ALBERT BRANDFORD: To privatise – or not?
As long as I am chairman of the Cabinet, under no condition will we be embarking on any programme of privatisation, whether it be the Transport Board, or the Sanitation Service Authority, or the Caribbean Broadcasting Corporation, or the National Conservation Commission. We are just not interested in that! – Prime Minister Freundel Stuart, February 12, 2013, Tweedside Road.
PRIVATISATION WAS BY all accounts the hottest, most intense element of the topsy-turvy 2013 general election with pollsters and pundits divided over predictions of a change in Government after just one term for the Democratic Labour Party based essentially on which party would sell the family silver.
The charge, counter-charge from both major political parties about which would undertake a privatisation programme dominated the election campaign and filled the night air from the platforms.
With a series of well-crafted media ads and commercials, perhaps the most memorable of which was a TV skit of a female senior citizen not being able to travel on a Transport Board bus using her ID card as the service had been privatised. The Dems won debate handsomely but the election narrowly.
It took the nation by surprise, therefore, when the DLP Government, which had followed the BLP in systematically starving the Sanitation Service Authority (SSA) of cash and other resources, recently announced a six-month $3.3 million plan to use private haulers to augment the SSA’s efforts.
Such outsourcing, a euphemism in developed countries for privatisation, has been described as an approach that seems like a perfect solution for deficit-plagued governments, but the morning after can bring some unpleasant surprises.
According to the literature: “In theory, the idea of contracting out public services to private companies to cut costs makes sense. If someone is willing to fix streets or put out fires for less money, that should be a plus for a government‘s bottom line.
“Many state and local governments have identified hundreds of millions of dollars in savings by hiring outside contractors – or a neighbouring city’s services – to handle tasks like trash collection, pothole repair, and water and wastewater treatment.
”But according to analysts, outsourcing is by no means a perfect solution. Some agencies don’t have the metrics in place to prove in advance that outsourcing a service will save money.
“Problems from poorly conceived contracts can create cost increases that surpass the costs of in-house services, and if there’s shoddy contract oversight, a government is vulnerable to corruption and profiteering. The privatisation of public services can erode accountability and transparency, and drive governments deeper into debt.”
Susan Deurksen, director of communications for In the Public Interest, a project in the United States that examines privatisation and contracting, is quoted as saying: “Governments at all levels are just desperate to balance their budgets, and they’re grasping at privatisation as a panacea. But there’s evidence that it often is a very bad deal with hidden costs and consequences when you turn over public service to a for-profit company.”
This first tepid, baby-step by the Freundel Stuart Administration into the privatisation waters and walking back from the election promise lacks an essential element of any privatisation programme, that of transparency as there is no public disclosure, for instance, of how the private haulers were chosen and how their fees were determined.
One is almost tempted to joint with the cynics and others who are persuaded that this plan is but an attempt to keep the island clean for the 50th birthday bash in November.
But this not clearly spelt out halfway privatisation measure is fraught with the possibility of unintended consequences, not the least of which is the concern identified by noted economist Professor Michael Howard that it could place an additional financial burden on the Barbadian public.
“I support the contracting out of a component of national garbage collection to the private sector as long as it does not lead to separate commercial prices paid to private waste haulers by the consuming public,” Howard said.
“This form of privatisation is preferred to complete privatisation of the Sanitation Service Authority which would imply either separate commercial services paid by the consuming public or a larger subsidy paid to waste haulers by Government to cover the entire economic cost of garbage collection in the island.”
Partial or full, this seems a complete reversal of Stuart’s original stance: “I can say with pontifical certainty [that] there is no plan by the Democratic Labour Party to privatise the statutory corporations of this country. None at all.”
My grandfather used to say that politicians, like women, are entitled to change their minds.
Albert Brandford is an independent political correspondent. Email: [email protected]