Letter: Govt purchase of the Berbice Bridge Company explained

Dear Editor,

The debate is not whether the bridge would legally revert to the State at the end of the concession “for free.” The real issue is what it would cost taxpayers between now and then if a toll-free system were implemented.

Without the benefit of the most recent financial statements (2024 or 2025), let us examine the 2020 financial statements, which are publicly available, for the purposes of demonstration — to determine whether the Government made a sound financial decision.
What are the variables?

The first and most important variable is that the bridge toll was eliminated in 2025 as a matter of Government policy. Once tolls were removed, Government would necessarily have to provide subsidy equivalent to the revenue that was previously collected from those tolls.

Now, using the 2020 figures — which were not even reflective of peak revenue performance, given COVID and the preceding period of economic stress — let us assume for demonstration that tolls were eliminated in 2020 and that the concession agreement expires in 2027/2028, approximately seven years later.

Under that scenario, Government would have had to provide cumulative subvention of approximately $9.45 billion over that period.

Meanwhile, the total debt on the books as of 2020 was less than $5 billion. That comparison alone answers the question.

It therefore makes economic and financial sense to activate takeover of control of the bridge company — retire the debt obligations to bondholders and lenders, settle the preference shares, and negotiate a terminal payment with common shareholders, whose residual value is materially weakened by an accumulated deficit of approximately $1.65 billion on the books.

In this illustration, the notional saving relative to continued subsidy exposure is approximately $4.45 billion.

Importantly, Government is not purchasing “value” in the sense critics imply; Government is purchasing control of the concession structure and retiring the debt burden in order to eliminate future subsidy exposure.

That represents consolidation of control of strategic infrastructure, elimination of recurring fiscal exposure, and alignment with a policy that benefits at least 200,000 citizens who rely on the crossing.

As for the new bridge, that discussion should be grounded in net economic benefit analysis — both retrospectively over the last 20 years and prospectively within the context of Guyana’s structural transformation. The Deepwater Port, the Guyana-Brazil corridor, and the Lethem road network will significantly alter the volume and value of commerce passing through Guyana. Infrastructure decisions must be evaluated within that growth trajectory, not in isolation.

For context, the Berbice Bridge was originally constructed under a Public-Private Partnership model with a heavily leveraged capital structure — approximately 84% debt and 16% equity. That financial architecture has always carried structural vulnerability. Once tolls were removed, the economics of the concession fundamentally changed.

The debate, therefore, is not about whether the bridge would legally revert to the State at the end of the concession “for free”. The debate is what it would cost taxpayers between now and then under a toll-free regime.

The arithmetic is straightforward.

Yours respectfully,
Joel Bhagwandin