Major energy shift

BNOCL could be next to go

If Minister of Finance Chris Sinckler were to follow to a ‘t’ the advice that has been given to him by the recently appointed Fiscal Deficit Committee of the Social Partnership, Government would not only be selling off the Barbados National Terminal Company Limited (BNTCL), but its energy parent – the Barbados National Oil Co. Limited (BNOCL) — as well as the National Petroleum Corporation (NPC), the statutory body responsible for managing the distribution of the country’s natural gas supply.

Barbados TODAY has obtained a copy of the tripartite committee’s 30-page report, which addresses frontally the need for divestment and reform of state-owned enterprises (SOEs) as a means of realizing savings, including on subventions and transfers in the amount of $250 million.

The report also endorses the recommendations of a recent PriceWaterhouseCoopers (PwC) study on SOEs and recommends immediate implementation of its approach to reform of 57 state agencies, including BNTCL, whose planned sale to the Sir Kyffin Simpson-led Sol group is currently the subject of litigation, as well a Fair Trading Commission investigation.

Earlier this month, the High Court granted an interim injunction to Sol’s competitor Rubis, stopping the controversial multimillion dollar sale of the oil terminal in its tracks and throwing a spanner in the works of Government’s plan to beef up the dwindling foreign exchange reserves, which had fallen to a 14-year low of 10.3 weeks of import cover as of the end of last year.

Rubis had lodged an application for a judicial review, challenging the inclusion of a 15-year moratorium clause in the agreement between Government and Sol for the US$100 million merger, which the FTC is currently probing to determine whether or not it should be approved.

The clause prohibits the construction of another oil terminal in Barbados, as well as the granting of licences for the storage of fuel, aviation fuel and jet fuel for the commercial and industrial purposes.

After the international ratings agency Standard & Poor’s had downgraded Barbados from B- to CCC+ last month, Minister of Finance Chris Sinckler had said he was confident the FTC would approve the sale which, when taken with a draw down which was expected from the Sam Lord’s Castle development project and a First Citizens bank loan, would return the reserves to “well above” the desired 12 weeks of imports.

With the BNTCL matter still tied up in court, it remains to be seen whether Government would be prepared to start the process of selling off either BNOCL or NPC at this time, or whether it might not be better to look elsewhere for opportunities for divestment, given the significant implications for the energy sector and the country as a whole.

The PwC study also recommends the sale of the Barbados Cane Industry Corporation; Barbados Conference Services Limited; Southern Meats Limited, Caribbean Airways International Limited; Hotel & Resorts Limited; Needhams Point Development Inc and Needham’s Point Holdings Limited.

But while there has been much talk late of getting rid of the loss-making Caribbean Broadcasting Corporation, the most that is contemplated for the state-broadcaster at this stage is partial divestment.

In its report presented back in February, PwC, which carried out its study under the auspices of the Central Bank, also recommended partial divestment of the Barbados Port Inc, Grantley Adams Airport Inc and Caribbean Aircraft Handling.

The report also suggested merger of several SOEs, namely Fund Access with the Enterprise Growth Fund; the Barbados Agricultural Management Company with the Barbados Agricultural Development and Marketing Corporation; the Rural and Urban Commissions; the Barbados Community College with its hospitality school, Erdiston and the Samuel Jackman Prescod Polytechnic; the TVET & Vocational Training Board; and the Barbados Tourism Investment Inc with the Barbados Investment and Development Corporation and Invest Barbados.

The report also recommends that the Barbados Transport Authority, the Barbados Water Authority, Caves of Barbados Limited, the Gymnasium Limited, Kensington Oval Management Inc, the National Housing Corporation and the Transport Board be made to optimize effficiency and recover all costs by way of fees.

It also said that all other SOEs, including the state-run Queen Elizabeth Hospital and the Sanitation Service Authority should optimize costs and service delivery.
kaymarjordan@barbadostoday.bb

7 Responses to Major energy shift

  1. Peter April 22, 2017 at 12:24 am

    This deal with SOL nis about to backfire. There are new breakthroughs in green energy. A brand new product called Perovskite when applied like a sheet of film on solar panels causes the panels to produce a lot more energy and so researchers are able to harness lots more electricity from this very cheap and abundantly available product at a low rate of 30 to 40 cents per sq. Meter. Down from around $100.oo when voltaic applications first began. Electric powered are now rising in use with Germany having over 200,ooo electric vehicles in use, There are special booster charging stations being set up with vehicles carrying two and three spare batteries that lasts for around 5 hours each. So oil costs will no doubt be affected. SOL wouldn’t mind Rubis getting a slice of what will be a rotten pie now. Watch and see.

    Reply
  2. Greengiant April 22, 2017 at 4:53 am

    Then let Sol sell shares to Rubis. After our environmental experience with both Exon Mobil and Shell we should never place our petroleum industry in the hands of another foreign company.

    Reply
  3. Milli Watt April 22, 2017 at 8:56 am

    it warms me cockles to know that people who are not elected got say in how this country will go forward. I am going to sleep much better knowing my future is in the hands of a bunch a self serving, inept negrocrats who are concerned that the millions they got salt way in BDS currency will have no value because their is no USD because they lick out all. The question I got is who private sector tape worm going buy loss making entities and even if they buy them the first cut will be labour after that they are clueless about what to do. we end up with increased unemployment and an entity that has to be bailed out later at you guessed it TAX PAYERS EXPENSE.

    Reply
  4. Alex Alleyne April 22, 2017 at 10:08 am

    In the deal in should be written that SOL & RUBIS sell shares to the public of Barbados.
    Give the people of BIM a say and piece of the pie. “IT’S ABOUT TIME”.

    Reply
    • Peter April 22, 2017 at 11:58 am

      Yeah. then the shares dfrop and their share values are wotyh Zilch and they will expect the government to repay them at purchasing value.

      Reply
  5. Donild Trimp April 22, 2017 at 2:26 pm

    Barbados Cane Industry Corporation; Barbados Conference Services Limited; Southern Meats Limited, Caribbean Airways International Limited; Needhams Point Development Inc and Needham’s Point Holdings Limited.

    the Barbados Transport Authority, the Barbados Water Authority, , the Gymnasium Limited, Kensington Oval Management Inc, the National Housing Corporation. the Transport Board

    ALL OF THE ABOVE MUST GO ASAP.

    Should hold on to “Hotel & Resorts Limited” and “Caves of Barbados Limited” a bit longer.

    Reply
  6. Ann Thomas April 22, 2017 at 4:34 pm

    If Minister Sinckler ignores this advice, I would agree with him completely.

    For years this lazy, risk averse, dull. largely wholesalers and retailers, that pose as a private sector, have wanted to get their hands on ready made businesses that they only have to do a little adjustment here and there to make profitable. Which of them has actually had an innovative thought and started something different from scratch. Who of them ain’t inherit, manage somebody else’s business and now dispensing advice like gurus

    To think that this country has been reduced to seeking advice from them is sad, sad, sad.

    Social partnership or not, the people of Barbados only voted for one of the partners and that is those who make up the Government, so think long and hard before accepting this advice.

    Reply

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