What did we get?
Prime Minister Perry Christie and his Progressive Liberal Party (PLP) have come a long way since those campaign days when they sought to demonize Cable & Wireless Communications (CWC) over its purchase of 51 percent of the stake in the Bahamas Telecommunications Company (BTC).
The harshness of the ‘buyer beware warning’ to CWC issued by then opposition leader Christie in 2011, has been replaced by a softened approach.
Christie said last Wednesday that the discussions that culminated in a new agreement with CWC for the transfer of two percent of its shares to the Bahamian people “were carried out with the utmost cordiality and on a completely voluntary basis, without threat or compulsion on either side”.
The prime minister advised that he has developed a rapport and understanding with new CWC CEO Phil Bentley and former CEO Tony Rice that augers well for future mutually beneficial relations between the government and CWC.
Speaking of CWC on Wednesday, Christie’s chief negotiator, businessman Franklyn Wilson, said the company was found to be trustworthy.
Perhaps it is this quality that endeared the former administration to CWC.
The opposition PLP had another impression of the foreign entity that is still today the majority shareholder and the controller of BTC, which had been an important state asset.
Speaking of CWC at a mini-convention in Grand Bahama on January 30, 2011, Christie said, “We do not believe that it is a trustworthy, reliable and capable strategic partner for The Bahamas and BTC.”
He announced that should the PLP be returned to power it would “aggressively explore lawful ways and means” to reacquire the majority interest in BTC for the Bahamian people.
Saddled by a series of missteps, broken campaign promises and growing discontent in some quarters, Christie and his administration last week hit what they — and some others — viewed as a home run.
But while Christie called the new deal between the government and CWC a “win win”, many others viewed it as evidence that the prime minister had spent the past 20 months on an effort that proved to be a charade, and is now seeking to dupe the Bahamian people into believing that he has fulfilled a key campaign promise.
While critics still have a wide open field to attack the prime minister over the deal, Christie has managed to seal an arrangement that has also won him goodwill among some Bahamians.
To be clear, the new agreement announced by the prime minister last week does not square with the tone of PLP language in the lead up to the 2012 general election.
Saying at a PLP rally on May 2, 2012 that it is time to “believe in Bahamians”, Christie used the BTC sale as evidence that former Prime Minister Hubert Ingraham and the Free National Movement did not believe in Bahamians.
“You raised your voices up loud and strong on BTC,” he told a sea of supporters.
“And he (Ingraham) ignored you like he always does. He told you Bahamians need not apply.
“He sold control of a key national strategic asset to foreign control. Our position was different.
“We made it clear that majority control and ultimate control would have to remain with the Bahamian people; Only a minority stake could be sold to foreigners.”
Indeed, We were made to believe that the Bahamian people would get a firmer hold on the company. We did not.
What we got is a formalized commitment by CWC for the funding of community projects.
That is a good thing.
Christie and his team are grateful, and no doubt relieved, for what they were able to get.
In the words of government negotiator Sean McWeeney, it is not a perfect deal.
But it is a deal nonetheless.
“Is it a perfect deal? Of course it isn’t,” McWeeney told National Review, “but I think in terms of what were the available options, I think that this really represents the best that was obtainable from a practical standpoint in the circumstances.”
The government now says that its intention in the take back talks was never about control.
But the tone of its message on this issue in opposition pointed in the strongest possible terms to once again securing control for the Bahamian people.
It is what many voters believed the PLP would do.
And it is easy to see why they believed this.
Not long after the Ingraham administration signed the highly controversial deal with CWC on April 6, 2011, the PLP released a statement saying, “We do not support it. We repeat that under a PLP administration BTC will be back in Bahamian hands.”
BTC is not now back in Bahamian hands.
Money for community projects and worthy civic causes is a good thing. But no one should be fooled into believing the government or the Bahamian people will have any control over the company with the newly acquired non-voting shares.
They will not.
Under the new arrangement, nothing materially has changed for the Bahamian people and BTC, according to some observers.
In fact, the true test of the deal might not come for quite some time.
If the dividends promised from the shares that will go into a special trust for the Bahamian people turn out to be a windfall, then that is good for The Bahamas because any funding for social, civic and charitable causes is welcomed.
Amid confusion over whether the new deal is a cleverly crafted way to direct what BTC is already giving into a foundation, the company yesterday clarified this point.
“We have plans as a company to maintain our substantial civic investments in youth, sports and culture, with focus this year on inner-city programs and public spaces,” said Geoff Houston, BTC’s CEO.
“As always, we will continue to evaluate all community, cultural and other sponsorship on a case by case basis, but there will be no diminution in our contribution to The Bahamas.”
He said the new BTC Foundation will mean more attention and resources are made available to worthy community and civic interests.
There is no doubting that in Christie’s view, and the opinion of many others, the announcement on Wednesday was one of the better moments of the challenged and at times tumultuous second term thus far.
With the cameras rolling, and with the new CEO of CWC at his side, Christie announced what he said was “an historic agreement under which the majority economic interest in BTC will once again rest with the Bahamian people”.
Under the deal, CWC will transfer 5,093,200 of its shares in BTC back to the government for placement in a foundation that will hold these shares in trust for the Bahamian people.
The shares represent just under two percent of CWC’s share equity in BTC.
Christie announced that the income from the reacquired shares will not be going into the Consolidated Fund but instead will be held separate and apart by the foundation so as to ensure that the money will be used for permitted purposes.
As has been widely reported, the money will fund expanding access to telecommunications technology for Bahamians; sporting development and the fight against crime.
So while the Bahamian people and the government will have no control of BTC, they will get some money to fund worthy charitable and civic causes.
That cannot be dismissed as “nothing”. But to characterize the new agreement between the government and CWC as a major victory for Christie and his administration is a bit of an exaggeration.
On another note, the announcement by Christie that CWC will collaborate with the Broadcasting Corporation of The Bahamas (BCB) “with a view to assisting in the integration of technologies and other collaborative strategies” needs further explanation.
It has left many wondering whether there is the intention for CWC to eventually have some ownership in the BCB.
This has not been said, but Christie’s announcement has raised some questions.
It is unfortunate that the prime minister did not take questions at the end of his announcement last Wednesday.
If he stands by the deal and wishes others to accept that it was a significant achievement, he should have been sufficiently knowledgeable of the agreement and confident in it to answer questions and defend the government’s actions and statements — including his party’s stated positions in opposition.
We assume that at the next sitting of the House of Assembly on Wednesday he will table the full agreements connected to announcement on Wednesday.
The outcome of the protracted talks was surprising even for those who welcomed it as a victory for Christie.
Again, the reacquired shares from CWC for the Bahamian people will not be going into the Consolidated Fund, but instead will be held by a foundation, Christie announced.
This outcome was equally surprising for those who had predicted CWC would be unflinching in coming to any arrangement to restructure its original deal with the government.
Christie cleverly escaped all out humiliation in the deal he reached with Cable & Wireless, whose purchase of a majority stake in BTC in 2011 fueled a firestorm.
That sale led to a high level of disaffection among many Bahamians, and some pundits opined that it was a major reason why Hubert Ingraham and the Free National Movement were rejected at the polls in 2012.
Christie has not had to face the nation and announce that CWC has failed to budge.
Instead, he and his negotiators came to the best deal they could.
Christie had established early on in the process that the government could not afford to buy back two percent of the shares sold to CWC.
CWC, we are told, fought hard to have its monopoly extended, but in the end reached an agreement with the government to “establish a charitable foundation dedicated to investing in projects for the benefit of Bahamians”.
The company said the foundation will be funded through the contribution by CWC of a two percent economic interest in BTC.
The two percent share holding will not be entitled to any voting rights and therefore CWC will regain majority voting rights in BTC as well as remain the largest overall shareholder.
CWC will also maintain management and board control of the business, and as a consequence continue to consolidate BTC’s financial results.
Christie is right in saying the deal was a ‘win win’.
CWC remains in charge. Christie has averted a political disaster. The Bahamian people get money for worthy causes.
The prime minister warned CWC in 2011 that if it followed through on its deal with the government of The Bahamas it would have a “rough road ahead”.
The language Christie used in relation to the BTC deal was some of the strongest of his entire political career.
In the end, he deserves some credit.
He has been courageous enough to follow through on an important campaign promise — no matter how outlandish that promise was he pursued a result and achieved something.
It is a much smaller pie than he ordered, but it is still something.
The PLP stuck to its belief that the Ingraham deal was a “stink” deal. It said BTC went at a fire sale price.
At the time of the sale, the Ingraham administration said it received the purchase price of $210 million for CWC paid in full, as well as in kind, and cash completion dividends from BTC amounting to $14.3 million.
Today, the Bahamian people and the government are major shareholders in BTC. They are not majority shareholders, but they still own an important stake in the company.
Although control of the company is not in Bahamian hands, it is in our interest that the company functions successfully in a liberalized environment.
The debate over what Christie has or has not been able to achieve will likely continue for another few weeks.
It will then fade. Liberalization will be upon us. At that point, whether BTC is prepared for that eventuality will remain an important national concern.
• See more stories in National Review for varied views on the new BTC deal.