Opinion Column: Lawrence Scott On Privatization
[Opinion column written by PLP MP Lawrence Scott]
Privatization has lately been pushed as the new cure all for everything that ails Bermuda. If you listen to the OBA you would believe that privatization is the best thing since sliced bread, but history has shown that to before you believe OBA promises, one should dig deeper, research and determine the truth for yourself.
On privatization 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 privatization. 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?
Under the OBA one of the most profitable arms of government is first on the chopping block for privatization; 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 insure 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 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 and 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 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 favored 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 privatization 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
- Lawrence Scott
The PLP privatised huge parts of the Civil Service.
They just did it by hiring an army of “consultants” who were nothing more than non-unionised Civil Servants.
They also handed contracts to friends and family to do things that the Civil Service should be doing (emissions testing, ahem).
Please provide a set of financials for the airport. I’m curious how profitable it is…you claim very. If you are wrong, I expect you to resign.
With the amount of posting that you do. Did you not read the SAGE report???
Read it..can’t remember every single detail
So Scott never came back to explain his errors in his opinion .
Typical PLP.
“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 privatization 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”
Well, please elaborate on what the PLP plans to do??
And further more, why is is that these editorials from PLP MP’s do nothing in the way of offering solutions, and rather pick a particular recent hottopic about the OBA, and (to quote yourself Mr. Scott) hammer away at it??
He did give a good suggestion with the ‘Airport Athority’. This one one of the better more humbling articles from the PLP.
bumbling
True, but if the Airport is as profitable as Scott says it is, then:
1) Wy is the issue of privatization even being bought up by the OBA and
2) Again, if the PLP think ithe DAB is so profitable, then why an Airport Authority?
Why does everything have to be an outright attack?
Why are they constantly on the offense?
It’s really draining.
Mike i guess your memory is very short but when the OBA/UBP was in opposition they done the exact same thing. Also, if you set your partisan beliefs aside MP Scott makes an important point. Why is the government trying to privatize a department of government that is generating revenues when we all know that revenue generation is something we need right now. Who does privatization serve at the end of the day, because if you really care about Bermuda this would make you ask some questions? Why does the government intend to give away our money? Why do they want to weaken a revenue stream even more than it already is?
No. They didn’t. Not at all.
That is an outright lie.
Show me where they said anything remotely like “…but history has shown that to before you believe OBA promises, one should dig deeper, research and determine the truth for yourself.” and said it as often.
And then read the rest of this thread where the gentleman in question is debunked.
My memory isn’t short… but yours seems to be made up of complete fabrications.
It’s YOUR partisan beliefs that are the problem here. Not mine.
Take the blinders off and stop rewriting history.
Mike nobody is rewriting history I’m just stating a fact. Also, mike I’m just an observer I could care less who’s party is in power for whatever period and I take a good idea or a bad idea at its face value regardless who’s mouth it is coming from. Individuals like you who live in your political partisan bubble providing no real insight into any conversation except from emotional rebuttal are what take away from our system and that’s real. Because I have been reading your blogs and if the OBA said (and I’m using this as an example) “we are calling knees elbows” you would agree without a second thought, but if the same words came from the PLP you would swear up and down they are the stupidest individuals alive. So, no I could care less who’s in power as long as they are benefiting the people of Bermuda! In my personal opinion the idea of giving away a profitable department to the private sector does not benefit anyone when you’re trying to balance our national budget. Mike my point is ask some questions guy instead of being a useless blogger.
We have asked questions…waiting for Scott to admit his schoolboy errors.
Again with the false, baseless accusations!
Nothing you’re accusing me of is true!
In fact, your final sentence (and the fact that you completely ignored my post) shows that you are, in fact, lying when you say that you “have been reading my blogs” (I haven’t blogged in years. What you’ve been reading are my replies on a news site), because A. an anti-PLP bias – based on an observation of their behaviours over the years – is as close as I get to partisanship. However, when the actual PLP has a good point, I have been known to support them wholeheartedly. THAT, sir, is a fact. and B. All I ever seem to do on here is ask questions! In fact, you lot have taken me to task time and again for only asking questions!
It’s interesting that, not only do you not address ANY of my points and change the subject to something else, after lying about equivalence, you also show ABSOLUTELY no evidence of your claims that “when the OBA/UBP was in opposition they done the exact same thing” and, in fact, did the usual thing that my initial post was about. You went on the attack, slinging mud, hoping it’ll stick.
Guess what? It won’t.
You wanna know why?
Because it’s all a lie. All of it.
PLEASE do better. Try honesty. Try integrity. Try to show some respect.
In FACT, my initial post, that you responded to, was two questions and a statement!
Do better.
Is he implying that the $8.8 million that goes back into our economy will pay for a new Airport??? No wonder he is a plp member that writes columns of nonsense for the plp!!! Typical scaremongering and plp voodoo economics!!!!
I also find it interesting that the plp only criticize but never offer a solution????
“revenue of approximately 13 million per annum”
What is the net income for the airport (i.e. revenue does not take into account expenses)? According to the SAGE report the airport loses approximately $9.5mn per year with revenues being circa $10.3mn and expenses of $19.8mn per annum. If SAGE was wrong why hasn’t Mr. Lawrence rebutted these figures when the report was first issued?
Also, the SAGE report notes that the airport already “outsources a large number of its key functions”. So privatization has already taken place over the past few years regarding airport operations. The report also notes that the department “has also given high-level consideration to privatization opportunities, including a proposal for a public/private structure which could potentially fund the reconstruction of its current facility.” So why didn’t Mr. Lawrence and the PLP make some noise about these facts (guess it was because they were the ones doing the outsourcing)?
Why exactly would an airport authority need to be created if airport operations are working so wonderfully as of now? Such a proposal makes no sense at all especially given the PLP’s disdain for the Tourism Authority.
And it would be great if the PLP would provide the studies that Mr. Lawrence referred to regarding the pitfalls of privatization. Sources are key when making regurgitating these so called “facts.”
So please, Mr. Lawrence, clarify the actual financial position of the airport operations, why you feel the need for an Airport Authority if all is so rosy and profitable at the airport and why you didn’t register any objection to past privatization/outsourcing of various airport operations of the last few years?
The Sage report, on page 83, notes that the Civil Aviation, which falls under the Ministry of Economic Development, registered a $13 million profit.
While on page 80 the stats noted in my above post are related to the Airport Operations (which falls under Min. of Tourism & Transport).
It appears that Civil Aviation is not part of the money losing Airport Operations referenced above and that they make their money off of the aircraft registry. Am I correct?
So was Mr. Lawrence being intentionally misleading with the above article? Or did he misspeak and meant to address the recommendations to the Civil Aviation department as opposed to the Airport Operations department.
I followed Mr. Lawrence’s advice and dug deeper and this is what I found. Please clarify.
Mr Scott ????? Come on your public is asking
I’m sure that someone who has “worked most of [his] adult life” at the airport would have at least some understanding of the different civil aviation and airport operations business models, no?
If he does than he’s purposely obfuscating the facts for political gain. If he doesn’t than what has he actually learned while working at the airport all these years and what qualifies him to even speak on these matters?
Either way this opinion piece has created more questions than answers.
Ah, facts. So inconvinient to spin.
Privatisation has NEVER been called a “cure-all” for all of Bermuda’s ills.
Come on, Lawrence, you know that is a 100% un-truth on your part.
Why can’t the PLP join the 21st Century?
“Bermuda has a wealth of ideas and options beyond privatization to achieve a Bermuda that works for all of us.”
Still waiting for the PLP to list them.
Its very simple Laurie
(1) the previous govt. borrowed billions against our good financial record
(2) there was no plan to repay the borrowed funds (irresponsible)
(3) the OBA were elected because the majority of us understand #1 & #2
(4) the OBA have considered all options, with privatization being the only alternative to continued borrowing
(5) If you are an efficient and effective CS, you will make it in the private sector
(6) If you listen to Laurie and his crew, you won’t make it
“…..but history has shown that to before you believe OBA promises, one should dig deeper, research and determine the truth for yourself”.
The OBA is too young to have a ‘history’. 14 years of PLP mismanagement, however, is more than enough history for a lifetime.
How quickly we forget…. Mr Scott talks of a ‘new’ airport. Wasn’t that long ago that the PLP was talking of a ‘new airport’ – the one in Somerset!!! lol
Oh you remember that one too do you? I could name the highly respected PLP member, God rest his soul, who stood up in the House & seriously advocated having an airport at the west end, Dockyard as a matter of fact, “in case the weather is bad at the east end”.
With hair brained ideas like that is it any wonder that the 14 year PLP experiment was such a miserable failure?
Well the issue is CONTRACTS according to the honorable member Marc Bean. That is the truth. Nobody wants a piece of the pie that can’t make them money. Shawn Crockwell is selling the airport off to whom? Who will be the principles eating up the profit. Will they be Bermudians and if so who? Will they be foreigners if so what bidding process is in place and what securities do Bermudians have in the new deal? Scott makes a lot of sense here. Why give up the only goose that is laying eggs? Unless there is a cash incentive for someone in the process…I hope that no political consultants and friends of the OBA don’t show up with their hands out offering help while getting payback for great sacrifices.
I would dissenfranchise , maintenance details to maintain equipment ,and vehicles could well see another shift of fresh faces,to get value for dollar,rather than tired worn out regulars extending their hours at double time and producing tired worn out work,six day is enough,you become unproductive after 50 hours.The value diminishes…So…in this way..it could be applied without adverse consequence….what do you think?
Every one should be entiteled to a “GOVERMENT” JOB.
Then we would have “NO UNEMPLOYMENT”
What a wonderfull “IDEA”
And what do we do with the HUGE DEBT of $2.324Billiondollars.