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THE HOYOS FILE: Flying in the face of common sense


Pat Hoyos, [email protected]

THE HOYOS FILE: Flying in the face of common sense

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NEARLY FIVE YEARS since our last general election – which, you could argue, pivoted on the same very topic – privatisation is once more the talk of the island.

Columnists of all kinds who never had to tell their American-programmed spellchecker that the “s” did not need replacing by a “z” suddenly found themselves doing this time and again.

Yes, folks, apart from the question of whether your right to a second made-up eyebrow is higher on the totem pole of inalienable rights than the state’s right to make you do a fire drill, privatisation may be the most discussed issue now in all media.

But five years on from that election campaign ad by the Dems showing Barbados’ statutory corporations, aka, our “Crown jewels”, being sucked down the swirling toilet bowl of nefarious Barbados Labour Party privatisation, two of the three parties in the social partnership are maintaining their stereotypical position.

The third is doing that which it railed against, but on the quiet – until everybody finds out.

The local chamber of commerce has said it would be happy to discuss taking over anything the Government wants to sell once the price is right, while the major trade unions have said they are either outright against privatisation or will fight against any efforts by the Government to reduce the number of people it employs.

Meanwhile, the Government ofDr Dolittle is in a curious position as it is suddenly announcing sweetheart private sector deals when it finds itself under more financial pressure than it can bear (for example, that ridiculously expensive sanitation deal with private haulers), or wants to tie up Barbados’ future by awarding monopoly contracts without public discussion on the merits or demerits of the approach (for example, the now defunct Cahill Energy deal, and the still looming Andrews Factory deal). 

It is also, as noted in this space, trying to wriggle around its policy of selling the national oil terminal to the dominant player in the market when it is clear that the up-and-coming secondary player may well decide to sell off its own Barbados operations as a direct result.

Last week, we had Minister of Commerce Donville Inniss acknowledging that he might be breaking ranks with his colleagues by openly embracing privatisation.

For a second, I heard the orchestra in my mind swelling to a heart-warming crescendo led by the French horns, but then I thought: Is this really another case of Saul becoming Paul? Well, he hasn’t fallen off his high horse yet.

Do I have this wrong, or wasn’t Inniss the minister who told the Fair Trading Commission to essentially cease and desist when it said it wanted to investigate the whole national terminal deal-making thing?

So how can he be for robust privatisation without replacing the state’s direct financial interest – which it supposedly holds on behalf of the public in sensitive sectors like energy – with strong regulatory arms to monitor the deals and set up the proverbial level playing fields for them?

I think the simple truth is that the Government, perhaps most governments, love to own assets, and hate to part with them.

Take, for example, the LIAT financial situation. I was not at the Press conference, so I can’t tell you my gut reaction to the presentation by Dr Ralph Gonsalves, but here is my summary of a BGIS report on it (I have written it as a news story, so the tone is different from the rest of this commentary):

“LIAT says it expects to report a loss of about EC$9.2 million, or US$3.4 million in 2016, according to Prime Minister of St Vincent and the Grenadines Dr Ralph Gonsalves, who is the chairman of LIAT’s majority shareholder governments’ group.

Making the disclosure to the Press on October 19  after the group’s quarterly meeting, Gonsalves said, however, that this was an improvement on previous losses of close to EC$100 million to EC$57 million last year.

Half of that EC$57 million was related to losses incurred in selling the airline’s Dash Eight aircraft and severance payments.

 “Gonsalves said LIAT had made many cost-saving changes in recent times and a review was underway to determine the optimal number of employees needed to serve the network.  

“However, he said, the directors also had to look at the limitations and challenges the carrier faced, including too many flight cancellations caused by illness of flight staff and crew.

“In addition, the airline now had fewer aircraft serving essentially the same markets, and ‘weak technology infrastructure systems’.”

So, did you get that patronising attitude? Hey, we’ve been losing money for years and years, but we are gradually turning the ship – sorry, the plane – around.

How many large shareholders of private or public companies do you know that allow minority interests to run them year after year at the cost of millions and millions of dollars in losses, without intervening openly and publicly to stop the red ink from flowing?

Well, I can only think of one – Barbados. We own the biggest share of LIAT and it costs us millions every year in losses, but we won’t take it over or sell it. Or even make sure it moves its headquarters to the Grantley Adams International Airport.

If we ever want a “poster child” for why we need privatisation, may I recommend a photo of one of LIAT’s brand new planes?

In the meantime, may I also suggest a new logo for the airline. It could be something like “LIAT: Flying in the face of common sense”.

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