Barbados Port Inc., operator of the Bridgetown Port, is under attack for selling and then hiring the same tugs for more than their sale price in the long run, and wasting millions on a questionable architectural design project.
Opposition Shadow Minister of Tourism Ronald Toppin levelled the accusations during his contribution to the 2015/2016 Budget debate last night.
Toppin spoke of “pretty rotten” dealings with the Port’s two tugs, and suggested electioneering as the reason for the design project, carried out just before the last general elections.
Toppin said that earlier in this year when people were struggling to pay their bills, “the Minister of Tourism called upon all of us to pay increased fees and charges to do business at [the Bridgetown Port]”.
But in labeling those new port charges unfair, he went on to allege what resembles a pennywise and pound foolish transaction carried out by the state-run company under authority of the Minister of Tourism.
“The Barbados Port sold two tugs for BDS$8.6 million to an overseas operator. Then the same Port turned around and leased back the same tugs from the same people that they sold them to for the sum of US$3,600 per day . . . BDS$7,200 per day.”
Toppin said the lease agreement was for 15 years.
“A lot of people don’t even see $7,200 in a year but the Port . . . can lease back tugs for $7,200 per day. This was sanctioned by the Minister of Tourism.”
He multiplied the daily rental by the number of days of one year and noted that for 15 years the lease equals $39.4 million.
“It is a dry lease. It is not that the Port sold all the tugs and transferred all the headaches to the new owners,” he said, explaining that despite the lease, the Port remained saddled with “all the maintenance costs, the labour costs when the tugs go on dry dock.
“So add all of these to the near $40 million and see what it comes to over 15 years.
“That is over 40 million reasons why people have to pay for health care, can’t get money from the Welfare Department, and now why they have to pay more land tax.”
According to Toppin, the Minister of Tourism said he had “gone into this arrangement because you won’t have to worry about buying a new tug down the road for $30 million”.
But the Barbados Labour Member of Parliament for St Michael North said: “I don’t know how the Port could sell two tugs for $8 million and [is] now saying that down the road they would have to buy one for $30 million. But the Port is going to be spending well over $40 million . . . down the same road that the Minister spoke about.”
Toppin charged that Government “made sure on the year before election, they got a . . . payment out of the port to an individual”.
He said: “In 2012, a very significant year when election money had to be secured, the Port made sure that it made a payment of [US] $10 million as its portion, to a friend of the Democratic Labour Party –– at least at the time.
“US$10 million as its share of the cost of having design work done in relation to a project that was supposed to consist of a whole lot of fancy, piers, hotels, new terminal, a whole island, all fancy stuff –– a project of which a study done had said its economic viability had not been established, but they spend $250 million.
Describing that design project as “a total waste of time”, he said: “To this date the project has not got off the ground, and I doubt it ever will.
“Twenty million more reasons we are going to have to pay university fees, increase VAT on food and a tax for using mobile cellphones.”