Vice President, Dr. Bharrat Jagdeo said the National Insurance Scheme (NIS) has to date received some $3.3 billion from the $2.59 billion investment it made in the Berbice River Bridge.
He, therefore, said the Opposition’s chants about the investment being the reason for the NIS becoming broke is a “fallacy.”
The Vice President made the statement Friday, during a media conference at his Shiv Chanderpaul Drive, Georgetown office.
He said the NIS returns include $2 billion in interest and payment for the preference shares, and $1.3 billion in principal repayment.
“It’s the highest yielding instrument that yields more than the treasury bill, had they used to invest this in treasury bills they would not have this return,” Vice President Jagdeo explained.
“Imagine they had received so far $3.3 billion from a $2.5 billion investment and they still have a lot of subordinate debt, the preference shares and the common shares in the bridge, and they still own that which will run them into billions of dollars more,” Dr. Jagdeo emphasised.
About $300 million was injected into bond one at a nine per cent rate. That amount was reimbursed, along with $276 million in interest. Some $1.3 billion in principal repayment was also received.
At a 10 percent rate, another $760 million was invested into bond two, which saw the National Insurance Scheme collecting $995 million in interest; way more than the principal investment.
Meanwhile, the subordinate debt was $500 million at an 11 percent rate, the preference shares stood at $950 million, while the common shares were $80 million.
“On the subordinate debt that is ongoing, $65 million has been redeemed so far and they received $517 million in interest, and on the preference shares $ 268 million. On common shares which is only $80 million, they have not received any return,” the VP added.
NIS’ journey to bankruptcy
The Vice President explained that the NIS had an operating surplus of $968 million and $161 million in 2015 and 2016 respectively. In 2017, the agency saw about $175 million in deficit, while the following year showed a whopping $1.6 billion in deficit.
Further, the NIS accounts document exhibited by Dr. Jagdeo showed that in 2019 and 2020, there were about $1 billion and $1.7 billion of indebtedness, respectively.
“So, this is what has happened, you see it has moved from an operating surplus into now a huge operating deficit that is what I mean. It is factual. Therefore, we need to cure this issue here, that’s what we have to fix for that purpose, to make sure that it can continue to pay benefits,” the Vice President asserted.
Whether through the consolidated funds or other mechanisms, Dr. Jagdeo stated that the government has to intervene to ensure present and past contributors receive their benefits, even up to 100 years from now.
NIS headquarters in Georgetown