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Change and the public sector

Published: Sep 14, 2013

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Prime Minister Perry Christie proposed recently sweeping changes to the energy sector of The Bahamas. This includes, essentially, breaking up the Bahamas Electricity Corporation (BEC).

BEC is a failed state entity with hundreds of millions of dollars of debt and an overpaid staff. It also is unable to carry out its primary mandate of providing consistent electricity to consumers. The disaster that is BEC is not just because of its management. Successive governments have allowed politicians and wannabe politicians, who know nothing about power generation, to directly run BEC for years.

BEC has become a hindrance to economic growth. Many businesses and residential consumers simply cannot afford to pay for the power BEC sells. Change had to come. While the final liberalized model has not yet been selected, it is good that the prime minister has recognized that comprehensive reform of the energy sector is critical to our national development.

Christie should not stop there, however. There are several other dysfunctional loss-making state entities that need to be reformed. Bahamasair and the Broadcasting Corporation of The Bahamas come to mind.

Let’s start with Bahamasair. The government has pumped a half a billion dollars into this airline since it was created in 1973. It has not made a profit and never will as long as the government owns it. While it was necessary decades ago to have “public transportation in the air” to ensure Bahamians could navigate this archipelago, things have changed. Local airlines have emerged, and they continue to expand their services. Rather than spending $20 million a year or more on Bahamasair, why not offer much smaller subsides to private airlines for unprofitable routes and let them move people around? Bahamasair could be given to a private group – if anyone wants it – and that burden taken off the backs of Bahamians.

The broadcasting corporation, better known as ZNS, too is a place where waste is the norm. The quality of its news has significantly deteriorated in recent years and the scope of its original programming is quite limited. Should we spend $8 million, or $10 million or $12 million a year forever for what we are getting from ZNS?

There is nothing wrong with retaining a public broadcaster but there should be value for money. You could never watch ZNS and be quite informed by consuming other media in The Bahamas.

Just as Hubert Ingraham pushed liberalization of the telecommunications sector with the Bahamas Telecommunications Company (BTC) sale and Christie now is moving to energy with the proposed changes at BEC, the spirit of reform must touch some of these other wasteful state enterprises.

Money is tight. Economic growth is weak. Sensible reforms can lead to job creation, savings and a lessened tax burden. Christie should not stop at BEC. He should also not be deterred by unions who want to cling to a past where inefficient and ineffective workforces kept getting more and more while the quality of service delivered to the people kept deteriorating.


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