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Government 'significantly' exceeds $100M overdraft

By AVA TURNQUEST

Tribune Staff Reporter

aturnquest@tribunemedia.net

PRIME Minister Perry Christie yesterday announced that the government has "significantly" exceeded its $100 million overdraft at the Royal Bank of Canada.

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Prime Minister Perry Christie

While he opted not to reveal the exact figure, Mr Christie pointed out that the former administration's plan to sell government held shares in the Bahamas Telecommunications Company to the public was a bid to collect revenue to cover the sum.

"We were elected on the basis that we would move to acquire the majority interest of the company," he said.

"The nine per cent was being sold, based on my advice and information, to back up an extension of the overdraft of the government. Even though the motive was to pass (shares) on to people, they were raising sufficient monies to cover a new level of overdraft that the country had gone to."

"We opposed the sale to CWC, we opposed divesting the country of the majority interest (in BTC), we were fundamentally opposed to selling the majority shares so from a policy point of view we made a decision – even when we were privatizing – that we would not sell the majority interest to a foreign group."

Mr Christie said that he chose to consider other options to managing the overdraft instead of liquidating shares. He added that further consideration will be given on a public share offering once the government restores its majority stake in the company.

As he clarified his government's policy on negotiations to reacquire majority interest in BTC yesterday, Mr Christie maintained that "everybody wins."

"The idea is to ensure at the end of this process that we have a result that Cable and Wireless can live with, that we can live with, that the country will be the maximum beneficiary of," he said.

"When you have a country that was divided over a sale, no manner of public relations is going to take that away from you. We're going to take an approach that will unify the Bahamian people in respect to this matter going forward."

He added: "It's not going to affect CWC and their bottom line, it’s not going to affect their ability to make a profit because that's what we're interested in ensuring, but we also want services that are very efficient and an end to dropped calls and we want to do all of the things that we expect an efficient company to do."

Earlier this month, CWC chief executive Tony Rice stated that "public opinion" supported BTC's privatisation, and that he did not see Prime Minister Perry Christie’s pledge to regain a majority stake in the telecommunications carrier as “a threat.” Mr Rice added that he did not believe that renegotiations would affect management control.

Yesterday, Mr Christie said he has held cordial meetings with BTC executives with the view of contextualizing discussions to ensure amicable negotiations, and added that he did not wish to get into a back-and-forth argument with the company through the media.

"I just hope that the monies (CWC) is spending on public relations is not intended to be public relations to negatively impact my government or to communicate things to me that they could communicate very easily by picking up the telephone or making an appointment to see me," he said.

"You don't have to talk to me through the press."

The government will be represented by former BTC CEO Leon Williams, former MP Franklyn Williams, former Attorney General Sean McWeeney, and attorney Rowena Bethel.

Mr Christie's comments follow reports that the government's decision to revisit the deal has attracted speculation from Wall Street credit ratings firm, Moody's.

The agency is reportedly concerned with how the government will fund any changes to the $204 million sale, and whether or not the renegotiation has public support.

At a press conference yesterday, Mr Christie said the top Wall Street firm did not consult with the government over concerns raised.

Earlier this year, the credit agency also spoke out against the Christie administration's proposed Mortgage Relief Plan.

Analysts concluded that the initiative could undermine efforts to reign in national debt, and warned that the scheme will likely cost Bahamian taxpayers over $200 million to implement.

In defense of the government's proposal at that time, Minister of State for Finance Michael Halkitis said the credit agency did not fully understand what the government intended to do, and had based their report on "erroneous" assumptions.

Yesterday, Mr Christie expressed confidence in his government's ability to drive up international ratings and investor confidence through concerted focus on direct investments in the Family Islands and effective management of the economy.

Comments

Arob 10 years ago

And yet you are on a spending spree! What happened to fiscal responsibility?

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