Former Governor of the Central Bank Dr DeLisle Worrell has put the issue of privatization squarely back on the table for national discussion.
In his just released August newsletter, Worrell, a respected economist, specifically suggested that leasing of the Bridgetown Port and the Grantley Adams International Airport “to carefully chosen major operators of similar facilities worldwide” was “the most consequential” divestment option available to the two-month-old Mia Mottley-led Government.
“It provides Government with a dependable source of income; it secures major international investment, an ongoing priority for Barbados; and it opens entirely new markets and lines of business,” said Worrell, while pointing out that operation of ports and airports by private firms was now commonplace in advanced countries.
“Heathrow, the busiest airport in all of Europe, has been owned since 2006 by Heathrow Airport Holdings, a private company. All told, we have here an opportunity to lift overall economic growth by perhaps as much as one per cent per year, with the associated job creation and access to a global network of possibilities. It is an opportunity our Government should not pass up,” he said.
Worrell’s suggestion is by no means new, since as far as the 2013 general election there was talk within the then parliamentary Opposition Barbados Labour Party (BLP) of selling off both the air and seaports.
However, the issue proved back then to be as divisive as it became impractical, with former prime minister Owen Arthur subsequently suggesting that the BLP was “stampeded” by Mottley in 2013, who he claimed went before Parliament without reference to her colleagues with an election position on the issue.
“We heard for the first time on the floor of the House that the [Barbados] Labour Party was going to sell the airport and the seaport and then we also heard that the Labour Party would have taken the Transport Board and the sanitation authority and either sold or given the trucks to the men to run,” Arthur told Barbados TODAY in a subsequent interview in which he strongly suggested that the privatization proposal may have cost the BLP the 2013 election.
However, with Mottley now at the helm of Government after leading the BLP to a resounding victory in the May 24 poll, it is Worrell that has raised the issue again of privatizing the air and seaports – a proposal which has also been made by President of the Caribbean Development Bank Dr Warren Smith – while pointing out that “Barbados has geographical, political and business advantages which could make it an attractive node in the global network of an international transportation company.
“Barbados is the easternmost Caribbean island, historically the primary terminus of seaborne trade between Western Europe and the Caribbean, and between Western Africa and the Caribbean. Now the widening of the Panama Canal opens the possibility of links through the canal to the Pacific,” the economist said.
He further calculated that with access to the Pacific from Europe, Africa and Eastern North and South America becoming increasingly important in a world economy that is tilting towards Asia, “Barbados is also geographically positioned to be a fulcrum between North and South America.
“Logistically, the island seems natural for air transport links between the Americas [and] the potential for air freight would appear to offer an opportunity for substantial new business, an opportunity which has not previously been recognized”.
However, the former Governor, who was fired back in February 2017 at the height of policy disagreement with the then Freundel Stuart led administration, cautioned that “major investment would be needed to realize the economic potential of the island’s air and sea ports.
“This investment is far beyond the capacity of the Barbados Government, now and in the foreseeable future [but] leasing to major international companies would address all the challenges to realizing the economic potential of our port and airport,” he said.
“The operator would not only bring business through its global network, far beyond anything that the Barbados Government could attract on its own; but would have access to its own sources of financing, something which is important to a Government which has lost access to international financial markets,” Worrell added.
“For a suitably chosen international company, the investment in raising Barbados’ facilities to an internationally competitive standard would not stretch their financial and technical resources.
“An international company would transform the operations of both port and airport, bringing their efficiency up to par with those in advanced countries,” Worrell said.
“As with other global leaders, such as Sandals, a competitive international company would help to raise the bar nationally, in terms of excellence and staff engagement with the organization [and] as with other international companies in Barbados such as the Hilton, employment with such a company offers opportunities for advancement through a worldwide network. This opens opportunities to Barbadians far beyond anything that the Barbados Government could offer,” he added.
However, Worrell said “the key to realizing the potential of leasing the port and airport is a careful selection process, by knowledgeable professionals.
“Applicants should be major international players with proven track records. Their proposals should be reviewed by recognized experts [and] the public should be satisfied that the process of approval and implementation is openly and efficiently handled,” he added.