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Government 'Handcuffed' By Unused Leases

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

THE Deputy Prime Minister yesterday accused the former administration of "handcuffing" the Government by entering into multi-million dollar leases for property that has never been used.

K P Turnquest cited two cases where the Government owed between $13-$14 million for property leases and had "no exit clauses", even though "not one single government worker has ever set foot in the building".

He suggested that some of the $200 million-plus spending "overhang" inherited from the Christie administration could spawn legal action, as the Government sought to escape commitments that it had no use for.

"It is important not to lose sight of the onerous overhang commitments with which we still must deal going forward," Mr Turnquest told the House of Assembly in kicking-off the mid-year Budget debate. "Some are of a litigious nature.

"Some of the agreements we have met in place, we are seemingly hand-cuffed even though we have no need of the service, so we have to figure out how to equitably exit these arrangements the former government put us in. "We owe $13 million in one case, $14 million in another. But not one government worker ever set foot in the building. There's no exit clauses; the leases cannot be terminated. We have to pay it to the end. We're stuck."

Mr Turnquest said one building purportedly rented by the Government, yet which had never been used, was destroyed in a hurricane but under the "alleged" terms of the lease rent was still owing and payable.

"You wouldn't do it with your own money," the Deputy Prime Minister said of these and other contracts entered into by the former government. "No one would do it with their own money. It is evident that with these ongoing commitments we need to be doubly vigilant over the balance of the fiscal year to bring spending below Budget limits."

Mr Turnquest did not identify the buildings or contracts he was referring to, as he again blasted the Christie administration for placing "a massive noose around our citizens' necks" and those of future generations as a result of its unchecked 2017 pre-election spending.

While some observers are starting to urge the Government to focus on solutions, rather than keep dredging up the past, Mr Turnquest yesterday argued it was important to explain why the Minnis administration was facing such a strained fiscal position.

"The previous government engaged in a shameless and extravagant pre-election spending spree," he said. "That spree has left us with virtually untold millions in unpaid overhang commitments with which we must now deal. Indeed, their overhang is of an order of magnitude that may well be unprecedented."

Mr Turnquest added that this "overhang" of unpaid spending obligations already exceeds $200 million 'and counting', with another $4 million having "just popped up in the last couple of weeks".

The Minnis administration paid some $53.6 million during the 2017-2018 fiscal year's first half to settle unfunded obligations incurred in the prior period, including $13.2 million related to 573 transactions "across the breadth" of government. Some $3.8 million of this sum was used to pay Ministry of Finance bills, with $2.4 million and $2.1 million used to address sums owed by the Ministry of Foreign Affairs and Ministry of Public Service and National Insurance, respectively.

Other outstanding bills paid during the six months to end-December 2017 were $13 million owed to the Bahamas Telecommunications Company (BTC); $7.5 million to Sir Franklyn Wilson's Arawak Homes; $5.6 million for the Customs reform project; and $3.8 million for the Fox Hill Community Centre.

A further $10.5 million was settled using 'contingency warrants', but a further $150.1 million has either been paid - or remains to be paid - during the second half of the 2017-2018 fiscal year.

The biggest bill is some $63.3 million for National Health Insurance/the prescription drug programme, followed by $18.9 million owed to the cruise lines - presumably for departure tax rebates. A further $11.7 million is due for outstanding Public Hospitals Authority (PHA) operational commitments, with $11.4 million required for the Fox Hill Community Centre.

The three utilities - BTC, Bahamas Power & Light (BPL) and the Water & Sewerage Corporation - are all shown as being owed multi-million dollar sums by central government, with $17.7 million due to the Bank of the Bahamas for the Education Guarantee Fund.

Some $6.7 million is owed by a combination of Inland Revenue and Immigration to Canadian Bank Note, an outside vendor, with a further $3 million balance due Arawak Homes.

"This is but a smattering of the previous administration's destructive legacy," Mr Turnquest blasted. "It is hard to overstate what a profound administrative and management mess we inherited in the administration of our public finances and the oversight of public assets.

"The financial strain imposed on our children and grandchildren by the irresponsible fiscal management of the party opposite in its five years at the helm is of such gargantuan proportion that it verges on the immoral.

"It is for that very reason we cannot put it behind us and move on as if it had never occurred.... Repeating the fiscal travesty of the last administration must never, ever occur again, nor must it ever be allowed to occur again."

Comments

OMG 3 months, 2 weeks ago

Name the buildings so the public can see for themselves.

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bahamas12345 3 months, 2 weeks ago

i agree list the buildings, I'm sure the cost per square foot is higher than the norm

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birdiestrachan 3 months, 2 weeks ago

Poor visionless Turnquest will be singing this same song four years from now.

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Sickened 3 months, 2 weeks ago

If you don't name the buildings, the Lessor and the person who signed on behalf of the Government then I simply won't believe you. Name and shame!

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SP 3 months, 2 weeks ago

While PLP observers are starting to urge the Government to focus on solutions, rather than keep dredging up the past, Mr. Turnquest yesterday argued it was important to explain why the Minnis administration was facing such a strained fiscal position.

I totally agree with Mr. Turnquest.

Please continue to report to the people where our hard earned tax dollars disappeared to. We have a right to know why and who destroyed our country!

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DreamerX 3 months, 2 weeks ago

I won't tolerate it until they name all the relevant parties. They had no qualms naming certain executive contracts with Tourism and the Bridge Authority scenario, but they choose to exclude many of the other disclosures. Name them or you are playing the same game while blaming the prior admin.

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sheeprunner12 3 months, 2 weeks ago

Yes ........... name every friggin lease holder that the PLP engaged during 2012-17 .......... Let the People know where this "hangover" money is going and the PEPs who are getting fat off the backs of the poor people.

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birdiestrachan 3 months, 2 weeks ago

In one instance he said no one entered the buildings. Then he said a building was destroyed by hurricane. Mr: Turnquest should present facts. Remember the song where the VAT money gone? Then the found it. another story I believe he said it was 41 million they could not find. then they found it? Master full Lairs they all are. When will Turnquest and the FNM Government move on with the business of the country. and stop signing bad deals such as OBAN a year is almost gone.

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TheMadHatter 3 months, 2 weeks ago

SP - you are right, except he is not reporting, only babbling.

Bahamians should be shouting out a four letter word here, and it doesn't start with F or S - but instead it starts with J.

Only with this kind of reporting from KP the judge won't know who to send.

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Well_mudda_take_sic 3 months, 2 weeks ago

Repost: All cabinet ministers in the Minnis-led FNM government are just as crooked as the last Christie-led PLP government if they choose to honour rather than refute the validity of all crooked deals and contracts born out of glaring corruption that were wrongfully entered into by the former government, to the detriment of the Bahamian people. The current cabinet has unescapable collective responsibility for which we, the Bahamian people, will rightfully hold each and every one of them fully accountable!

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