PURELY POLITICAL: Wrong BNOC move!
IT DIDN’T COME AS much of a surprise that in the just concluded Estimates debate in the House of Assembly, Members of Parliament managed only to cover a few of the heads of expenditure.
Prime Minister Freundel Stuart earlier in the week said, in his usual understated manner, that he had suggested a focus on education, health and social care which would be carrying most of Government’s budget.
With the exponential increase in state activities, particularly within the last three decades, and hence the rise in appropriations, the limited number of “heads”, that is, ministries and departments that Government wanted to cover, was unusual.
My experience, though, has been that the number of heads dealt with in the past have not been that much higher, probably averaging about four during the 30-plus years I have been covering Parliament.
It appears that successive Governments decided, strategically (I put it no higher than that), to select those heads – without consulting the Opposition – that would cause the least exposure to criticism, but, and more important, would afford an opportunity to crow about their achievements and to make grandiose promises about major projects that are in the pipeline.
What was unusual came at the start of the debate on the annual Appropriation Bill beginning with the three-hour plus presentation by Minister of Finance Chris Sinckler that more closely resembled a Budget speech.
It was complete with slew of revenue-raising measures, including new and increased taxes such as the unfortunate, backward, and in these current economic circumstances, unconscionable grab at assets of the credit union – the poor man’s bank – to raise $123 million.
But what was even more startling was the grandstanding five-hour plus response by Leader of the Opposition Mia Mottley on the first day of the five-day event which had the cumulative effect of drastically reducing the time MPs would have to explore critical areas of Government’s operations.
This was compounded by a two-hour plus invective-laden speech by Sinckler reminiscent of a predecessor’s infamous late night Budget wrap-ups.
It would therefore not shock you to learn that by Friday morning when this was written that the House had only touched on the Ministry of Health, which though it traditionally garners the second highest budgetary allocation after the Ministry of Education – with the obvious exception of the Queen Elizabeth Hospital – is a relatively non-controversial head.
As I write, the only “controversy” that has so far emerged from the exercise – apart from the almost secretive arrangements surrounding the announcement of the Cahill Energy waste-to-energy project – was whether the minister said he was selling the Barbados National Oil Co. (BNOC) or only its terminal operations.
I use the term “only” advisedly because subsequent investigations revealed that this fully-owned subsidiary is the major money earner for the parent company, and rumours surrounding the identity of the likely successful bidder immediately raised genuine concerns about the potential creation of another virtual monopoly in the crucial energy sector.
There are, of course, known linkages with the Barbados National Terminal Company Limited (BNTCL), whose imports of heavy fuel oil account for 80 per cent of that used for power by the Barbados Light and Power Company.
It was incorporated in February 1998, has fixed assets of $138 million (its parent company, BNOC’s are $417 million). It provides storage for local crude oil to facilitate shipping to Trinidad. It also imports, stores and distributes aviation fuel, jetA1 on behalf of major oil companies, SOL, Esso and Chevron.
My investigations revealed Government’s real intent is to sell the downstream operations of BNOC, not only BNTCL, but also the vital marketing division.
It is this marketing arm that is effectively into the buying and selling of the petroleum products. It is noticeable there is no similar investor interest in BNOC’s upstream operations, which involve drilling and production.
Some experts question the low $70 million sale price for a company that has earned multi millions of dollars.
BNTCL’s principal activities up to December 31, 2005 were the importation, storage and supply of petroleum products such as fuel oil, diesel, leaded and unleaded gasoline, and the storage and shipping of crude oil on behalf of its parent company, BNOC.
With effect from January 2006, however, its focus was changed and it was concerned mainly with the storage of petroleum products on behalf of various importers.
It is clear that the marketing arm is now responsible for additional activities post-January 2006 and is now the most profitable component in the downstream operations.
So minister, while the newspaper might have got it wrong about what is being sold, you have got it wrong with selling this cash cow.
Albert Brandford is an independent political correspondent. Email [email protected]