January 30, 2013 at 5:54 p.m.

Gov't takeover of corporations could cost millions


By Nicholas Swan, guest columnist- | Comments: 0 | Leave a comment

Bermuda faces significant challenges. In the coming days, Bermudians will learn the extent to which our national debt has grown. While Government struggles to balance its budget, we face a real education crisis in Bermuda, housing shortages, personal security fears, and countless other problems. Too often, rather than being used to dealing with these challenges head on, our tax dollars are outsourced to foreign consultants who have no understanding of Bermuda. And just as often, we find that those tax dollars rarely come back to benefit Bermudians or our economy.

Understandably, many people have raised questions in recent weeks about Government's decision to spend $800,000 in taxpayers' funds on another group of foreign consultants, this time to assist in its plan to takeover the Corporations of Hamilton and St. George. You can't blame people for saying "Chingas, here we go again."

While $800,000 is certainly an eye-opening amount of money, that figure is sure to be just a down payment on a very risky venture that is likely to benefit foreign developers and favoured contractors as the City of Hamilton and the Town of St George gets carved up and sold off. The payout of taxpayer dollars is bound to be too much for Bermuda to bear.

The $800,000 figure is, by the Government's own accounts, simply to draft a report on how to best "reform" the Municipalities Act. Generations of Bermudians have had the necessary commitment, skill and drive to grow the City of Hamilton from an outpost in the 1700s to a major island city in 2010. It is sad to see that Minister Roban feels that the fate of the City and the Town of St. George is best left in the hands of a group of foreign consultants. The report, which many believe will simply tell the Minister what he wants to hear, is due in June, and Government has said that it will not necessarily share the report with the public.

However, in its Request for Proposal, Government made clear that its true goal is to take over the Corporations of Hamilton and St. George. Municipal takeovers are a costly endeavour, and that's when the real bills will begin to pile up.

Once the consultant's report is completed and Government begins its takeover efforts in earnest, complex parliamentary and legal manoeuvering will begin. By some estimates, the inevitable legal battle will result in combined legal fees alone which could cost more than $3 million. Taxpayers are likely to foot that bill.

While there are some examples of successful public-private partnerships that benefit the public, the wholesale selling off of public services and assets to the highest bidder is not always as beneficial. One need not look too hard to find examples of the burden it can create for taxpayers; beginning with Berkeley.

Can we really afford more of this in Bermuda?

This is not even to mention the non-monetary costs that the Government's takeover scheme will have on our community.

For example, what is the cost to the economic security of our families whose jobs would suddenly be in question? Already Government's takeover plans have caused great uncertainty as employees wonder whether their jobs are at risk.

The Corporation of Hamilton has more than 130 employees. All but three are Bermudian. Government has argued that the takeover is justified because it would be more efficient to absorb city operations into existing government departments, avoiding duplication. If this rationale is to be believed, then jobs will be lost at a time when no one can afford to lose their job. And what about the union workers? If the real game is about selling off the City to private interests, union workers could suddenly find themselves out of work.

What is the cost to our country of abdicating our local sovereignty to a group of foreign consultants, and asking them to determine the destiny of Hamilton and St George's? The thought that any group of foreigners would determine what is best for Bermuda, is insulting, to say the least.

And what is the cost to our community when, rather than work to expand voting rights so that more people have a voice, we are suddenly faced with the real possibility of the elimination of local voting rights? We should be working to give more people a greater voice in their communities, not taking that voice away.

So while $800,000 in taxpayer funds is a large sum of money, we Bermudians need to ask: "What will be the eventual cost - and can we truly afford it?"

Nicholas Swan is a Corporation of Hamilton councillor.

The original version of this column, which appeared in Friday's paper, suggested that consultants McKenna Long & Aldridge (MLA), who are working with the Bermuda government on the review of the Hamilton and St. George's corporations, hired a former U.S. official who facilitated the transfer of detainees from Guantanamo Bay to Bermuda.

In fact, neither the official nor MLA assisted Premier Dr. Ewart Brown in relation to the acceptance of the four Chinese Uyghurs. The official had no involvement in MLA being retained by government to advise on the corporations and these two matters are not linked to one another.

Also, we should make it clear that MLA is not providing legal advice in respect of the review.

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