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'Runaway Train' Soes: Govt Must Take Control

DEPUTY Prime Minister Peter Turnquest.

DEPUTY Prime Minister Peter Turnquest.

By Natario McKenzie

Tribune Business Reporter

nmckenzie@tribunemedia.net

THE Bahamas must get its state-owned enterprises (SOEs) “under control”, the Deputy Prime Minister is demanding, saying: “They have been running like a runaway train.”

K Peter Turnquest, who addressed the Eleuthera Business Outlook conference as the keynote speaker, said: “The reality is we have to get our state-owned enterprises under control. They have been running like a runway train.

“They have been used to bulk up employment and place people who may not be competitive in other fields or endeavours, and that is a very destructive practice. Not only are you chewing up revenue but you’re also creating an inefficient environment which permeates out into society, and the public has to pay through inefficient service and increased taxation.”

Mr Turnquest said the Minnis administration is seeking to create an improved governance structure around SOEs to ensure their efficiency. “We are in the process of contracting a consultancy to look at these SOEs and make some recommendations as to how we ought to adjust the governance structure and legislation,” he added. 

“We may need to put the legal structures around that. That will mean that the qualifications for some people on these boards will be more defined so there will be less room for political appointments because we need professional management, efficiency and people who know what they are doing. Part of the legislative mandate will be around board appointments and management appointments.”

The Government, in its nine-month “fiscal snapshot”, unveiled plans to create a State-Owned Enterprises Bill that will introduce “the same kind of accountability and discipline” to SOEs that the Minnis administration is currently implementing with central government.

The Government’s 2018-2019 budget listed some $398.294m in subsidies allocated to SOEs and agencies for the 2018-2019 fiscal year, down slightly from the prior year’s $410m. The bulk of this sum, some $216m or more than 50 percent, was due to the Public Hospitals Authority (PHA) to cover its operational costs.

The usual loss-making suspects, such as Bahamasair, the Broadcasting Corporation of The Bahamas, Nassau Flight Services and the Hotel Corporation were also included among these subsidies, continuing their reliance on Bahamian taxpayers to underwrite their existence.

Besides these SOEs, other perennial loss-makers such as Bahamas Power & Light (BPL) and the Water and Sewerage Corporation also fall into the category of SOEs that fail to recover their costs. Both are selling their services below cost, with the latter having not seen a tariff rise for two decades.

Mr Turnquest, meanwhile, said the Minnis administration plans to use the fiscal head room created by eliminating $360m in outstanding arears to help absorb the anticipated revenue losses associated with tariff reductions under World Trade Organisation (WTO) accession.

“In 2017-2018 we put forward a three-year fiscal strategy, and the results up to the nine months are showing that we are making progress towards achieving the intended results,” he added.

“One of the things we are proud of is we are starting to pay down all of these massive arrears we have accumulated over the years. This year we had anticipated paying down $172m. We have paid $113m thus far and we will see how far we can get depending on cash flow for the remainder of the year.

“This is important because, as we liquidate these arrears, we free up cash we can spend on others things - whether it’s in reduction of taxes or whether it’s investment in other productive infrastructure to help us grow this economy and provide the kinds of services Bahamians deserve.”

Speaking to the pending WTO accession, Mr Turnquest said: “In respect to revenue losses anticipated as a result of tariff reductions that will accompany any WTO concessions, we have already planned that into our three-year strategy.

“As we pay down these arrears it frees up some room to absorb these revenue losses that we anticipate will come as a result of having to reduce tariffs at the border, and doing that without any tax increases but more management of the revenue yield and compliance as well as continuing to be watchful of our overall fiscal policies.” 

Comments

BMW 4 months ago

You mean runaway gravy train! Need more like Adrian Gibson.

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bogart 4 months ago

CONTRARY........hmmmmmmm....DA GUBBERMINT ......LEADERS OF DA VERY SAME GUBBERMINT....ELECTED TO BE IN POWER.....PASSING BUDGETS...GOVT AN OPPOSITION....vigorously debating erry penny in budget.....to hand out to erry Agencies........needin money.......ARGUING ERRY LINE ITEM......OF DERE OWN CALCULATED BUDGET.......IN PARLIAMENT.....IN FRONT OF CAMERAS......CANNOT CANNOT......BE STATING .....THEY...GOVT.MUST TAKE CONTROL......WHEN THEY ARE ALREADY IN CONTROL.......!!!!!!!!....if dey aint in Parliament in right mind...not drunk..... accounting skills.....adding up...subtracting up..adding more pore taxpayers taxes...to...very same RUNAWAY AGENCIES SUBVENTIONS.....iffin if dey demselves calculate add subtract and prop up agencies .............it only demselves to blame ........

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Economist 4 months ago

We need another Norman Solomon who can read through the Budget and really debate it.

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Well_mudda_take_sic 4 months ago

This arse Turnquest is talking as if our out-of-control state-owned enterprises is news for all of us to hear about. Where in the hell has he been for the past 30+ years??!! Two full years in office as Minister of Finance and he has done diddly squat about the problem except give it plently of lip service. What a baffoon!

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sheeprunner12 4 months ago

What can Turnquest do with the SOEs????????? ......... It is political suicide for any Bahamian Government to dissolve the SOEs ...... Just remember Ingraham & BaTelCo in 1999 ............. The people must FIRST come to realize that the country/Govt must wean itself off these SOEs for all of us to progress. But WTO will solve that problem soon.

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Well_mudda_take_sic 4 months ago

Foolishly joining WTO would have all Bahamians become subservient to their new Red Chinese masters.

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bogart 4 months ago

MANY EXAMPLES OF DISSOLVING.....REDUCING...ELIMINATING.....like the Hotel Corp.now shell...cutting out Double dipping pension an re-employed for govt salary..Removing Baback.employ as 2......cutting out NIB and salary double benefit.....Eliminating recent reconstruction agency......start mentioned about turning in govt vehicle emd of day...Education Minister no pay persons didnt show up....Minister Security strip searching to stop contrabands getting in prison.....Scott standing his grounds in Lucayan to save nations money...Health Duane Sands turning around resolving devades old issues....Agriculture Foulkes breaking mold an selling produce all around......Adrian Gibson pruning wastages.gaining nations admiration an gratitude......couple cases in works ...Ministers challenging subdivision costs......works underway to eradicate shanty......govt has MINISTERS...some wid guts to go for jugular ...no nonsense....after decades of rot....ya gatta like some hammering da hell outta WRONGDOINGS....malfeseance...misfesance...nonfeseance....aforementioned guys fight......some others....weeelll....

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