The sale of the Barbados National Terminal Company Limited (BNTCL) is all but complete, with Government simply “waiting on the cheque” to consummate the deal, Minister of Finance Chris Sinckler revealed last night.
Neither Sinckler nor BNTCL General Manager Winston Gibbs would give details of the sale, but the minister disclosed that the transaction was in its final stages.
“We have sought to use a practical approach and we have said the ones that we feel can be sold like the Barbados National Terminal Company, we have sold it,” he said, before correcting himself.
“Well, we have proposed to sell it and it will be sold soon, I hope.”
Sinckler made the disclosure while delivering the third annual lecture of the Financial Services Commission (FSC) at the Grande Salle on the topic, Transforming Statutory Corporations in Barbados: A focus on FSC’s Development Five Years On.
As at 2013 there were 54 statutory corporations in operation here and the minister stressed that Government was keen on carrying out necessary statutory reforms while ensuring the social welfare of citizens was protected.
Government first announced plans to sell BNTCL in 2014, which was valued at more than $70 million at the time. He again implied that in addition to BNTLC, a subsidiary of the Barbados National Oil Company Limited, other statutory agencies would be put up for sale.
“We in the Ministry of Economic Affairs we are waiting on the cheque [for the BNTLC sale], but we had put in up for sale. You know, cross my heart and hope it will come through soon enough. But the ones that we can move and are appropriate to be moved will be moved. That is just simply a fact. But there are others, which I am not so absolutely certain that that kind of intervention will work. At least not at this stage,” said Sinckler.
Details of the sale of the Fairy Valley, Christ Church company remained unclear, including how much Government earned for it, the identities of the new investors and the impact on employment. However, based on the projected amount given in the recent Estimates presentation by Sinckler, Government has projected $75 million to $100 million, which one Government officisal said would help to boost the islands reserves.
Pressed for details, Sinckler repeated that Government was awaiting the cheque, while Gibbs sharply told Barbados TODAY he had no comments to make on the development.
In his January report, Governor of the Central Bank Dr DeLisle Worrell said while Government was on course to achieving its 2015/2016 financial year target of reducing the fiscal deficit to about four per cent of GDP, it depended on completion of the sale of the BNTCL.
The statutory agency was incorporated in 1998 to manage the importation and supply of gasoline, diesel and fuel oil, according to the company’s website, which also stated that the company provides storage for local crude oil to facilitate shipping to Trinidad.
The divestment of the BNTCL is part of the Freundel Stuart administration’s statutory reform programme that involves the amalgamation or sale of Government-owned entities in order to cut costs.
The Barbados Water Authority (BWA), the Sanitation Services Authority (SSA) and the Child Care Board are among those expected to feel the effect of the attempts to cut $1.2 billion in subsidies.
Sinckler said the administration had engaged the services of the Caribbean Regional Technical Assistance Centre (CARTAC) to examine the major root causes of the financial challenges facing some of these entities.
He said a new governance framework had been established for statutory organizations to ensure greater accountability, self-sufficiency, customer friendliness and financial viability.
The minister announced that five companies were included in the pilot phase of the CARTAC assistance programme – the Barbados Agricultural Management Company, Barbados Port Inc, the National Housing Corporation, the Queen Elizabeth Hospital and the Transport Board.
He did not say when the process started or what the results have been so far.
“We have been working with those entities both in terms of directly through the management accounting unit and through the division of economic affairs . . . to go in and improve their financial balance sheet, their reporting criteria, their collation and submission of statistics and building efficiency,” said Sinckler.
He said the move was necessary if Government were to cut its financing to those entities “whether by $100 million or $200 million.
“We need to either finance it or cut it altogether or we can do a combination of both,” Sinckler told the audience.
He disclosed that the second phase of the programme would involve Barbados Conference Services Limited, the Barbados Agricultural Marketing Development Company, the Barbados Investment and Development Corporation, the Caribbean Broadcasting Corporation and the National Conservation Commission.
And in phase three, he said, “we will be looking at [the Barbados] Water Authority, the Barbados Tourism Marketing Inc, the Sanitation Services Authority, the Child Care Board and of course, the Caves of Barbados”.
He said among the tasks to be carried out at these entities were the identification of external factors that impacted on their performance, risks and strategies to mitigate those risks and key performance indicators, as well as financial projections.
“And we have made them sign letters of expectations, which will form a contract between the board and the Ministry of Finance for key performance targets and financial guidelines set out in the statement of intent,” he said, adding that entities with expenditures in excess of $50 million per year would be required to establish audit committees as sub-committees of the boards of directors.