Short-term relief but long-term pain.
That was how the Barbados Integrity Movement (BIM) summarized the possible impact of the proposed deal between Government and regional petroleum giant Sol Group for the sale of the country’s lone oil terminal, the Barbados National Terminal Company Limited (BNTCL).
BIM leader Neil Holder said the sale could end up being detrimental to the Barbados economy, despite the anticipated US$100 million windfall that Government would receive.
The Fair Trading Commission (FTC) recently released details of the presumptive sale, that is already being met with staunch opposition from Rubis Caribbean which contended that the merger would create an oil storage monopoly that would diminish Rubis’ standing in the market.
While the Sol Group is led by Barbadian Sir Kiffin Simpson, information released on the FTC’s website revealed that the Sol Group would purchase the terminal through BNTCL Holdings Limited, incorporated on November 7 last year as a domestic company to the parent company, Sol St Lucia Limited.
Speaking Wednesday afternoon at a press conference at Divi Southwinds in Christ Church, Holder claimed the arrangement would result in protracted haemorrhaging of badly needed foreign exchange.
He argued that “BNTCL will be owned by an external corporation which will have to repatriate profits back to St Lucia in US dollars.”
The leader of the newly formed political movement suggested that the private oil storage monopoly created by the sale could also push up the cost of fuel to Barbadians, despite the fact that the agreement states that “the Government of Barbados through the Division of Energy will retain regulatory oversight and control the final pump price to the consumer. The Sol Group’s ownership of BNTCL does not allow it to determine final pricing to the consumer”.
It added that “any increase as it relates to the increase in throughput rates for the BNTCL services, will be absorbed by the Government through its cess mechanism and as such the consumer is not impacted by the proposed acquisition”.
However Holder is challenging Governments capacity to deliver its promise.
“With BNTCL possibly becoming the private storage, Government will have to apply certain taxes at the pump to recoup any increases applied by the BNTCL Holdings limited to make its operations profitable. How can Government assure Barbadians that fuel price will not escalate, as these assurances are worth nothing based on past experience?” he said.
In addition, the BIM spokesman accused the ruling Democratic Labour Party of not levelling with the public on the true cost of the BNTCL, as figures ranging from US$60 million to US$120 million had been bandied about since 2016.
“BIM needs to know what is the agreed purchase price, as this not clearly stated anywhere. The Fair Trading Commission could not provide BIM with the sale price, therefore we in turn can’t provide Barbadians with the sale price. The FTC is supposed to be investigating this matter but they are asking us to refer to the Central Bank report [of December 2016], which list the price at US$100 million.
“Barbadians cannot accept from the FTC that what they are doing could be fair and impartial if they are not operating with all of the information that they need and if they are not providing the public with the actual sale price ,” Holder contended.