By NEIL HARTNELL
Tribune Business Editor
nhartnell@tribunemedia.net
Taxpayers will have spent an extra $50m to bail-out the Government's state-owned aviation entities by mid-June, a Cabinet minister revealed yesterday.
Dionisio D'Aguilar, minister of tourism and aviation, used the mid-year Budget debate to reveal the full extent of the COVID-19 devastation inflicted on Bahamasair and other aviation-related state-owned enterprises (SOEs) with more than $75m likely required to keep them afloat by the time the 2020-2021 fiscal year closes.
He revealed that this collective outlay was more than three times' the subsidy allocated to the national flag carrier, the Airport Authority and Nassau Flight Services back in May 2020, which will require an increasingly-squeezed taxpayer to pick up the bill for the unbudgeted $50m.
With the three SOEs collecting little to no revenue due to COVID-19 lockdowns and associated restrictions, and minimal travel and tourism since The Bahamas re-opened in November 2020, the $19m originally allocated to Bahamasair, plus the $5m for the Airport Authority and $1.5m for Nassau Flight Services, have simply been woefully inadequate to cover their costs.
To-date, Mr D'Aguilar said Bahamasair has required $49m in taxpayer subsidies to keep it in the air, with the Airport Authority consuming $8m and Nassau Flight Services a further $4.5m. This, he added, totals some $61.5m compared to the original collective full-year subsidy of $25.5m.
"Mr Speaker, the level of taxpayer support for these entities is already 2.4 times greater than what was budgeted and we still have three-and-a-half months to go until the end of the budget year," Mr D'Aguilar revealed.
"I estimate, Mr Speaker, that by year-end, these entities will have cost the taxpayer over $75m, which is three times more than what was budgeted. We budgeted $25m but will probably spend $75m - an extra $50m that the taxpayer has had to borrow to keep these companies afloat and everyone receiving their full pay.
"Mr Speaker, as you can see, these entities are costing the taxpayer a fortune so I respectively ask the employees of these companies to understand and appreciate the difficulties that the Treasury sometimes experiences when trying to fund these unbudgeted expenses."
Mr D'Aguilar then disclosed that upgrading all Family Island airports will cost $250m. The first four selected - Exuma, North Eleuthera, Abaco and Long Island - will account for $175m of this figure, with some $143m to be raised by RF Holdings (the former Royal Fidelity Merchant Bank & Trust). The $32m balance will come from an Inter-American Development Bank (IDB) loan.
As for Grand Bahama International Airport, Mr D'Aguilar said the Government was "on the cusp of acquiring" the Dorian-ravaged facility from Hutchison Whampoa and the Grand Bahama Port Authority (GBPA).
"The Government will purchase the property for a nominal price and establish a legal construct where they are not obligated to pay any amount to the Port Authority in fees," he added. "The Government will then hire a consultant to advise it on how best to redevelop that airport given the high probability of another weather event impacting that airport....
"Upon acquisition, the Government of The Bahamas plans to invest approximately $1.5m in capital improvements to the airport facility in the short-term, and then, after receiving a report from the consultants on the way forward, enter into a public-private partnership (PPP) to redevelop this airport."
Comments
TalRussell 3 years, 7 months ago
To-date, Bahamasair has required $49m in taxpayer subsidies to keep it in the air. In the air? Yes?
Clamshell 3 years, 7 months ago
... it is odd, Tal, as they don’t seem to spend much time “in the air.” Bahamasir is just another government-jobs scheme.
tribanon 3 years, 7 months ago
$1.75 billion ($1,750,000,000) of our national debt is attributable to our country's failed experiment with a national airline. And while many small nations have long ago cut their national airline losses by shutting down their national airline, including even developed countries like Switzerland, here we are still flushing millions of dollars annually down the proverbial toilet.
Doofas Minnis and Simpleton D'Aguilar should have seized the pandemic as the ideal opportunity to shut down Bahamasair once and for all. And Tommy 'T' should take the job of messenger/mail boy at his sister's law firm becuase it's about the only thing he's good for.
Dawes 3 years, 7 months ago
No one is flying as these stupid Covid Laws mean just travelling to Eleuthera from Nassau adds an extra $120 per person on. IF Government wanted to at least get Bahamians flying to family islands require a rapid test ($16). But no they want to keep us locked up on each island, whilst we watching the ultra wealthy travel as much as they want.
truetruebahamian 3 years, 7 months ago
A rapid antigen test should be all that is needed. The costs with rtPCR tests being necessary is far too high. These days getting home is unaffordable.
TalRussell 3 years, 7 months ago
Proof that despite the colony having spent billions on the construction of schools and staffing, still, what the young people brungs with them when entering into the workforce is much handicapped by years in a system that is learning inadequate.
Clamshell 3 years, 7 months ago
Here’s what they learn: If you can use political influence to get a job as a baggage handler, you’ll still get paid even if there is no baggage to handle.
TalRussell 3 years, 7 months ago
@Clamshell, what do you call a colony's airliner's, $26.88 per hour baggage handler...?
Clamshell 3 years, 7 months ago
That’s about $53K a year, plus tips. I’d call him ... lucky.
bogart 3 years, 7 months ago
Some dozen Caribbean countries have gone down the path and scrapped airlines like BWIA, Air Jamaica, Guyana Airways, LIAT etc. Continued propping up BahamasAirr is bizarre by such a well educated Businessman who came into politics should know better.
Continued massively hugely throwing millions of precious taxpayers tax dollars into BahamasAir....kknowingly stifles and kills the other Bahamian Air Transportation businesses and smothers any likelihood of survival.......... Bizarre keeping one Bahamas Air going until killing off dozens and dozens of BAhamians in the free market aircraft transportation industry with debts, loans, employees, plans for expansions, other routes. Govt should get the hell out of these businesses...unfairly competiting with its own entrepreneurs and now at this critical point...very intentionally doing actions ....eliminating them. Competition laws are needed.... !!!!!
Sign in to comment
OpenID