by Garth Buckner (http:/www.weblogbahamas.com)
The following piece, first published in The Tribune, Letters, is reprinted here with the kind permission of the author.
Once again the news comes out that BEC is failing, that it spends more than it earns, that it is in debt and that it needs bailing out. Once more we are presented with two false choices; Government can let BEC raise its rates or Government can inject more public money into the failing corporation. These are false choices because they amount to the same thing; if BEC raises rates then the Bahamian consumer is forced to pay more, if Government injects more public money into BEC then the Bahamian taxpayer is forced to pay more and, in the final analysis, the Bahamian consumer and the Bahamian taxpayer are one and the same.
It is no longer a surprise to hear that BEC has failed once again. We have come to expect it and we all know why it happens. Despite BEC’s unjustly privileged position of holding a monopoly over us over the supply of electricity, despite it being able to supply intermittent service at astronomical prices, it continues to fail because it refuses to reform itself. At the end of the day BEC plays and we pay.
The solution is not to put up rates. These are already out of all proportion and justification. They are already a hammer blow to the cost of living and the cost of doing business. BEC already makes us poorer than we otherwise would be. They have soaked the Bahamian people for every cent and there is little left to squeeze. More public money is not the cure either. You cannot tax a people more who are already groaning under the present burden of high taxation, and you cannot pile more debt on the backs of our children when our credit is close to maxed out. Quite simply there is no more money.
Even if there were giving BEC more cash is simply a cop out. It allows failure to continue failing. What we need to do instead is take the action required to fix our electrical supply and pricing problems to move the country forward. We need a dependable electrical supply at a competitive rate. This would go a long way to making the Bahamas a more attractive place to invest by lowering the cost of business. It would also reduce the high burden of the cost of living with which our people must struggle every day.
Thankfully this can be achieved. The way forward is to divide BEC into two, a company that generates power and a second company that maintains the grid that delivers the power to our homes and business. We then allow others, assuming it is environmentally prudent to do so, such as the garbage collection companies who have already submitted proposals to generate power through burning refuse, or the LNG people who have also put forward proposals to generate power locally, plus other options such as tidal or wind power, to go ahead and do what they are ready, willing and able to do, namely; generate power in competition with BEC. This would boost the dependability of supply.
It would also mean a real choice for the people. Customers would be able to pick which power generator they want to sign up with and would pay the generator directly. The power generation companies would then pay for the maintenance of the grid. The consumer would now be in the driver’s seat. Competing suppliers would be forced to listen and adapt if they hoped to attracted market share and a great burden would fall from all our backs.
As with BTC such a process of privatization and deregulation would not only bring much needed financial relief to the people it would also mean a windfall to the Treasury, both through the sale of BEC and the licenses to operate the competing power generation companies. Government would also save many millions in taxpayer money and interest payments on debt by being freed from the burden of propping BEC up. As the cost of doing business falls the Bahamas will become more competitive and so more profitable, the economy will grow and Government will see an increase in jobs and revenue collection on the back end. Its been tried before and its been proved before. It works.
We did it with the Hotel Corporation. We did it with the radio stations. We’re doing it with BTC now and we must do it with BEC next. We need to end the shame and frustration we all feel at seeing BEC fail and instead have a reliable and cost effective market for electricity that will build our nation and for which we can all feel proud. It’s time to save BEC.
June 18, 2009
Yet another person coming to the realization that all must arrive at:
Our Government can run nothing well, if at all.
In addition, our government stifles those who can,
and rides on the backs of all regardless.
The redistribution of wealth under theological reasoning or fraudulent action results in a pillaged society.
The ratio of the “riders” v. the “producers” is killing our country, and we will all share the resulting misery.
I do believe on top of all the problems, BEC “Fixes” the meters to run faster in certain areas, just my belief.BEC should be the richest company in the Bahamas, talk about poor management !
I don’t think they are competent
enough to “fix” meters, but I don’t doubt that they don’t run correctly.
Most of these politically appointed or politically elected people couldn’t run a household competently, nevermind critical infrastructure.
These goofballs are spiraling out of control, so my main question is,
“who among us will clean up the mess?”
I think they do. I know a Haitian that runs wall unite A/C’s, a whole lot of other appliances & pays about $ 76.00 a month. I live in a middle class neighborhood,a simple family home.With everything in my house turned off I would pay more than that a month.I am sure, in my mind, they are “fixing” the meters
Hi Rick,
I think we bash government too much about the management of utilities, because we don’t get accurate and timely information on the private organizations that are ran poorly.
I think, rather than privatization, that government needs an entire new management system, based on business planning and proper policy guidelines for that planning.
Then, and only then, would we see progress in the regard of the management of ALL GOVERNMENT OWNED ENTITIES–from BEC to the Min of Tourism.
The government has made steps in this regard!
Best,
Youri
globalviewtoday.blogspot.com/
Thanks Youri:
We all live in hope and die in despair.
The BEC management would function differently if they worked in the private sector. Same people. Different environment.
Let me give you an example from my neck of the woods.
When I first entered the automotive industry over 20 years ago now, the industry had supplied the government with ideas on apprenticeship.
In fact, a complete syllabus was provided about 25 years ago for mechanics as technicians were known back then.
Of course it was never implemented.
We eventually designed our own internal programme.
They (BTVI) were given a car at point and all the modern diagnostic equipment at the time. I wonder if they can even find the car now.
There is another group of people now trying the same thing at the moment.
So where going on 30 years now and we’re still saying, all we need is another new management team.
When will see it’s not the people, it’s the system of government control?
Rick
Hi Rick,
That was pretty decent of you. No one ever really counts the efforts the private sector has made with regard to philanthropic endeavours.
As for the new management structure built on policy, you are preaching to the choir my friend.
I heard someone say just recently; “if it ain’t broke, don’t fix it”….my reply to that is, you only would know if it’s broken or not working properly, if you know of a better system that works.
He who has ears, let them hear…in this case, eyes to see!
Best,
Youri
globalviewtoday.blogspot.com/
Thanks Youri:
It is always very easy to judge people when we do not know them.
I’m not talking about a new BEC management structure. I’m talking about a privatised company where incentives are different and people are motivated by the desire to help their clients, not the political boss of the day.
Rick
Hi Rick,
I don’t know what your first sentence was supposed to mean, but in any event, the act of at least trying to help out, itself, was pretty decent and it should be commended.
As for BEC, from my position, it is a reflection of the management of the entire government service. As said, we don’t know how sloppy many private organizations world wide are, because we don’t have the information as to how many times they make huge mistakes.
Take for example anytime you work for a bank in the Bahamas, if you happen to have to be released for theft, the bank’s don’t announce that or it hardly is ever taken to court, because the banks don’t want the information out there that they are an easy target—or, that the target is soft on purpose, for other persons.
That my friend is one of the things about the private sector, it’s private. This is with special regard to private sector organizations, which don’t have multi-shareholder models. They don’t have to account for malfeasance if it is not illegal or just simply not within their interest.
That being said, allot of things need to be examined before privatization, in order for the regulatory agency, to hold private organizations into account for poor quality service.
I wrote a mighty fine article over at my blog, about the privatisation quagmire.
http://globalviewtoday.blogspot.com/2009/06/nationalisation-to-privatisation.html
Best,
Youri
http://globalviewtoday.blogspot.com/
Thanks again Youri:
The difference between private and so called public corporations is the consumer can take their business elsewhere in a competitive market.
State owned businesses usually block competition.
When I worked to CIBC we took people to Court for stealing.
However, the court system is so screwed up and some defense lawyers allowed to frustrate the process etc the plaintiff usually gives up as they cannot spare half the staff day in and day out while waiting for other people to show up etc.
More on the court system later.
Rick
Hi Rick,
I don’t know if you do this on purpose, but you tend to speak as if you are breaking new word to a novice. I don’t need a basic education on the merits of privatisation or nationalisation, unless you are putting up basic information for the average reader. What I would prefer is a lively conversation….which I know that you can provide without all of the mundane elementary information, which does make you come off as condescending.
That being said, there are allot of times where banks refuse to take people to court. In fact, times where large companies decide to settle out of court. It’s understandable!
You don’t have to go into the court system. We all can take a guess by the huge backlog, something is amiss.
Best,
Youri
http://globalviewtoday.blogspot.com/
Me condescending Youri? Please :0)
I can’t help it when you lead with your chin in support of government and government corporations the way you do.
Now what would you like to discuss?
Rick
H Rick,
You like to be a little cheeky, aye? I see. 😉
You act as if I am a fan of government utilities, which I am not. I lean on the side of common sense, however. And, the common sense wisdom is that every organization needs a tune up from time to time….
Best,
Youri
http://globalviewtoday.blogspot.com/
Sometimes Youri :0)
But is common sense government involvement?
Look at the track record.
At least with private business they come and go without burdening the taxpayer, until recent times.
Schumpeter’s “Creative Destruction”.
How many government entities have been privatised? We’re still awaiting the first one with BTC.
Hi Rick,
I don’t think anyone is in a sound position to argue otherwise, considering these times when companies are wanting subsidies and bailouts and are “too big to fail”.
In the case of America: would you have wanted a destroyed and crippled America? The answer would be no, considering the fact that the next world superpowers would have to do to lead the world; the EU, China and Russia.
That being said, there is a case for saving an industry if one can, for a stable economy.
Best,
Youri
http://globalviewtoday.blogspot.com/
Hi Youri:
It’s interesting that those companies that are “to big to fail” are still failing.
So as they go into bankruptcy will we have a crippled America? I’m not so sure about that.
Might this not be a necessary adjustment?
Why is there such limited discussion about the policies of Central Banks and their printing presses?
It is not only America facing these economic challenges and the worlds super power has changed a number of times throughout history.
Finally, they’ve “saved” these industries and the economy is still unstable.
What am I missing?
Hi Rick,
I think you are missing the bigger picture. The bigger picture being that they [the government] did not let all of the companies go bankrupt and innocent people, who had their money tied up in these companies as well as their lives, of no fault of their own, were left to lose it due to a messy and costly banruptcy if government did let it all go to the crapper. At least for the American case.
Also, the value and supply chains of GM was good enough reason to save GM. To save the bi-producers and consumers, was the best thing the government could have done considering the massive economic meltdown–a universally systemic meltdown. The financial crisis, had its effects on the industrial production of the worlds largets economies. No credit and no insurance.
Your remedy, would have been to let it all fail and start all over again–adjustment for the sake of conservative principle. Considering the long way human-economic understanding and development has come thus far, allowing it to fail when we could have staved off massive disaster, was a best all around case….it did not have to collapse on its ears all at once.
This was no ordinary adjustment, but an economic collapse not seen since the great depression, allbeit not as deep and severe as the Great Depression. You now why? Because the government and the private sector, came together to buffer the economy for the worst and brace it for the disaster.
That’s progress. Not some utopian dream of what would be ideally prime to have happen, because we would be ideologically satiated by it happening.
Best,
Youri
http://globalviewtoday.blogspot.com/
p.s.
The American case is no where near any realistic comparison to the Bahamian case for BEC.
Dear Youri:
Thanks again.
The bigger picture is the US Government has given all this money to these companies and they have still gone bankrupt, leaving the American taxpayer with even more debt to pay.
The supply chains for GM have already been hit and GM’s market share is projected to go from 60% in it’s hey day to possibly 10% in the coming months.
GM has been a great company and I am very upset to see these changes but I’m think a stronger company will emerge as a result of the bankruptcy. Not the bailout.
Conservative and Socialist principle was to bail them out, believing the bailout would preserve the status quo. And they have still gone into bankruptcy.
The Fed announced yesterday that a couple more smaller banks have gone into bankruptcy. I don’t hear of concern to help them?
Show me the massive disaster that has been staved off please.
Regretfully Youri, the utopian dream is to believe that there is not supposed to be economic change. Economic change is inevitable.
The Conservative and Socialist ideologues have been caught up in this. First Bush and now Obama.
You still haven’t answered who pays for it. Nor have you addressed the Central Banks policies of printing money hand over fist.
To paraphrase Arthur Seldon: The anticapitalist feeling is so strong because “there is a deep-rooted tendency to contrast capitalism as it is, with its failings exposed, (and often exaggerated), with an idealistic vision of a socialist society as it might be, but never has been nor ever could be.”
You see I don’t put as much faith in the government’s ability to do anything any better because they can print money, borrow and spend more than we can.
Interesting times.
Regards,
Rick
Hi Rick,
Your welcome. The matter with GM, was that it was known that it would go into bankruptcy– there was no question about that. However, had it had gone bankrupt on its own 6 months ago, would have meant more workers displaced, less productivity in the US. The supply chains have been hit, but they have not all gone out of business. The bail out, aided the bankruptcy to the extent that it kept the business going without it coming to a full stop.
I don’t think that considering the circumstance, if GM went into chapter eleven 2 years ago, would any of this intervention be an issue. But, it was due to the fact that now was the worse time, made it a no brainer to bail out GM.
I also don’t think that this bail out would have kept the status quo. One reason being that GM was forced to restructure. Second, new industry regulations on more efficient energy efficient cars as well as a restructured union contract, thirdly, is a good sign that the status quo has not been kept. Furthermore, the government would have to re-distrubute the shares it has to the private sector again…not to the same shareholders who had GM before.
As for paying for it, of course the tax payer paid for it. Me and you. With that, the top 20% who pays more than 70% of the taxes, paid for it with their own money they paid in taxes. Ironic as it is with them, paying the majority of the share of the tax burden, for those tax dollars to be used to bail out companies they mismanaged up.
As for the Central Bank printing money, it is what they are supposed to be doing. Managing inflation is secondary, as it relates to the actual demand for goods and how much that money can purchase those goods.
At this point in time in world history, a Central Bank that has not acted with strong market oriented policies, is a Central Bank that’s truly IS keeping the status quo. Goes for the Fed, BOE, COJ, CBC and the CBB. Why would Central Banking come up in a conversation about BEC with a tangent on GM, in any event?
I see the government as a partner of last resort. This, in the American case, is what it seems to be and it is working effectively. There is no way any American law maker is possibly thinking of keeping companies in their hands for an extended period of time…America is not designed that way.
Best,
Youri
http://globalviewtoday.blogspot.com/
Hi again Youri:
Looks like we must agree to disagree on this one.
The idea of the bailout money for GM was so it would not fail. That can’t be denied.
I think the bankruptcy should help GM get out from under those onerous union contracts and make them competitive with the other manufacturers, at least for the GM marques that survive (probably Chevrolet and Cadillac).
I’m saddened by the loss of a great company, but consumer preferences do dictate these things.
Economically it makes no sense for the government to continue to bailouts, deficits and loose money by the FED and other Central Banks at the expense of future generations and the risk of inflation and the devaluation of the currency.
It makes the climb out of the recession longer from what I have read about the history of the Great Depression.
In any event, these are interesting times.
Kind regards,
Hi Rick,
No problem. I don’t think we disagree, but have a perception about certain components of the issues and how that may or may not be important to us.
Also, as said, if this was 2-3 years ago, for GM, there would be no bail-out and they would have to go the way of Ford with Chapter 11. The true tragedy IS Ford Motors, who have restructured their company to now have to compete against a company that has US government help– subsidies.
Whether the subsidies bear fruit with regard to better more efficient cars remains to be seen. But, GM, as opposed to Lehman Bros., is still in business.
As for interesting times…nothing new is under the sun. Surprises are for the inexperienced and the anti-historians. If you look back, as I am sure you have Rick, there is nothing new about what’s going on today, from how it happened in 2004, as it happened post 2001-2002, as it happened in 1992, as it happened in the late 70’s and as it happened with the Great Depression. Just a different time in human development, with minor corrections to what we experienced the crisis before. We just have to deal with it and stick to common sense practice and principle, considering the time when, in all of those cases, government was active to ensure a better, more regulatory sensitive future for the private sector.
Best,
Youri
http://globalviewtoday.blogspot.com/