business@tribunemedia.net
WEDNESDAY, AUGUST 11, 2021
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RUPERT ROBERTS
Super Value chief seeking to avoid ‘perfect storm’ By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net SUPER Value’s president yesterday said he was hoping to avoid the perfect storm of an earlier COVID curfew and potential hurricane if tropical depression ‘six’ becomes a major threat later this week. Rupert Roberts told Tribune Business he did not want to have to seek an extension to shopping hours to allow Bahamians to prepare for a major hurricane so soon after the government extended the curfews on New Providence and Grand Bahama by one hour to a 9pm start. “We’re having to watch the storm very carefully,” he said. “I hope we don’t come up with a hurricane threat by this Thursday and people haven’t shopped. We might have to go back to the Competent Authority and say: ‘Can we go back to 10pm because we’re being rushed and we’re not able to enforce social distancing. “We’re trying to head off a pandemic. We don’t want a hurricane and the pandemic. We don’t want them to combine. The competent authority [Prime Minister’s Office] has made their decision, and we hate to go back to them begging because of some unexpected incident.” While tropical depression six is ultimately forecast to become a storm, current weather models have it failing to gain hurricane strength when it moves south of The Bahamas between Thursday and Saturday. It is presently projected not to be a major threat to this nation. Mr Roberts, meanwhile, said Super Value will now close one hour earlier at 7pm in response to the earlier curfew so that staff have sufficient time to clean, stock up and get home by 9pm. He projected that the company would lose no sales despite the loss of six shopping hours per week, and added that the 13-store supermarket chain would open one hour earlier at 6pm if needed. “If it’s going to help kill the virus, anything to oblige to help the medical people,” Mr Roberts said of the earlier curfew. “We could have expected more measures, but we couldn’t figure out how we could have more without compromising social distancing. “Last time we had shorter hours we were really contributing to what we were trying to avoid. Now this wouldn’t be a problem. It was not surprising at all. Previously it was a 7pm curfew, and we had to close at 5pm. We’re glad it didn’t go to 7pm.” Describing travel warnings from the likes of the US and UK as “the big danger” if The Bahamas does not get its latest COVID outbreak under control, Mr Roberts said: “We have two problems. We get sick, and then of course we don’t have money to buy medicine or don’t have money to buy food. It destroys the economy. We have to behave now. We have no choice.” Ben Albury, Bahamas Bus and Truck’s general manager, told Tribune Business he saw “no
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Watchdog kept at bay on COVID contract owners
By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net
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HE government has failed to meet the auditor general’s demand to provide ownership details on all the companies awarded COVID-related contracts despite this being deemed “pivotal” to good governance. The revelation, contained in the Office of the Auditor General’s report on how the government used the proceeds from last June’s emergency $250m International Monetary Fund (IMF) loan that kept the country and government afloat during the pandemic’s peak, reveals its request for information on who beneficially owns these entities remains “pending”. The June 25, 2021, report tabled by speaker Halson Moultrie in the House of Assembly yesterday, confirmed that the auditor
AUDITOR GENERAL TERRANCE BASTIAN general and his staff were provided by the Minnis administration with a list of companies “that received payments for the delivery of goods and services related to COVID-19”. That list was not disclosed in the report, which suggested that the information made available by the
AN aviation industry executive yesterday warned the Nassau Airport Development Company’s (NAD) plan to levy a $28 fee on all arriving international private plane passengers was “a slippery slope”. Rick Gardner, director of CST Flight Services, which provides flight coordination and trip support services to the private aviation industry throughout the Caribbean and Latin America, told Tribune Business that the airport operator’s proposal was akin to “death by a thousand cuts”. A member of The Bahamas Civil Aviation Council as well as a Bahamas Flying Ambassador, he argued that general aviation or private plane traffic was often “singled out as easy prey” for fee increases whenever airports needed to
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• Flying Ambassador says $28 fee proposal ‘flawed’ • Warns charge ‘certainly won’t be well received’ • Others slam move as ‘discriminatory, drastic’
LYNDEN PINDLING INTERNATIONAL AIRPORT raise money. While conceding that he was still assessing NAD’s proposals, Mr Gardner said he feared the benchmarking exercise employed by the Lynden Pindling International Airport (LPIA) operator to justify the $28 (VAT inclusive) fee was “flawed for a number of reasons” including the aircraft chosen, although he
declined to go into further details. While NAD has justified the fee on the basis that private aviation passengers need to contribute their fair share to LPIA’s upgrades, and that it is needed to help finance $30m in improvements to pavements, lighting and other infrastructure, Mr Gardner said these persons typically used
By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net
Odyssey and Jet Aviation’s facilities rather than the airport’s commercial passenger terminals. And he pointed out that the greater amount of “wear and tear” inflicted on the LPIA’s runways was likely to come from heavier, faster commercial airlines rather than private jets. Mr Gardner said he planned to share his views on the proposed fee increase with the US Aviation Owners and Pilots Association, the largest grouping of its kind, for which he acts as their Bahamas representative. And he is not alone. Another prominent figure in Bahamian aviation, speaking on condition of anonymity, described the
law enforcement; and mitigating the risks associated with abuse of public funds, corruption and financial fraud.” The implication of all this is that The Bahamas still does not have complete transparency over the awarding of contracts to supply goods and services to the government despite the enactment of the Public Procurement Act, set to take effect on September 1, and accompanying reforms such as the Public Financial Management Act. While the names of winning bidders, and the reasons why they were selected, will be made public, it is still possible for politically-connected persons, family members/ relatives and others to set up
NAD’s private aviation levy ‘a slippery slope’
By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net
‘Catastrophe collision’: No COVID mitigation without IMF’s $250m
THE Bahamas would not have been able to finance the health, unemployment and business support measures to mitigate COVID-19’s fall-out without the IMF’s “emergency” $250m loan. The Office of the Auditor General, in a report tabled in the House of Assembly yesterday, revealed that the financial support from the International Monetary Fund (IMF) was critical to providing the government with sufficient cash to make it to the end of the 20192020 fiscal year following what it termed “a collision of catastrophes”. “The collision of both catastrophes, Dorian and COVID-19, put the Budget in a crisis, tax receipts going down and government payments increasing,” the report said. “The required $250m funding assisted in addressing the supply and demand shock, and having provision for the economic downturn. “Most importantly, the funding was vital in facilitating the urgent measures taken by The Bahamas with respect to socio-economic impact and public health resiliency..... The $250m was essential in providing budgetary support and sustaining the healthcare and mitigation measures in response to COVID-19.” The Office of the Auditor General’s report gives an insight into how close The Bahamas came to fiscal and economic calamity after the bulk of its tourism-led economy was shutdown in the early months of the COVID-19 pandemic by lockdowns and other associated restrictions. The report said the full effects of the fiscal impact on the government’s revenue took a while to show through, but peaked in June 2020 when VAT revenue collections plummeted by 77 percent year-over-year from $122.66m in 2019 to just $27.898m. That followed declines of 34 percent for April, when VAT revenues dropped year-over-year from $110.591m to $72.918m, and 52 percent in May 2020, when they fell from $74.436m to $35.847m.
• No govt response to auditor general request • Issue ‘pivotal’ to good use of public’s monies • Promise to IMF for $250m loan unfulfilled government fell some way short of the full transparency its internal financial watchdog was seeking. “Request was made for the beneficial ownership of these business entities. However, the same is pending,” the Office of the Auditor General said. However, it immediately referenced an IMF quote that stated: “Knowing who ultimately owns companies (their beneficial owners) is a key piece of data that allows governments and citizens to check that money is going where intended.” Drawing on this, the Office of the Auditor General said: “We note that beneficial ownership full disclosure plays a pivotal role in the good governance in governmental financial affairs with respect to transparency and accountability; integrity and
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Nearly $70m of IMF’s $250m went to SOEs By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net
GOVERNANCE reformers yesterday renewed demands for more transparency around state-owned enterprises (SOEs) after they collectively consumed $70m of last year’s $250m IMF loan to The Bahamas. Matt Aubry, the Organisation for Responsible Governance’s (ORG) executive director, told Tribune Business that the government needed to provide Bahamians with greater understanding of how it will move the likes of Bahamasair and Water & Sewerage to a sustainable “cost recovery” position given that $423m annual drain they impose on taxpayers. He spoke out after the Office of the Auditor General, in a report on how the government used the $250m “emergency loan” proceeds received from the International Monetary Fund (IMF) in June 2020, revealed that the greatest percentage - some 28 percent - was allocated to supporting SOEs. The greatest percentage
• $38m allocated to COVID healthcare • But also to prop up WSC, Bahamasair • Some SOEs breaking law on disclosure
MATT AUBRY of that sum, some $37.977 or 54 percent, went to a combination of the Public Hospitals Authority ($34.31m) and National Health Insurance Authority to help them cope with the demands imposed by the COVID-19 pandemic. However, much of the balance went to propping up loss-making SOEs. Some $7.925m of the IMF loan proceeds was disbursed to the Water & Sewerage Corporation, while another
$5.367m went to Bahamasair. With aviation all but shut down, the Airport Authority received $2.894m and the Bahamas Civil Aviation Authority a further $2.531m. Even Nassau Flight Services was the recipient of $669,000. The University of the Bahamas was issued some $6.35m, and the Bahamas Technical and Vocational Institute a further $1.277m. The Office of the Auditor General, though, pointed out that not all SOEs were complying with the legally mandated requirements of the Financial Administration and Audit (Amendment) Act 2020 to submit quarterly and financial reports to the government within 30 days of period end. “With respect to SOEs governance, we noted that improvement was warranted relative to timely submission of audited financial statements and
reporting to Parliament,” it said. “The SOEs are noncompliant with reporting in a timely fashion. “Non-compliance is a risk, and the implications include inadequate governance and accountability for efficiency; unavailability of pertinent financial data for decision-making; and the inability to rationalise, thus more funding could be provided than needed..... “Notably, within the Ministry of Finance, a ‘unit’ has been established to review the monthly and quarterly financial reporting of the SOEs. The reporting process has begun; however, all of the SOEs are not complying with the legislation. Compliance with this process is mandatory for effective decision-making and management of scarce resources.” Disclosing that the SOEs were reporting their financial data using manual means, the Office of the
Auditor General called for this to be converted to electronic with accounting and reporting management information software. Calling for the use of ‘Big Data Analytics’ and “reconciliation checks”, it called for such reports to be published on the government’s website once they are tabled in Parliament. Mr Aubry, meanwhile, said the amount of IMF loan funds that went to the non-health SOEs represented “a big red flag”. He added: “That’s not anything new in terms of having to prop those entities up, but they continue to under-perform and continue to suck up a lot of resources. “The government made a dictate that it will be pushing to achieve their sustainability and cost recovery but, unfortunately again, we’ve taken out a loan that we need to repay where a substantial amount has been used to pay other bills and prop these entities that are still not producing like they need to. “This process of getting
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