Rick Lowe

There are some rumblings in the blogosphere and press about keeping BTC Bahamian, and to be honest, I'm not sure why these points are being made at this stage of the game.

Certainly there's merit in offering shares to the Bahamian public, but to keep the status quo where the PLP and FNM have burdened the hard workers at BTC with their cronies is absurd.

There's also the argument that the utility company is a cash cow for the government. This might be so, but successive governments have burdened taxpayers with what amounts to over $4 Billion dollars in debt, and in a very tough world economy, I submit that the country needs the Foreign Direct Investment for BTC, and any where else for that matter, to help keep the financial boat of The Bahamas afloat, without devaluing the currency and taking more drastic taxation measures.

And we sure can't blame anyone but ourselves for the mess.

So we can all get on our lobbying horses to keep BTC Bahamian, but is that really what's best for "all" Bahamians?

I don't think so.

Back in 1997 Dr. Alvin Rabushka delivered this speech, entitled Privatization In The Bahamas, to The Bahamas Chamber of Commerce.

Here's what he had to say about BTC specifically. As you read it, please bear in mind this was over 13 years ago, and today's financial mess the country is in helps illuminate the problems he outlines even more:

Bahamas Telecommunications Corporation (Batelco)

The most frequently voiced criticisms of all the public corporations were directed at Batelco.

Critics charge Batelco with high cost, poor quality, deficient service, and serving too much as a welfare program for its employees.

No individual with whom I spoke (the number exceeds 100) uttered positive remarks.

Indeed, members of the financial services sector uniformly expressed concern that The Bahamas risks losing business to other offshore financial centers unless Batelco service and price competitiveness improve dramatically.

As of 1995, the most recent financial statement for Batelco was for the year ended December 1993.

The balance sheet shows $133.2 million in net assets and liabilities.

The most revealing figure appears under "current assets":

$67.9 million in accounts receivable and prepayments.

This exceeds by $17 million the sum of $50.5 million in accounts payable and accrued liabilities.

The net assets consist of $100 million in Bahamas Government ordinary stock (public debt) and $31 million in statutory reserve (along with $2.2 million in deferred income).

Operating revenues of $130.7 million in 1993, an increase of $10.4 million over 1992, were generated by $29.3 million in local service, $93.8 million in toll service, and $7.6 million in other charges.

The toll service receipts accounted for $7.3 million of the increased operating revenues in 1993.

The most serious complaint directed at Batelco is the high cost of long distance service, and to protect that revenue source the Parliament has outlawed call-back services.

Operating expenses consisted of $59.1 million for plant, $34.4 million for administrative charges, $19.6 million for depreciation, and $6.3 million for personnel and training.

Operating profit in 1993 was $10.9 million, compared with a loss of $983,000 in 1992.

The change was attributable to a rise in operating revenues, largely toll services, with no increase in operating expenses.

Of accounts receivable, $7.1 million was due from government corporations and agencies, an improvement over the higher figure of $14.4 million in 1992.

However, total customer accounts outstanding rose from $44.8 million to just under $51 million.

Of the $50.5 million in accounts payable and accrued liabilities, some $19.9 million is the employee pension fund deficit (which explains the less than enthusiastic employee support for privatization), $9.9 million in security deposits (it-s not Batelco-s money), and $16.7 million in trade payables.

Batelco, like BEC and other public entities, needs to do a better a job of collecting its bills.

The absence of an annual report makes it difficult to itemize growth of revenues, employees, return on equity, etc.

Of course few of us know what the current state of BTC really is so some of this information could be better or could be worse. And even if nothings changed, that's catastrophic for a company in the technology business.