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Commentary: Privatisation and Bermuda
Published on March 26, 2014 Email To Friend    Print Version

By Lawrence Scott MP

Privatisation has lately been pushed as the new cure all for everything that ails Bermuda. If you listen to the OBA, you would believe that privatisation is the best thing since sliced bread. However, history has shown that, before you believe OBA promises, one should dig deeper, research and determine the truth for yourself.

On privatisation, the OBA says, “We will have to obtain expertise from other jurisdictions, most notably the UK and Canada, which have experience in this regard…” [OBA Budget Statement 2014]

The OBA is correct. Canada and the UK do have expertise on privatisation. Various studies and reports have found that in their countries it led to:

• Job losses
• Slashed salaries and benefits
• Increased direct cost to taxpayers
• Reduction in service quality
• Reduction in safety and environmental standards
• Increases in corruption

So what does this have to do with Bermuda?

lawrence_scott.jpg
Lawrence Scott is a graduate of the Gilbert Institute and Bermuda Institute and the Florida Air Academy High School. He attended Embry Riddle Aeronautical University and Lynn University where he received a Bachelor of Science in Business Administration and a BSc. in Aviation Management and Flight Training. He is the Progressive Labour Party (PLP) representative for Warwick South East in Bermuda.
Under the OBA, one of the most profitable arms of government is first on the chopping block for privatisation; the airport. Under the OBA not only would airport workers likely see their salaries, benefits and jobs cut, but:

Government would lose control over the setting of landing fees, a tool that has not only generated revenue for Bermuda, but one that has also been used to attract and retain airline service. That would change in the hands of a private company and could change to Bermuda’s detriment as the focus would move to what benefits the company as opposed to what benefits Bermuda.

Government would lose direct control over the specific legal requirements for security demanded to maintain our pre-customs clearance. Today, government insures that the US government has no concerns about our ability to meet and even exceed their rigorous demands that ensure Bermuda is not a vulnerable point of entry into their country. A business might find it more profitable that they cut corners and place our pre-customs clearance benefit at risk if it insured that their profits would grow.

For most of my adult life I have worked at the airport. I see the talent and the expertise that our Bermudians possess, and I see the value they are bringing to their roles. To me these aren’t just numbers on a page; these are mothers, fathers, family and friends who have performed their jobs well, you can see the results, as it is one of the safest and one of the most profitable arms of government.

That’s why we suggest the creation of an Airport Authority that would:

• Maintain operational and price setting controls
• Insure that the airport is financially self sufficient
• Possess its own checks and balances via Civil Aviation which would remain under government
• Have the ability to seek loans to create a new facility.

Based off of their projected revenue of approximately US$13 million per annum, after you factor in landing fees, office space and vendor rents, parking fees and implementation of the Bermuda Air Navigation Service, we could:

• Have our new airport
• Airport workers can keep their jobs
• Provide the shot in the arm that our economy needs NOW in terms of jobs for construction workers.

While for the next 30-35 years approximately 68 cents of every dollar of revenue generated from the airport, approximately 8.8 million per year, would go directly back into our economy, instead of $0.00 dollars being injected into our economy under the proposal favoured by the OBA.

It has been said that, “if the only tool you have is a hammer, than every problem looks like a nail.” Bermuda has a wealth of ideas and options beyond privatisation to achieve a Bermuda that works for all of us.

I encourage Bermudians to explore the wealth of options available and together encourage and work with our government to do what is best for all
 
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