Nation for sale pt. 1
PHILIP C. GALANIS
Published: Sep 16, 2013
We have to be very careful. Under the guise of globalization and the false impression of progress, the country’s greatest assets are being disposed of right from under our noses. The most unfortunate reality is that this has been and continues to be aided and abetted by our politicians in whose good judgment we have placed – or, perhaps, misplaced – our trust.
A prime example of this misguided divestment of a national gem was the bargain-basement sale of BaTelCo (BTC) by the Ingraham administration under such shadowy terms and conditions, which the Bahamian people will probably never fully understand, to a company that, at best, with all its financial resources, has not managed this national asset anywhere near as efficiently or as effectively from an operations standpoint as its previous Bahamian managers.
Several years ago, Rubis, the France-based international oil company, purchased the Chevron-owned oil companies throughout the Caribbean, including the Texaco brand in The Bahamas. In the past few weeks, some have hinted about the possible privatization of the Bahamas Electricity Corporation (BEC), or strategic components of that organization. In the past few months, we learned about the acquisition of the Caribbean-based oil companies owned by ExxonMobil and branded as Esso, including the Bahamian operations. This flurry of acquisitions has inspired us to invite our readers to Consider This… has The Bahamas and its most important assets become a nation for sale to the highest or best positioned foreign bidders?
Public sector treasures
One of the most deplorably, disastrous decisions taken by the Ingraham administration was the sale of our national telephone company, BTC, to Cable and Wireless. The result has been the unreliable delivery of dependable, cost-effective land-based and cellular telephone service to its subscribers or end-users. Much has been said about this privatization exercise and, in the fullness of time, hopefully we will more fully understand why the Ingraham administration reversed itself on selling off BTC to Cable & Wireless – a proposition that he had previously affirmed could not ever happen on his watch. Until then, we can only speculate on what really went down.
Hints are now in the air about the possible sale of BEC or parts of it. The government is relying on the advice of a foreign company, whose earlier incarnation in The Bahamas, by any yardstick, was less than stellar.
A word of advice to the current administration: proceed with the utmost caution, particularly if you are considering placing BEC, which is vitally important to our national security, into foreign control. Over the decades, Bahamians have done an admirable job in electrifying the entire Bahamas.
Private sector troves Shell Oil
Years ago, Shell Oil took a decision to dispose of its assets in The Bahamas. Franklyn Wilson and his investor group decided to acquire Shell’s assets and have, over the years since that acquisition, made a success of that transaction. That was a classic example of how a foreign-owned company could and should be acquired by Bahamian investment groups and how the acquired company could flourish in Bahamian hands.
Two years ago, Chevron decided to dispose of its Caribbean assets and entertained tenders from those interested in acquiring those assets. The bid was ultimately won by Rubis, the multinational French-based oil company which, over the past year, has sought to reposition and rebrand itself in the marketplace. That acquisition was also managed in a commendable way, although it would have been better for those assets to come under Bahamian ownership and control.
Barbadian business mogul Sir Kyffin Simpson is about to take on another gigantic acquisition. In 2004, after out-negotiating Trinidadian oil company National Petroleum and the French oil giant TOTAL to acquire Shell Antilles and Guianas Limited in more than 12 Caribbean countries for $400 million, Sir Kyffin is now on the verge of taking over another international brand in the region.
Sir Kyffin, the founder of Simpson Motors, Interamericana Trading Corporation and Simpson Oil Limited (SOL), has secured an agreement to buy ExxonMobil and its affiliates in Barbados and six other regional territories, including The Bahamas. ExxonMobil is the parent company of Esso.
We understand that this acquisition was made without obtaining the necessary local approvals and represents a classic example of how not to complete such an acquisition of one of the private sector troves. Worse, this acquisition was completed without giving Bahamians an opportunity to bid for the Bahamian company after at least one Bahamian interested investor being advised that he would receive an invitation to bid on the Bahamian assets.
The Esso acquisition has significant, long-term implications for our national security interests from several points of view. In the first place, the ExxonMobil assets acquired in The Bahamas include the docking facility at Clifton Pier, the point where fuel not only enters the country for other oil companies, but also where BEC’s fuel is landed and processed.
Secondly, is it really in our national interest for such a critically important strategic asset to be owned by yet another foreign interest if the existing foreign investor has determined to divest itself of that asset?
Thirdly, do we really know who is behind this acquisition? It has been suggested that the investor of record behind this acquisition has tremendous financial backing with tentacles stretching all the way to Asia, which raises another very interesting question: Who are the real investors in this acquisition? We should know.
Towards a sensible, sustainable investment policy
There are many questions and concerns the people of The Bahamas need to have answered before all of our nationally important assets, those entities that light our homes and businesses, keep us connected to each other and the world, and power our land, sea and air vehicles, wind up in the hands of non-Bahamians. Are we forever to be relegated to standing on the sidelines and watching, as we are currently doing as the nation’s second largest employer, Kerzner, is in the process of being sold to we don’t know who. Or should we start demanding of our government that they immediately craft an investment policy that protects our national assets and our future way of life?
Note: In part two next week, we will discuss why we must urgently adopt a modern, progressive investment policy for the 21st century if we are going to finally really realize the dream of empowering Bahamians in a more meaningful way. Failure to do so will throw us back once again to being nothing more than servile workers, whose patrimony has been pillaged and whose bodies and minds are further enslaved. That would be a fate worse than the oppressions that the Emancipation Proclamation sought to rectify, a fate that we believed we had overcome and that our children, and theirs, would never have to endure.
• Philip C. Galanis is the managing partner of HLB Galanis & Co., Chartered Accountants, Forensic & Litigation Support Services. He served 15 years in Parliament. Please send your comments to firstname.lastname@example.org.
|Last Updated on Monday, 16 September 2013 15:09|