date for the reduction in the tolls was supposed to be today. But that deadline is not going to be met because there seems to have been differences between the govt and the Bridge Company as to what was achieved.
The Bridge Company wants to speak with their shareholders before agreeing to anything. They also want certain things that had requested in the past, which incidentally includes an increase in tariffs, to be put in place.
The request to speak with the shareholders is understandable. The directors do not wish to make a decision that could imperil the fortunes of the company without gaining the approval of the shareholders to whom they are ultimately accountable. Other than that they may simply be stalling for time.
The govt finds itself in this problem because it opted for a small decrease in tolls which it has to subsidize. This reduction is not costing the Bridge Company a cent because the govt will pay a subsidy in return which should cover the aggregate reductions in tolls. The Bridge Company therefore has nothing to lose but it is using the deadline for implementing the reduction to press for concessions from the govt.
The govt has to decide whether it will play along. There is a danger in doing so. The govt will come across as being weak. No govt should be seen as weak. People will take advantage of the weak.
The govt has found itself with its back against the wall because it has failed to address the issue of control over the Bridge. The State, through a number of agencies, has invested the majority of funds in the Bridge. But because of the financing arrangement, the govt has a minority presence on the Board. This anomaly is what the govt should have confronted. It should have devised a strategy to assume majority control.
The only way this can happen is if the govt converts its loans and bonds in the Bridge to equity shares. The govt has to do this. Alternatively, seeing that the Bridge is not earning money, it should buy-out the private shareholders and then it should assume majority control of the Bridge.
Nationalization is not an option. This will send chills down the spine of the business community. It will frighten investors. It will also require the govt, under the law, having to pay compensation to those affected. It will be much cheaper and more convenient for the govt to buy out the private investors. Seeing that they are not gaining any returns on their investment, there should be no problem in them wanting to sell once the price is right. Once the govt assumes control of the Bridge it can then remove all tolls for vehicular traffic or charge the same tolls that are charged on the Demerara Harbour Bridge.
The govt believes that its options are not closed. It does not state just what these options are. But it was suggested that while the Bridge Company owns the Bridge, it does not own the river.
So perhaps we can now expect that if the Bridge Company does not reach an agreement with the govt, the govt will withdraw the river and financially cripple the Bridge company which supposedly receives a great deal of its revenues from the movement of ships and boats.
But if the govt picks up the river where is it going to put it? After all, this river is still needed to cross from one bank to the other bank.
