Cable and Wireless Communications (CWC) has found no friend in the Perry Gladstone Christie lead Progressive Liberal Party (PLP)

Undoing the BTC deal

By CANDIA DAMES
Guardian News Editor
candia@nasguard.com


Could it be done?


Officials of Cable and Wireless Communications (CWC) appear to have their work cut out for them.

In addition to delivering on all they and the government promised in the months and weeks leading up to the recent controversial closing of the Bahamas Telecommunications Company (BTC) privatization process, they must convince hundreds of BTC workers that CWC is not the enemy, but a caring employer and strategic partner in every sense.

That may be a tough task, but perhaps not an impossible one.

Accepting the defeat that has been handed to them, BTC union leaders have met with CWC representatives to try to iron out the best arrangements for their jittery members.

While it may reach agreement with the previously enraged unions, what is clear is that CWC has found no friend in the Progressive Liberal Party, and if its leader, Perry Gladstone Christie, delivers on what he promises if he wins the next general election, CWC could face more problems that it bargained for.

But that’s if Christie wins, and if he follows through on his warning to undo this deal.

The former prime minister issued the threat to CWC on several occasions, most recently a week ago as the company and the government were preparing to finalize the transaction.

“This is a bad deal,” Christie said.

“The deal stinks and the PLP remains committed to regaining this asset for the Bahamian people and allow the Bahamian public to have a full and public view of the entirety of this transaction.”

But while Christie is sure he would undo the deal, he apparently has not yet settled on how it would be achieved.

Each time he threatened to change the terms of the deal, we carried the warning, but there really was never any indication about what steps he would take to deliver on this promise if he forms the next government.

So National Review decided to ask him.

Christie revealed that he would seek advice from lawyers because it would have to be done legally, of course.

“The mechanics will have to be left to the kind of advice we will get on the matter,” he told us.

“I’m not prepared to comment on those matters.”

Three PLP parliamentarians who are lawyers also told us they are not prepared to speak behind the leader.

One of them said, “We won’t get our messages mixed up on this one.”

So what really would be Christie’s options on this?

Thomas Evans, QC, was not intimately involved in the BTC deal, but has vast knowledge of the law and commercial transactions.

“Because they are the government I suppose they can do whatever they choose,” said Evans, speaking generally about governments.

Evans recalled years back when he was in the Office of the Attorney General.

He was bold enough to write to the government and advise it could not do something.

“I was very quickly rebuffed and told ‘Look, we’re the government. We can do whatever we feel like doing’. That’s true, but there are consequences for certain things that they do.”

Evans pointed out that if one party reneges on an obligation that it assumes in entering a contract, then that violates and encroaches on the other party, and that other party is entitled to sue and recover damages for whatever loss is incurred as a result of the breach.

“So, while the government could go ahead and not perform an obligation which it assumed, there are consequences,” he repeated.

PENALTIES

Another lawyer close to the PLP suggested to us that one way in which a new Christie administration could force a deal change is by reducing the three-year exclusivity period for cellular service.

“CWC would have to determine how that would affect its commercial interest because the deal may no longer be viable,” noted the lawyer who did not want to be named.

“It may give them a commercial impetus to say rather than just paying us the penalty we want out of the entire deal.”

But that would call for hefty penalties.

In its agreement with CWC, the government has agreed “to pay to the purchaser such amount as is equal to the loss, expense, damage or other liability (calculated on the same basis as would be used for determining damages for breach of contract) incurred by the purchaser which arises as a result of a second cellular license being issued prior to the third anniversary of completion, and/or a second and third cellular license being issued prior to the fifth anniversary of completion.”

Under the agreement, the government has agreed to pay CWC $100 million if one or more additional cellular licenses are issued within the next year.

It would have to pay $80 million if one or more licences are issued within the next two years and it would have to pay $40 million if it issues one or more licenses within the next three years.

If the government issues a third cellular license after the third anniversary of the closing of the sale, but prior to the fifth anniversary of completion, it would be subject to a $20 million penalty.

So it would seem unlikely that the Christie administration might want to go this route, but given that Christie has not yet received advice from lawyers, that of course remains unclear.

Evans said if the government decides to go to Cable and Wireless asking for two percent of the shares back, it would likely have great difficulty “because you’ve got a deal.”

“Once a contract has been entered into between two parties it can’t be changed unless you have the consent of both parties,” he explained.

“It can’t be altered. One person can’t unilaterally alter the terms of the contract, even if you are the government.

“So, Cable and Wireless would say ‘Look, the deal I have is a deal. I acquired 51 percent. That’s what I wanted. I am not interested in 49 percent, and I’m just not going to agree.

“I don’t know that there’s any way that the government, even though they’re the government, would be able to compel Cable and Wireless to agree to surrender their two percent.”

Evans said the fact that a new party takes over the government doesn’t change the obligations that were assumed by the previous party because the government is the government.

“A party doesn’t make the government even though the constitution says that after an election the prime minister is the person who is the leader of the party that has the majority in Parliament.

“To that extent there’s a measure of connection between the government and a political party. But the point I’m seeking to make is that the government is the government.”

TAX FRUSTRATIONS

When he spoke in the House of Assembly recently, Golden Gates MP Shane Gibson, who served as a minister in the Christie Cabinet, noted that there are all sorts of creative ways in which a PLP government could pull the rug from under CWC.

Gibson — who served as president of the Bahamas Communications and Public Officers Union (BCPOU) during initial attempts to privatize the then BaTelCo in the 1990s — expanded on those comments when he spoke with us for this piece.

“Obviously Cable and Wireless would have gotten what they consider to be an air-tight agreement from the government,” he said.

“And they are making it very difficult to introduce competition [any time soon] and they are making it difficult to have any other operator come in here, and making it difficult for a new government to be in a position to force them back to the table.

“As I said in Parliament, there are many ways that you can force a company like Cable and Wireless back to the table.

“We can tax them on certain aspects of their income; tax them on certain areas of the different services that they provide. For instance, we could put a special tax on mobile services. They’re the only one who provide mobile services in The Bahamas.

“So we tax them 15, 20 or 30 percent on mobile services, so there are many ways.”

Gibson had another idea.

“If we’re in charge of URCA (the Utilities Regulation and Competition Authority), we could have discussions with URCA and make sure that individuals at URCA, advise them, or encourage them not to allow them (CWC) to go up on rates to offset taxes that they would have on certain parts of income.”

But given that URCA is an independent regulator, that too appears unlikely.

Gibson said that at the end of the day “it is known that the Bahamian public wants nothing to do with Cable and Wireless and they want BTC back in the hands of Bahamians.”

He said Bahamians have been running BTC for decades and “at the end of the day they almost feel that we are going back 100 years”.

“Once certain members of any elite group decide that they want to purchase, whether it is a property or a company, it is very difficult to persuade them to give it back to the people that it belongs to,” Gibson said.

“So it’s important to put it back in the hands of the people.”

CONSTITUTIONAL CONSIDERATIONS

We also asked prominent attorney Brian Moree how Christie might be able to get BTC back in the hands of the people, if he is re-elected.

Moree, who had no involvement in the BTC deal, said given the very strong and very direct comments from Christie, one would assume that he has a legal basis for making those statements.

“It would be surprising that that position would be adopted unless they had the benefit of some advice to suggest that the transaction could be impeached or reversed if they were elected,” Moree said.

“Generally speaking, if you’re going to challenge a transaction of that sort retrospectively or after the event, one would have to look to see if there were any constitutional issues, which would be relevant and whether proceedings on the public law side of the court could be commenced, either by way of judicial review or some other process.”

Constitutional issues were raised by one respondent when URCA was considering the BTC/CWC deal.

That respondent asserted that the proposed exclusivity of the licensee is ultra vires the Constitution of The Bahamas.

The respondent stated that URCA cannot be party to an unconstitutional result and should require the applicants to address the question as to whether or not the exclusivity arrangement offends the Constitution.

URCA said it was aware of discussion of this issue by the Judicial Committee of the Privy Council in the Marpin Case2, a Dominican case in which the Judicial Committee held that a monopoly to control a means of communications can amount to a hindrance of freedom of expression, provided that it is proven that the restriction exceeds that which is reasonably justifiable in a democratic society.

URCA noted that the Committee in that case did not make any conclusive finding, but referred the issue back to the Dominican courts for a consideration of the particular facts in the context of the above test.

“In any event, constitutional issues, such as this, are highly complex and would properly involve significant judicial scrutiny of the facts surrounding the challenged decision. URCA is not the appropriate forum to consider matters of constitutionality of legislation in The Bahamas, and is therefore not competent to determine this point,” URCA said.

Supporters of Christie’s plan to take back a controlling interest in BTC point to similar action taken by Prime Minister of Belize Dean Barrow who in 2009 brought legislation to nationalize Belize Telemedia Limited (BTL) in the public interest.

Barrow promised “fair and proper compensation” and said the move against BTL was not “some cowboy action, but something done in the full plentitude of, and compliance with, our constitution.”

INVESTOR CONFIDENCE

Moree said a degree of responsibility must be attributed to people in public life who make statements concerning these serious matters.

“That is why I said that I assume persons have obtained legal advice to support the position which they have adopted,” he said.

“I’m not aware of that legal advice, so I would not want to speculate.”

While he did not speculate, Moree raised the issue of investor confidence.

“The Bahamas as a sovereign country [must] acknowledge that there has to be a continuity of governance regardless of which political party is in power at any point in time,” he said.

“And when persons are dealing with the Government of The Bahamas, they have to have a level of confidence that their dealings — assuming that they’re lawful and they’re proper and there has been no corruption — they need to have the confidence that if they deal with the government which happens to be the FNM one day, that their transactions aren’t going to be the subject of litigation if another party comes in...”

Gibson said the Christie government has no problem with foreign investors, but is concerned about safeguarding national assets.

“If you look around and you try to identify one single project that this FNM government would have brought to The Bahamas since coming to office in 2007, I don’t think you could do that,” Gibsons aid.

“All of the projects that they are sitting and smiling over right now were projects that were initiated under the Progressive Liberal Party administration.

“And so, we’re not anti-foreign investors. We are anti-Cable and Wireless.”

Gibson said many Bahamians would have welcomed AT&T or T-Mobile, but not as majority shareholders.

“We’re not talking about foreign investors; we’re talking about this specific deal with Cable and Wireless, which seems to be the greatest giveaway ever in the history of The Bahamas,” the MP said.

PLPs would no doubt point to the instances where the Ingraham administration, upon assuming office in 2007 undid some of the deals left in place by the Christie-led government.

The straw market deal, incidentally, which was undone by Ingraham, remains unresolved with some of the professionals who had agreements with the government still waiting to be paid.

Of course, there were no such agreements on the magnitude of the BTC deal, but those actions by the new government led to the popular ‘stop, review and cancel’ phrase tossed about by PLP politicians.

When they took over last week, CWC executives seemed unbothered by Christie’s threats.

“In terms of our operations with government, we have a number of operations with governments across the globe in which we have very successful relations with them,” said Gerard Borely, chief financial officer of LIME, CWC’s regional arm.

“And we have successful relationships with governments no matter who is in power. The reason for that is because we deliver value and service to our consumers and governments, value that they appreciate. And we expect that to continue to be [the case] here.”

4/11/2011

thenassauguardian

Bahamas Blog International

Exactly what do we know about Mr. Branville McCartney so far?

The enigma known as Branville McCartney

By Rick Lowe


Mr. McCartney recently resigned from the government, (as he should have), remaining in Parliament as an independent MP, and rumour has it he will start a new political party to contest the next general election.

Upon hearing this, one of my nephews e-mailed from Abaco to say how exciting this was and felt this new party would win if they could field some good candidates.

My response, after consulting my political crystal ball, was that he might not even win the Constituency he currently represents, (Bamboo Town) again, much less the government based on what we know about him and his policies and how he proposes to implement them to date.

Exactly what do we know about Mr. McCartney so far?

1. He thinks illegal Haitians should be repatriated.
2. He thinks Bahamians should be able to succeed.
3. He is opposed to Cable & Wireless buying BTC.

Now what do we find when we look at what the FNM and PLP think about these things?

Believe it or not, Mr. McCartney, or "Bran" as he is affectionately known, agrees with both the major political parties on the first two points, and agrees with the PLP on the third, since they changed their position on privatisation that is. So what's he got that the other two parties don't have?  Problem is we don't know yet.

Until Mr. McCartney releases a position paper on major issues and how he will "plan or fix" things so Bahamians can get to know him, he stands for nothing original at this point. In fact he just might be so nationalistic that he sets the country back even further than the "devils" we know.

This quote from Nobel Laureate and economist, F.A. Hayek from his masterpiece, The Road to Serfdom, seems appropriate:

"The effect of the people's agreeing that there must be central planning, without agreeing on the ends, will be rather as if a group of people were to commit themselves to take a journey together without agreeing where they want to go; with the result that they may all have to make a journey which most of them do not want at all."

In the mean time it will be fun watching the political posturing until his cards are played for all to see, because at this point Mr. McCartney is little more than an enigma.

Monday, March 28, 2011

weblogbahamas

Bahamas Blog International

The "evil role" of the Progressive Liberal Party (PLP) in the Privatisation Process of the Bahamas Telecommunications Company (BTC) to Cable & Wireless Communications (CWC)

Maynard: BTC/CWC Issue Damaging Bahamians’ Psyche

By IANTHIA SMITH


Golden Isles Member of Parliament Charles Maynard said he believes Bahamians have been brainwashed into thinking that the deal between the Bahamas Telecommunications Company (BTC) and Cable & Wireless Communications (CWC) is more controversial than it really is.

Mr. Maynard said as much as he led off day two of debate on the BTC privatisation in the House of Assembly Tuesday afternoon.

In fact, he said it was a plan masterminded by the Progressive Liberal Party (PLP) that has obviously been working as tensions mount in the country over the pending BTC/CWC deal.

He added that ever since the government made steps to privatise the state-owned company the official Opposition has played an "evil role" in the entire process, a process he said has toyed with the minds of the Bahamian people, and that he added was more then evident at those mass rallies, motorcades and protests that grabbed the country’s attention.

"They have done considerable damage to the psyche of many Bahamians," Mr. Maynard said. "They have stirred up emotions that really didn’t need to be stirred up and I think that the worst victims are the employees of BTC.

"What I don’t understand and cannot appreciate is why would you play with the emotions of the hardworking people at BTC, why would you do that? Why would you make people feel uncertain about their futures, why would you encourage them not to meet with who could be their potential new bosses? What benefit would that have to them?"

To say that the BTC/CWC issue has drawn battle lines in the country would be an understatement.

Free National Movement (FNM) and PLP supporters, BTC union representatives and workers and the general public are either for it or against it, but whatever their position they made it known with posters, bullhorns and even blood, sweat and tears.

But according to Mr. Maynard these actions are being fuelled by the PLP who he said is "behind all of the civil unrest in the country right now."

North Andros and Berry Islands MP Vincent Peet would tell you that while he has no problem privatising BTC, however, he said he does have a problem with the lack of transparency with the process.

"It appears to me that Cable &Wireless is the only winner here," he said. "Why is there a two per cent fixed operating fee to be paid to Cable &Wireless for managing BTC?

"It is highly improper for an entity to purchase another entity and then be paid to manage that new entity. This is a guaranteed amount and they get this money even if BTC doesn’t make a cent."

Mr. Peet also accused the government of "selling Bahamians’ generational property" to CWC.

However, Montagu MP Loretta Butler-Turner was quick to shoot down that thought as she claimed she has too strong of an attachment to the country to ever stand for such a thing.

"My grandfather Sir Milo Butler fought for the rights of Bahamians and (you) dare say I, who still live among my people would come in here and sell out our birthright for the Bahamians I live with and see everyday," she said.

"I am a third generation Bahamian. I don’t have to buy the loyalty of Montagu, I live among my people I have to pass them everyday. These are people that I go to church with, went to school with, that I live with, that I work with, they know me. They don’t have to worry about their MP selling out their birthright."

The debate is expected to end on Thursday.

March 23rd, 2011

jonesbahamas

Bahamas Blog International

Bluewater versus Cable & Wireless - and the Privatisation of Bahamas Telecommunications Company Limited (BTC)

When did the unions purchase BTC?
tribune242 editorial


TODAY MANY Bahamians are confused. They would like to know when the unions purchased the public's telecommunications company, which would give them the right to say whether the company can be sold and to whom.

As far as the public is aware those making the noise in the public square are employees of a publicly owned company with a contract of service that can be terminated by either side to that contract. In other words a union's only argument should be about the employment of its members and the terms of that employment, certainly not about the ownership of the company. However, if unionists believe they have an entitlement -- over an above their contract of service -- then they should bring their papers and publicly prove their point. Otherwise, it is the government -- not the unions-- that was elected to represent the Bahamian people. And it is the people, represented by their MPs in parliament, who will have the final say on the sale of BTC.

Bernard Evans, president of the Bahamas Communications and Public Officers Union, who has taken the union's fight to the International Labour Organisation (ILO), has claimed the government was in violation of an ILO convention which calls for the government to engage workers in a "transparent manner to discuss issues of life-changing effect."

How can the union leader support this complaint when he was on the BTC privatisation committee where the matter was discussed and recommendations made to government, and when the Prime Minister himself met with union executives and invited them to meet for discussions with the proposed new owner's chief executive officer? It is understood that at the meeting with the Prime Minister, although the union leaders expressed their displeasure at Cable and Wireless as the new owners, they at least agreed to meet with the company's CEO for a discussion.

David Shaw, CEO of Cable and Wireless, flew in specially for that discussion. The union sent its regrets.

They complain that no one will talk with them, that they do not know what is going on, that what is being done to them is "wicked and intentional" because government never truly wanted them to be "a participant in that discussion." How can there be a discussion if one side to that discussion refuses to come to the table? How can doubts and fears be discussed and removed if a reasonable discussion cannot take place? Bullying tactics will not succeed. The louder they shout in the public square, the more support they lose by a large segment of the population, already dissatisfied with BTC's service.

Mr Evans has accused the government of trying to "muddy" the waters by comparing the PLP's terms of agreement to sell BTC to Bluewater with the terms offered to Cable & Wireless. He claims it is a "non-issue" for the unions and hardly worthy of comment.

Unfortunately, it is not a non-issue and is most worthy of comment, because with the Christie government, it was the union that also agreed to the Bluewater deal. Apparently, the union had no problem with this untried and untested foreigner named Bluewater, nor did it protest the terms of that agreement. Whenever it is referred to by Mr Christie he is careful to make it clear that the union was on board, and until now the union has not protested.

The main dispute is that the PLP offered Bluewater 49 per cent of the company, while the FNM offered Cable and Wireless 51 per cent. Now let's examine the meaning of the two offers in practical terms.

In the Bluewater agreement, management and control of BTC was to be given to Bluewater without it having paid for the majority interest. Bluewater was also given control of the board because it had a greater number of directors on it. It also had complete control of the day-to-day management because it had sole authority to select the company's Chief Executive Officer (CEO). In other words Bluewater with its 49 per cent would have effectively secured majority control of BTC without having paid for it.

On the other hand Cable and Wireless (CWC) paid for its 51 per cent majority. On closing the net cash benefit to the government from the CWC deal will be at least $202 million, whereas the net value of the Bluewater transaction on closing would have been $150 million, and not the $260 million as claimed by the politicians.

Bluewater was granted an exclusivity period of six years for both mobile and fixed line services while CWC's exclusivity period for mobile service is three years, and the fixed line no longer applies as it has already been liberalised.

And so when the facts are examined, not only is government financially better off selling to CWC, but CWC has had to pay for its control of the company, whereas the Bluewater deal -- agreed by the Christie government, and one can assume by the union because of its silence at the time -- received exactly the same control of the company for which it would have paid no extra -- and for which it would have been paying in instalments over a six-year period, instead of cash. The bottom line was that Bluewater with its 49 per cent got complete control of the company without paying any extra, while CWC with its 51 per cent also got complete control of the company, but at a price.

December 17, 2010

tribune242 editorial

Bahamas Blog International

The Blue Telecom group Makes New Bid For The Bahamas Telecommunications Company - BTC

Blue Making New Bid For BTC

 

 

 

 

By Candia Dames

candiadames@hotmail.com

Nassau, Bahamas

29th November 2004

 

 

One year after it was kicked out of the race to purchase a minority stake in The Bahamas Telecommunications Company (BTC), the Blue Telecom group has made adjustments to its bid to try to meet the government's expectations and the reality of the existing value of BTC.

Blue's President Lindbergh Smith, in an interview with the Bahama Journal on Sunday, said his company still has the right ingredients to become the long-awaited strategic partner in the state-owned telephone company.

The Bahama Journal contacted him after Minister of State for Finance James Smith indicated that while there is no 'formal privatisation process' in place, the government is still open to favourable bids.

Mr. Smith, the Blue executive, also said the need to privatise BTC is even more urgent at this time.

"I think it's a necessity now based on the competitive forces that exist in the market place in The Bahamas", he said.  "It's evitable that the government has to get out of the telecom business in order for the company to be on good footing to compete against entities like SRG (System Resource Group) and Cable Bahamas."

SRG recently announced that it is starting its business and residential services and intends to compete head on with BTC.

SRG President Paul Hutton-Ashkenny said his company's entrance into the telecom industry is an indication that the government sees the liberalization of the telecommunications sector as a critical pre-condition for achieving economic development in the country.

Industry sources say that it is most urgent that the government recognize the extreme dilemma that the entire telecom industry and the financial and business community would suffer if the government does not move quickly to relinquish its control of BTC and put it into the hands of an entity that has the financial capabilities, management and technical know-how to allow the company to be able to compete in the local market against SRG, Cable Bahamas and other competitors that are soon to come.

They say that based on the contract proposal issued to The Bahamas Communications and Public Officers Union last week, it is clear that the board and executive management team of BTC recognize that the company has to be repositioned for competition.

The proposal calls for the benefits now enjoyed by BTC employees to be slashed up to 60 percent.

"We are sure that the shareholders of Cable Bahamas and SRG are laughing all the way to the bank because of the government's reluctance and procrastination in the privatisation process of BTC", said one industry insider.

Minister Smith, meanwhile, said the move toward privatisation is an ongoing exercise.

"It's just that it's not going to be done in the way it was done originally", he said.  "If a prospective buyer came along with the right attitude and the right price, I'm sure the government would be obliged to entertain the bid.  So the process may have come basically to a halt, but not the intent."

He said that BTC has to "continue to do things to develop and expand its managerial capabilities, develop its staff, while at the same time look for efficient ways of government having to divest its interests."

Mr. Smith (Blue President) believes that now is the time for the government to move ahead with the privatisation process.

"For the board and management of BTC to assume that they are in a position financially and futuristically to compete in a smaller entity like SRG or Cable Bahamas is very fool hardy", he said.

In his budget communication to parliament in May, Prime Minister Perry Christie made it clear that the recent termination of the privatisation process does not mean that the government has abandoned the privatisation of BTC.

"On the contrary, the privatisation of BTC remains an important item of my government's economic agenda", he said.  "Accordingly, the privatisation will be re-launched as soon as circumstances reasonably allow and on a basis, moreover, that will take adequate account of the lessons that were learned in the earlier process."

The Bahamas Telecommunications Company - BTC would be "eaten alive" if it is not privatised

Without Privatization, BTC Would Be "Eaten Alive", Minister Says

 

By Candia Dames

candiadames@hotmail.com

Nassau, Bahamas

May/24/04

 

 

 

The Bahamas Telecommunications Company would be "eaten alive" if it is not privatised, Minister of State for Finance James Smith said Sunday, while on the Love 97 Programme "Jones and Company."

 

"That's why the whole idea was to prepare it for privatisation", he said.

 

Minister Smith pointed out that the reason why BTC has continued to earn profits over the years is because it is a monopoly.

 

"They are fooling themselves if they think you could remove the monopoly and leave it open to competition", said the Minister, who was referring to critics who say BTC can become more efficient and survive without privatisation.

 

He added that BTC has the technical skills, "but they seem to lack the client concern that motivates big companies...these guys have been a monopoly for so long, they say 'You wait for me'."

 

Minister Smith reiterated that privatisation of BTC "is still on the table."

 

The original process that was started about five years ago has to be brought to a successful, legal ending, he noted.

 

"By that I mean we had put in place certain rules and regulations for privatisation and we went through with that and the very last thing now is to have a public announcement and to amend the public policy statement which we put in accordance with the Act", Minister Smith said.

 

He added, "This exercise has come to a close, but we will continue to talk to people until we can get what we want which would be a good price, a commitment to capital development, a commitment to training Bahamians and a commitment to upgrading the technology to first world standards."

 

While on the same programme several weeks ago, Lindbergh Smith, president of Blue Telecommunications, indicated that his company was willing to pay as much as $300 million for 49 percent of the shares in BTC.

 

Blue was the last bidder to be kicked out of the race to purchase minority ownership in the company late last year.

 

Asked if the government would be willing to accept that offer, Minister Smith said he didn't want to comment specifically on any one group.

 

"I don't want to comment on what I believe might be sort of confidential things, but there could be offers for BTC&", he said. "But you have to look very closely at how it is going to be funded. BTC is still a very well off corporation...you can probably buy BTC using its own resources."

 

Minister Smith added, "There have been some very creative financing things that were not quite [acceptable]."

The Free National Movement - FNM Wants Bahamas Telecommunications Company - Batelco Sold

FNM Wants Batelco Sold

Candia Dames

candiadames@hotmail.com

Nassau, Bahamas

23/04/2004

 

 

 

Saying that it is concerned about the state of affairs at the Bahamas Telecommunications Company, the Free National Movement lashed out at the government Thursday for failing to privatize BTC by now.

 

Meanwhile, State Minister for Finance James Smith told the Bahama Journal that several companies have expressed an interest in acquiring the 49 percent shares of the company, even though no bids are being accepted at this time.

 

The FNM said in a statement that under an FNM government, the company would have been "sensibly privatized" already.

 

"The privatization exercise, under the indecisive and stubborn PLP, has not only slowed to a crawl, but continues to cause the stakeholders - the Bahamian people - headaches and frustration," the FNM said.

 

The initial attempt to privatize BTC started more than five years ago under the FNM government, but ended abruptly several months ago, when the final bidder in the race, Blue Telecommunications, was rejected.

 

The Government of The Bahamas reportedly spent around $160 million preparing the company for privatization.

 

"By this time, had the PLP government continued the privatization process they found in place, the matter would have been resolved and Bahamians and businesses would today have access to a modern system."

 

Speaking to the Bahama Journal earlier in the week, Minister Smith said privatization is "not off the table."

 

"The rules for privatization which led to the short listing of the bidders and then the rejection of all bids, I think that part of the chapter must be officially closed," he said.

 

"We now have to look at a new model which could be talking to any companies that are still interested.  Several companies are saying that they are interested in purchasing BTC or becoming a partner in that process, but I think to be able to do so legally and effectively, we have to bring a formal end to the initial privatization process and I think we will be doing that and then we will continue to look around."

 

Blue is one of the companies pushing the government to sell, indicating that it is prepared to offer $350 million for minority ownership in the telephone company.

 

Asked if the government is taking this particular offer seriously, Minister Smith said, "We take all offers seriously and all serious offers seriously.

 

"The point is Blue was a part of the initial process and we have to bring that process to an end and then we are free to talk with Blue and any other company."

 

In the interim, he said, there is a need to continue to upgrade BTC in terms of its management structure and governance.

 

"There are a number of things that I think will be happening shortly with BTC," Minister Smith projected.

 

But the FNM insists that BTC is in a mess.

 

"Not only are BTC subscribers tired of poor basic services while the company claims it has enhanced modern technology, but local Bahamian business persons are increasingly angry over the fact that nobody in BTC - by extension in the government - seems to care about their welfare," the FNM statement said.

 

"These are Bahamians who, once BTC launched the quick cell programme in late 2001 and opened doors of business opportunity for the sale of cell phones, accessories, phone cards, etc, made arrangements to capitalize on those opportunities," it continued.

 

The FNM blasted BTC for setting up Cyber World shops in Nassau and Freeport "in direct competition with small Bahamian business persons, pushing mercilessly into the retail market, and effectively squeezing these people out."

 

The party also pointed to BTC's extensive advertising of the stores.

 

"That cannot be right," the statement said. "That cannot be fair. That cannot be just. That cannot be what the PLP on the campaign trail in 2002 promised would be help and hope for Bahamians."

 

The FNM said that the bottom line is that while BTC, steered by the PLP government, is going up and down the country promoting the introduction of GSM telephone service in The Bahamas, the fact is that the service is still currently unavailable for popular use."

New Offer For Bahamas Telecommunications Company - BTC

New Offer For BTC

Candia Dames

candiadames@hotmail.com

Nassau, Bahamas

06/02/2004

The final bidder pushed out of the race to purchase a minority ownership in the Bahamas Telecommunications Company is preparing a new offer to make to the government, the Journal has learnt.

 

But the Tenders Commission is not now open to any new proposals, as it has started another phase of privatisation, which would take on another form from the effort initiated more than five years ago.

 

Still, Blue Telecommunications plans to approach the government with a more fine-tuned and "more convincing" plan.

Company officials are hopeful that the government would at least be willing to entertain them.

  

The group's President Lindbergh Smith on Thursday was not prepared to speak to such reports.  But he did hint that his company is still interested in having a stake in BTC.  "The Minister of State for Finance alluded to the fact that BTC still has to be privatised," Mr. Smith told the Journal. "As a Bahamian, I am encouraged by the fact that the government is still committed to privatisation."

 

Financial Secretary Ruth Millar, who chairs the Tenders Commission, has told the Journal that the government has given the Commission a new mandate to review other options for privatisation of the telephone company.  But Mrs. Millar declined to say much else.

 

One source close to the Commission said Thursday that it is "utter nonsense" for Blue to still be working toward a plan for BTC.

 

"Their plan was rejected because it was not in the best interest of BTC or The Bahamas," he said.  "The Commission has been instructed to end that entire phase."

 

In rejecting Blue, the Commission revealed that there were serious concerns regarding the company's financial structure.

 

Blue reportedly planned to help pay for its stake in BTC by using the phone company's assets to borrow.

 

But a Blue official has since denied this saying that was, "totally untrue.  That was not so.  It was totally speculation that was pushed by some of the members of the Commission who do not favour privatising BTC."

 

According to the official, it was Blue's original plan to borrow on the assets of the company.

 

"The government was not comfortable with that and wanted a clearer transaction," he explained.

 

He said that in its revised plan, Blue was prepared to do an all-cash transaction.  While Blue is reportedly preparing its comeback, BahamaTel Consortium, which was headed by Tom Bain, has given up on BTC altogether.

 

Shortly after the government rejected the BahamaTel offer due to what Mrs. Millar called a deficient business plan, Mr. Bain told the Journal that his group had come to the end of the line.

 

State Minister for Finance James Smith has said that the government is "shifting gears" as it relates to the privatisation of BTC.

 

In the meantime, he said BTC has to "continue to do things to develop and expand its managerial capabilities, develop its staff, while at the same time look for efficient ways of government having to divest its interests."

 

The plan of the former government was to privatise the then Batelco and give it time to prepare for competition before opening the market.

 

But with that process failed, the new government is looking more toward liberalization of the telecommunications sector with its Telecommunications Sector Policy reportedly being revamped.

 

The idea now is reportedly to prepare BTC for the onslaught of competition that is surely to come in the near future.

 

Speaking at the Bahamas Business Outlook seminar on January 20, Minister Smith said the privatisation process "ought not to be abandoned since a privatised BTC would not only provide additional funds to government for debt reduction in 2004, but should also provide increased capacity for expanding technology including high speed data transmission capabilities which are essential to the e-commerce development effort."