The Tribune

LAST week, Prime Minister Christie confirmed that his government had no intention of selling the public any part of government’s 49 per cent shares in Bahamas Telecommunications Company. He plans to keep all of the 49 per cent under government control, and continue to negotiate with Cable & Wireless for government to become the majority shareholder of the telecommunications company.

On May 4, a few days before the general election last year — then Prime Minister Ingraham announced that the $37 million public offering of nine per cent of government’s shares held in BTC would “soon” be sold to the public — that is if his party were re-elected to government.

Mr Ingraham said that the shares would be sold at the same price that government sold CWC its 51 per cent. Mr Ingraham recommended the shares to the public as a good investment.

However, the Ingraham government lost the election. Mr Christie’s PLP was now in the driver’s seat with the election promise that it would renegotiate the CWC contract, and regain the majority holding for the government.

The initial public sale (IPO) of nine per cent of the shares, which was expected to be held in June last year if the Ingraham government had won, was now up in the air.

“The IPO will at best be delayed, at worst cancelled,” commented Tribune Business editor Neil Hartnell at the time. On May 15, however — eight days after the PLP won the election — it was confirmed that the PLP “has committed to sell BTC shares to Bahamians, even though the details are again lacking”.

However, last week it was reported that Mr Christie had “reiterated government’s position” that it would not sell any shares to the public. In a short ten months after being elected, Mr Christie’s position had changed – although by last week’s statement he seemed to have forgotten that once upon a time in the far distant past he had confirmed otherwise.

Of course, with the sale of these shares government would have earned some cash – about $37 million – and its borrowing needs would have been less.

However, his position had not changed in his determination for his government to reclaim majority ownership of BTC.

In his budget presentation at the end of May last year, he stated: “We remain faithful to our commitment to explore all lawful means by which majority ownership of BTC can be restored to the Government and the Bahamian people.”

Although this was his election commitment, he obviously had not thought out the details of how this was to be done. It was only after the election that he proposed to discuss a strategy with his inner-circle. He was obviously relying on his well known charm to walk into Mr Tony Rice’s office and walk out with the shares. However, at the end of that meeting the most he could report was that his meeting with the CWC chief – who had flown in specially from London — was “very cordial.”

Mr Christie had saddled himself with an election promise that he should have known from the beginning he could not keep. He had talked so much of his intention to renegotiate any contract that the Ingraham government might make with Cable & Wireless that extra precautions were taken against this eventuality — the contract was as iron clad as the law would allow.

Mr Christie has now had to admit that his government cannot afford to buy back the shares. Its cash position is so tight that it cannot even afford to buy two per cent of the shares, which is all that would be needed to give it a majority. Nor could it afford to cover the penalty and potential litigation costs that were certain to follow if the contract were broken.

In August, Wall Street criticised the Christie government for its “erratic” policy, which was undermining this country’s investment climate.

Even Mr Franklyn Wilson, who heads the government’s negotiating committee, had to concede that the move to renegotiate the CWC contract could undermine investor confidence in the Bahamas and create uncertainty as to whether contracts would be honoured from administration to administration. There was “no doubt”, said Mr Wilson in August, that political risk was now being factored into the Bahamas’ investment decisions.

Mr Wilson admitted that if “handled badly”, investor perceptions of the Bahamas could be damaged. We hope that by now both Mr Christie and Mr Wilson have learned that when one goes to break a contract that the other side has no intention of agreeing to, there is no way that it can be handled other than badly.

We suggest that it is now time to draw the line, close the door and admit defeat. If any thought had been put into this — other than winning an election — such a suicidal venture would have never been undertaken.

Mr Christie has now announced that, subject to whatever advice he gets from his committee, he intends to appoint Leon Williams as the third member of the BTC board. Mr Christie then commented: “My sense was they did not want me to do that – that is Cable and Wireless — but in any event I have asked my negotiating team to show cause why I shouldn’t do that.”

Mr Williams is a member of the negotiating team to try and get the shares from CWC. We also understand that there might be some conflict of interest concerns with his appointment.

Mr Williams, former CEO of BTC, took legal action against the company when he was fired in 2008. At the time BTC chairman Julian Francis claimed that Mr Williams was incapable of properly managing the company, which was being prepared for privatisation.

However, Mr Christie cannot deny that under the management of CWC, government with its 49 per cent is earning far more than when it tried to manage 100 per cent of the company on its own.

Remember these shares belong to the Bahamian people. It is now time for government to settle down, stop trying to do something that it should have never embarked upon in the first place, and help prepare this company for the opening of a competitive market.

We suggest that these grown men go back to their childhood story of the greedy dog and learn how he lost his real bone when on seeing the reflection of it in the lake, he opened his jaws and lunged for the reflection. In the end, he had nothing.