The minister responsible for both entities, Bradley Roberts said Sunday, in an exclusive interview with The Guardian and Island 102.9 FM from the Ministry of Works boardroom, that
the Tenders Commission has made its final decision on the bid process for a strategic partner for the Bahamas Telecommunications Company and their finding is expected to be presented to Cabinet on Thursday.
Noting that attempts to privatize the state-owned agency had been a very “expensive fiasco” for the Bahamian people, Mr Roberts said that a final determination could well be made this week.
The Government has learned “from past mistakes” related to BaTelco, he said, and to ensure that similar blunders will not be made in the case of Bahamasair, will hire the most qualified advisors affordable.
One scenario was to create spin-off “domestic” and “international” carriers from Bahamasair, the minister said. said.
Fruitful discussions
Mr Roberts said that Bahamasair’s board of directors was engaged in discussions with a view to privatizing the cash-strapped airline.
“My advice is that talks are progressing very satisfactorily, and it appears at this stage to be positive and as soon as definitive information comes to hand, I will bring the general public up to date,” he said.
The transfer of the state-owned business to private enterprise – expected to take about 12 to 18 months – will cost far less than in the case of The Bahamas Telecommunications Company, he said.
“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, if this is the amount,” he noted.
Making the initial announcement in the House of Assembly last week, Mr Roberts said that privatization of the airline was a “necessity” to eliminate the financial “haemorrhage” occasioned over many years.
Staff retirement, transfers
When asked what would happen to the large number of employees at Bahamasair, once it was privatized, Mr Roberts said the company was engaged in an exercise to reduce staff levels by initially offering attractive packages to persons 55 years and older.
Discussions with the Ministry of Transport and Nassau Flight Services (NFL), another Government-owned private company, would also need to be resumed, he said, to have the ground handling company take over the tasks presently assumed in-house by Bahamasair, and paid a fee.
“I think its a win-win situation and will strengthen Nassau Flight Services,” he said, adding that Bahamasair would then be able to get out of a business that they should not have been engaged in in the first place.
“Ground handling is a specialized area, and Nassau Flight Services has the equipment, expertise and knowledge,” he said.
Mr Roberts further said that 40 Bahamasair employees would also be transferred to the public service where vacancies existed. The airline presently employs some 600 employees.
Acknowledging that Bahamasair was bankrupt, Mr Roberts said that privatization would eliminate the $20 million to $25 million spent on the airline each year.
Debt burden
While Bahamasair lost some $100 million over 19 years under the Progressive Liberal Party administration, Mr Roberts said, during nine-and-a-half years under the Free National Movement, it lost $178 million.
Such losses were not in the best interest of the Bahamian public, he said.
Noting that Bahamasair’s privatization would require elimination of a significant level of indebtedness, Mr Roberts made it known that, “Once the government disposes of the majority shares, then it is up to the majority shareholders to either cause the airline to swim or sink. And just like any other company, there is no guarantee. The airline business is a very volatile one.”
Split approach
If privatized, the Government is likely to maintain minority ownership of the airline, Mr Roberts said, with the possibility of creating separate “domestic” and “international” divisions.
He added, “Let me also say that it is clear to my thinking that if tourism is our number one industry in The Bahamas, the Bahamian people ought to be concerned about maintaining its own air service or some air service that is dedicated to the promotion of the movement of tourists in and out of The Bahamas.”
It would be “unwise” to leave Bahamasair to the “whims” of the private sector, he surmised.
“We know from history what happens when this occurs,” he went on. “And it is likely to be some bouncing road in the future as it was in the past and we ought to take the necessary precaution that we protect ourselves as best as we can.”
Millions owed
In the House of Assembly last week Thursday, former Prime Minister, Hubert Ingraham said that even when it is privatized, Bahamasair will 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,” he detailed.
On Sunday, Mr Roberts said that Mr Ingraham was “talking from both sides of his mouth at the same time,” during his three-hour long contribution.
“On the one hand, he said that the government should not have asked Bahamasair unions for concessions, and that we should pay the salaries increases due under the industrial agreement,” he criticized, “yet Mr. Ingraham’s colleagues voted against the loan resolution to purchase two additional Dash-8 aircraft, which every single staff member of Bahamas- air would agree was badly needed to improve the airline’s reliability and its financial position.”
The former PM is a “confused man who appears to be jonesing for power once again,” Mr Roberts said, adding,
“Quite frankly, I expected better from a man who publicly acknowledges that his government was a failure with Bahamasair.”
By Tamara McKenzie, The Nassau Guardian
