In late March the Tenders Commission announced its short list of bidders for a 49 percent interest in the Bahamas Telecommunications Company (BTC). The list included three competing groups…Bahama Tel, Blue Telecommunications and Trans World Telecom. As reported in the media each group was made up of Bahamian private investors, a foreign telecommunications company and possible foreign investors. Each group wanted to become the strategic partner with the Government in a joint venture where the Government retained the controlling equity interest.

The MIT Dictionary of Modern Economics, Fourth Edition, defines “privatization” as “the policy of converting public ownership of an asset to private ownership.” The Tenders Commission appears limited in choice to an alternative that is not even “half way” privatization. The purpose of privatization is to get politics out of the business decisions of a critical business, a goal not realized with the present plan.

The fact is the track record of the Bahamian Government in business management is deplorable. Under its management and control the Government for years had a BTC workforce at least three times what was needed; and the quality of service provided and its cost were unacceptable. The reason for this poor record is that political considerations dominated the management process; providing good customer service at a reasonable price and making a profit were not the “name of the game.” This was so even though good telecommunications has always been important in the offshore finance industry and essential for e-commerce.

Also….

� The poor service of the Post Office is legendary. This is a business that has been government owned world-wide for generations. In recent times the greatest advances in technology have been in the field of communication…yet none of these have originated in the world’s postal services. The Bahamas Post Office is no exception.

� The Bahamas Electricity Corporation sells electricity at twice the cost of the more developed countries of the world and very substantially above what it should cost even after allowing for its smaller scale of operations. Air conditioning is an essential ingredient in year-around tourism and this industry is now handicapped by very high electricity costs.

� The record of Bahamasair was examined in detail by the last Commission of Inquiry. Yet the repeated promises of reform have not been realized but have been frustrated consistently by political interference.

Some have made the case that mismanagement of the utilities and government services has made the country non-competitive in the Global Economy; it has helped create a “high operating cost” environment for business enterprise. Unfortunately, that appears to be the case.

Seemingly the country has not learned from this experience. In this light the maintenance of government control of the new telecommunications enterprise should be viewed with great skepticism by citizens, businessmen and prospective investors alike. The Government should tell its citizens why it is selling only 49% of BTC; it should say why it wants the “appearance” of privatization rather than its “substance”.

And…it would serve the interests of the PLP to require the Tenders Commission to fill this information void well before announcing its choice because the decision is so critical to economic growth and job creation.