By NEIL HARTNELL
Tribune Business Editor
nhartnell@tribunemedia.net
Foreign developers and lenders are increasingly including ‘political risk’ in their assessments of whether to invest in the Bahamas, a key member of the Government’s BTC negotiating committee conceded yesterday.
Confirming that he had personally been informed of this by a major international banker, Franklyn Wilson, one of the four-strong committee mandated by the Government to re-negotiate the Bahamas Telecommunications Company’s (BTC) privatisation, nevertheless blamed the former Ingraham administration for sparking the ‘political risk’ trend through its handling of the $2.6 billion Baha Mar project.
Acknowledging that the Government’s attempts to regain a majority equity stake in BTC from Cable & Wireless Communications (CWC) could damage investor perceptions of the Bahamas if the issue was handled badly, the Arawak Homes chairman said of the committee: “We are so conscious of getting this right.”
Agreeing with Tribune Business that the move to re-negotiate the deal with CWC could undermine investor confidence in the Bahamas, and create uncertainty as to whether contracts would be honoured from administration to administration, Mr Wilson said there was “no doubt” that political risk was now being factored into Bahamas investment decisions.
“I’ve heard that from a very senior banker at the head office of one of the biggest banks in the world,” Mr Wilson told Tribune Business. “I’ve heard that, so there’s no point in us Bahamians saying it’s not true or ignoring it. I have heard it.”
However, the Arawak Homes chairman said the BTC/CWC issue could not be viewed “in isolation” when it came to creating ‘political risk’ in the minds of potential Bahamas investors.
Blaming the former Ingraham administration for setting the Bahamas on this path, he added: “The real truth is that this matter started to raise its head beginning with the Baha Mar transaction.
“When the Government of the day interfered with the contractual relationship that existed with a high profile project like Baha Mar, that started this thought process. It’s become worse since then. But interfering with the Baha Mar thing after the 2007 election started this.”
When it took office, the Ingraham administration felt the initial Baha Mar Heads of Agreement, signed by the first Christie government, gave away too much prime Bahamian real estate to the developers. It also felt that land required by the developers should be transferred in stages, once certain milestones and commitments were met, and not all at once, up front.
While the BTC situation was “relevant” to the ‘political risk’ situation, Mr Wilson said yesterday: “Awareness has built to the stage where people are saying: ‘This ain’t where it started. The real place where this started was the Baha Mar transaction. It was high profile and a great controversy.”
The Ingraham administration agreed a supplemental Heads of Agreement with Baha Mar in early 2008, but the project then suffered a major setback when its equity partner, Harrah’s, withdrew.
Many blamed the former government for this, although the emerging global recession, combined with Harrah’s own financial position and recent private equity-led takeover, were just as likely - if not more - to have played a part.
Still, Mr Wilson said the ‘political risk’ trend “further accelerated” with the subsequent re-negotiation of the I-Group project on Mayaguana, another instance where the former government felt its Christie-led predecessor was giving too much land away.
He also cited the so-called ‘stop, review and cancel’ policies of the Ingraham administration that impacted some $60-$70 million worth of contracts earmarked for Bahamians.
“There were tonnes of business people adversely affected, although few decided to do anything about it,” Mr Wilson added.
The Ingraham administration at the time argued that none of these contracts were ready to be issued when it took office, with just two anywhere near a state of completion.
Still, acknowledging that ‘two wrongs do not make a right’, Mr Wilson said the alleged decisions/actions of the Ingraham administration did not mean the current government had to follow suit.
“That’s not to justify that if you’re going down a bad path, don’t keep going down a bad path,” he added. “We note the fact that others are concerned on this thing [the impact on investor perceptions of the Bahamas].”
Whether Mr Wilson’s admissions of the increasing ‘political risk’ situation, given his status as a leading businessman and PLP supporter, will influence the Christie administration’s BTC policy is unclear.
He is part of the Government’s four-man committee to negotiate with CWC, together with former attorney general (and key Christie adviser) Sean McWeeney; former Ministry of Finance legal adviser Rowena Bethel; and ex-BTC chief executive, Leon Williams.
Agreeing that how the four conducted themselves and the negotiations would be key, Mr Wilson told Tribune Business: “With respect to damaging the Government’s investment reputation, the fact of the matter is that we, the committee, are very conscious of that risk.
“We’re going to conduct ourselves in a way to best ensure that does not happen. We’re determined to do the best we can in that regard.
“The key is that we’re conscious of it. How we deport ourselves, how these talks happen, is very important. We are so conscious of getting it right.”
Critical to maintaining investor confidence in the Bahamas, Mr Wilson suggested, was the personality of Prime Minister Perry Christie, was “seen as a calm type of guy that will not be reckless”.
He contrasted this with the “ranting and raving” style employed by other world leaders who had renationalised major concerns, particularly the likes of Venezuela’s Hugo Chavez.
Comments
TalRussell 11 years, 8 months ago
None these serious questions should be addressed until after Comrade Franklyn and his Committee can issue an full report on the lingering mystery to the natives as to exactly how the foreigners CWC entered the picture to buy BTC?
Good lordy Franklyn, don't you know that the lawyer/fisherman from Cooper's Town built his very reputation for stop, review and cancel anything his former, trusted law partner was involved with?
Keep your focus on whether a 51% controlling ownership in BTC was a smart thing to do for Bahamaland's long term utilities interests? There are some things the government must control.
by TalRussell
242352 11 years, 8 months ago
Who are the Bluewater Group.
I was told that one or more of the team of four made up part of the Bluewater group.
The PLP needs to come clean on Bluewater!
proudloudandfnm 11 years, 8 months ago
I'm shoicked at Franklyn Wilson, I always thought he was a smart man. He knows there is no way this thing can work. No way CWC would accept a minority stake in BTC, they'd rather sell it all back than to work with the bahamas government pulling the strings. Franklyn can be a very dishonest man when it suits him. he's destroying our country'd reputation with his eyes wide open....
concernedcitizen 11 years, 8 months ago
there is a reason he is called the snake
concernedcitizen 11 years, 8 months ago
baha mar and the i group were two stalled projects ..basically izeleriam ,borrowed money from scotia to buy up the old hotels on cable beach .then PGC gave him a bunch of land to go around the world looking for capital ,harrahs won a twenty million judgement againts baha mar b/c they didn,t live up to their end of the agreement ...the chinese came in under HAI ,,come on Wilson people with half a brain can figure out u and your cronies want the profitable cell market with out putting up anything ,,,
Tarzan 11 years, 8 months ago
If Tal Russell and others of his political ilk, think it is such a good idea for the Bahamian government to own a mobile phone system, here is a plan that involves no "political risk" for the Bahamas.
Sell the shares in BTC still owned by the Bahamian government on the open market, based on the highest price anyone will pay. Take the money and start a competing mobile system that will be 100% government owned but will have to compete with privately owned and operated systems in the open marketplace.
Of course we all know, including Tal et al, that the government mobile company will go out of business in a short period because of all the cronyism and corruption that formerly plagued BTC, but it will make all these armchair patriots happy, while the rest of us can enjoy decent phone service at a fair price.
concernedcitizen 11 years, 8 months ago
some of the PLP supporters are so miss guided, they are begging to be whipped with the highest rates in the region and in 10 years outdated technology ,as PGC ,and the boys steal the profitable cellular market for themselves and leave us with a grossly overstaffed goverment dinosuar in btc
TalRussell 11 years, 8 months ago
BTC as bad as it was administered for (15) of the past 20 years "by" the red shirts regime, despite them trying to run it into the ground it still made a whopping profit.
Still not one of you dare address the lingering mystery question of exactly how it came to be that the foreigner CWC entered the buyers picture?
If Comrade Franklyn has his doubts he should be replaced.
bigdee 11 years, 8 months ago
when btc was sold cable and wireless shares went up why sell something that is makeing millons i say to the prime minster buy the shares back not evrthing is foreign is good my god let the bahamas goverement own something and i know the fromer minster will be mad but hey he out to be god be the glory
Observer 11 years, 8 months ago
If this is so, that foreign investors could become jittery because of the government's initiative, then, the Bahamians and others among, with capital, could embrace the multiplicity of business opportunities that exist, right here, HOME.
pfunkf 11 years, 8 months ago
it is sinful that we still have in the bahamas today people like russell,whenever we get the plp out of office the next time,i sugest we create a state out of a family island for such political slaves.we could call it pindlingville or something like that.we will never advance as a nation onto great heights laden down with somany government welfare dependents.they are addicted to political party dependence for every thing in their lives.the yoke of stupidity must not be tolerated much longer.turks and cacious have a populaion of about 30 thausand and they have free market telacom structure with three ptivate telacom companys. russell and the likes will never see past pindling and 1967 or the two and a half decades that proceeded.we could be stuck forever in the land of going nowhere as a nation if we do not seperate ourself from such.think about it,notice how they are beyond logic or rationle,only talk obout trivalities and relentlessly avoid substantitive dialogue.they offer nothing crative,their only passion is to seek to discredit the most productive political leader this bahamas have known to date" hai".and we know why that is,he put pindling out of business.the reality is,in this task of building our bahama nation some people are anly along for the ride.if the vehicle is not to their narrow liking they take pride in sabotaging our collective chances of obtaining national glory.we have our nation to build,the triffelers among are focused on their political party and how it can fill their selfish greed.
TalRussell 11 years, 8 months ago
Believe me my dear Comrades there is only pain and no joy each time i take take the lawyer/fisherman from Cooper's to task over his red shirts many failures.
What puzzles me is despite his regime's patch up financial polices which resulted in leaving so many natives in their worst ever financial positions in their life times, still you come on here to sing his god-like praises.
How could a man while knowing so many had no paychecks to meet the mere basic expenses of their famines run all over Bahamaland after he done rung the 2012 General Elections bell, telling natives how much they "loved" him?
by TalRussell
Puzzled 11 years, 8 months ago
TalRussell if you look at all the postings about the BTC sale on line, you will find references to the PLP government Talking to CWC back in the 90's about an alliance of some sort. This was prior to the talk of the sale of BTC. Mind you when you are reading these postings you have to realise that a lot of them are posted with huge political bias.
TalRussell 11 years, 8 months ago
I too have friends who were also years back engaged in talks with the government on BTC, but like CWC they were not a part of the bidding process?
It still remains a mystery, known only to the red shirts, exactly how CWC came to own BTC?
concernedcitizen 11 years, 8 months ago
the only mystery is that the boys didn,t steal the profitable cell ph ,thru the front company bluewater ,,of course any gov ,corp can be profitable if they charge 40 cent a minute in the day and 20 cents at night ,,when the average rate in our region is 12 cent in the day and 6 at night ,,we have been absorbing our out of control sexual habits ,ie single mother of 6 by age 25 ,and schools that can,t teach with a grossly overstaffed uncivil ,civil service,that is why are taxes and fees are so high and we continually borrow .when 1 in 4 people work for the goverment ,that means you have 3 productive people supporting someone that produces no goods and very little service .its a ratio that can not substain itself without borrowing ,we are following the other nations in our region ,our birthrate is outpacing our gdp growth and we will have larger and larger groups of poor ,unemployable masses ,ie ,haiti ,jamaica ...
TalRussell 11 years, 8 months ago
Comrade Franklyn, or CWC, can you state whether or not the sale of BTC was accompanied with an "Accommodation" clause(s) in the Agreement of Sale? If so, will you immediately disclose the full details to Bahamaland's natives?
by TalRussell
242 11 years, 7 months ago
You must have over 1,000 photos of Hubert Ingraham stored on your commputer
concernedcitizen 11 years, 7 months ago
tal loves him a little papa
TalRussell 11 years, 7 months ago
For a while the lawyer/fisherman from Cooper's Town had the respect of Bahamaland's natives, never their love.
Even he on the night of Decision Day 2012 had to admit he was no longer needed or wanted.....so Comrades as you can see it ain't just me alone, reminding him of his reality in Bahamaland's history? He was given the power to make decisions but failed to make the right decisions far too many times during his last five years in office. Sad, but i speak the truth.
by TalRussell
leeza 11 years, 7 months ago
Tal do you have a problem with Hubert Alexander Ingraham being a lawyer/fisherman from Cooper's Town. If no then why are you always referring to him in that way both occupations are honest ones and if yes why and what. The man is no longer in active politics yet you cant let him be.
John 11 years, 7 months ago
While BTC may be a precious jewel in Cable and Wireless's crown what did this sale mean for Bahamians? Are we any better off havine C&W manage (or mismanage) the phone company? Has the service improved any, even just a little bit? What about the costs of BTC's products? Have they been reduced as was promised by C&W? And what about the several hundred Bahamians who used to make a living (or at least make ends meet) selling BTC's phone cards? What plan does C&W really have for them. Now that they have these poor folk selling phone cards on a margin where its impossible to break even much less make a profit what plan does C&W really have for them? This is what needs to be expose to the international scene more than any thing else. The fact that a multi-national company like Cable and Wireless can come into a country like thye Bahamas and force its citizens to subsidise the sale of its products, while the company BRAGS about doubling its profits in less than a year!
Sign in to comment
Or login with:
OpenID