The move is “looking better and better everyday,” said Minister of Public Works and Utilities Bradley Roberts Sunday.
A guest on Island 102.9 FM’s Parliament Street, Minister Roberts with responsibility for the national airline said Bahamasair has been a “mill stone around the necks of Bahamians” for many years, incurring huge losses that had to be funded by the Public Treasury. He commended the support of the airline’s new board of directors, for the strides and improvements made over the past 18 months.
“Bahamasair continues to face its many challenges and I can say to you this afternoon that revenues are up and expenses are decreasing,” he said. He said that after examining several interim un-audited reports of the airline, it was safe to say that Bahamasair is heading in the “right direction.” He added that notwithstanding these predicted improvements, the government must deliver a privatised Bahamasair before July 1, 2005.
Minister Roberts said the PLP’s position regarding the privatisation of Bahamasair is unlike that of the former administration. He expressed that the PLP believes in and supports privatisation, but they do not support the “giving away of its assets.”
“No, we will not support that (giving away Bahamian assets), as some people, including the former American ambassador (J. Richard Blankenship) when he last appeared on your show. [He] had the temerity to suggest that we should have accepted one of those offers of which the tender’s board concluded that it would have been a giveaway of a significant asset that is owned by the people of The Bahamas. We are not exactly living in the dark, there are many models that exist, and we looked at those and concluded that the prices that were offered were not what we should have accepted,” said Minister Roberts.
The Works and Utilities Minister also noted that Bahamasair incurred huge losses every year for a sustained period of time, unlike The Bahamas Telecommunications Company, which has been making some $50 million over the past 3-4 years. He said Bahamasair is seeking to attract a partner that would purchase 60 per cent of its equity. He continued that the government plans to put all assets of Bahamasair into company “Y”, pick up whatever liabilities exist, and would sell 60 per cent of its assets, providing that the prospective buyer is able to meet the criteria established by the government. The government, he said, would also go through a process of inviting whoever is interested, to come forth and privatise the airline.
According to Minister Roberts, a number of people have come forth and expressed an interest in privatising the airline. During an exclusive interview with The Guardian last Dec. 7, Minister Roberts said the Board of Directors at Bahamasair was presently conducting discussions with three foreign entities that had shown an interest in privatising the airline. At the time, he noted that talks were progressing “satisfactorily”. Minister Roberts also mentioned at the time that the privatisation exercise is expected to be much cheaper than the large amounts spent to initiate the privatisation exercise of The Bahamas Telecommunications Company.
“I think the IDB (Inter-American Development Bank) has offered us some technical grant of between $300,000 – $500,000, but it should not exceed this amount,” said Minister Roberts at the time.
Former prime minister, Hubert Ingraham, said in the House of Assembly last Dec. 4 that despite the government’s plans to privatise Bahamasair, the airline would continue to owe millions.
“Whatever you do Mr. Speaker, we will still owe the Syndicated Loan Group $20 million; Citibank, $16 million; Royal Bank of Canada, $7.8 million; The National Insurance Board, $6 million; Citibank, another $6 million; Bank of The Bahamas, $942,000, trade creditors, $34 million, $8 million in taxes and $4.4 million due in national insurance payments, including $60 million in interests,” Mr. Ingraham said.
“Whether or not we privatise, we will still owe those things, so the government of The Bahamas is going to be on the hook for debts incurred by Bahamasair for many years to come.”
The former Prime Minister also stated in the House of Assembly last year that Bahamasair was costing Bahamian taxpayers some $20 million per year, and the public treasury will pump at least $20 million into Bahamasair last fiscal year, if not more. He also said that between 1987 and the end of 1991, $40 million in public funds was pumped into the airline, while only some $29 million was spent on capital projects for education. He also added that during the PLP’s first year in government, the subsidy for Bahamasair during the last fiscal period increased by nearly $4 million to $23.1 million.
Minister Roberts said Sunday the government will continue to pursue the privatisation of BaTelCo, but it wants a “realistic” price from the company interested in privatising the company. He said the privatisation process last year was delayed because the prices were too low. He noted that the best 49 per cent offer given to the government was some $250 million, but the government had a larger figure in mind.
Tamara McKenzie, The Nassau Guadian
