'How we could save millions'

WEDNESDAY, FEB. 29: Privatizing some Government services has been cited as a way to save taxpayers’ millions and streamline the Civil Service.

The notion was raised at a Budget breakfast on Monday and backed yesterday by Peter Everson, chairman of the Bermuda Chamber of Commerce Economic Committee.

Unions would resist but a spokesman for Premier Paula Cox last night appeared to not rule out privatization or public-private partnerships in some form.

A spokesman said: “Government is always looking to create efficiencies and is prepared to consider partnering with the private sector on issues that are in the national economic interest.”

Peter Everson said: “It’s a no-brainer — the economics are so overwhelming, it’s surprising it didn’t happen 20 years ago.”

Mr Everson said Government would get a cash injection from selling off services — and be able to transfer huge pension liabilities to the private sector, along with workers.

He added that the Chamber was putting together some “basic data” to allow the public to see the advantages of selling of public sector services like the bus and ferry services, the Post Office and the airport.

Mr Everson said that the civil service pension plan was 32 per cent funded in March this year – compared to the average public sector pension pot funding of 73.6 per cent in the US.

He added: “That’s why we need to get a lot of people off the Government payroll and into the private sector.”

But Bermuda Public Services Union president Kevin Grant countered that privatizing services could mean poorer pay and pension provision for workers, lead to reduced or more expensive services and even lead to the loss of trades union rights altogether.

A spokesman for the Premier told us: “As part of the Medium Term Expenditure Framework, efficiency reviews will take place in all Ministries to improve service delivery and get the best value for taxpayer’s dollars.”

Mr Everson said the average cost of a Government worker was $113,600 a year when pensions and other benefits are taken into account.

And he quoted Chamber of Commerce figures from December last year, that showed the Post Office earned $5.4 million, but cost $15 million to run. The ferry service took in $1.3 million, but cost $7.6 million, while the bus service raised $7.9 million, but cost $18.4 million to run. (An updated figures from Friday’s Budget show that the bus service costs $20.9m)

Mr Everson was speaking after Digicel CEO Wayne Caines told a post-Budget breakfast meeting at the Hamilton Princess on Monday that Bermuda needed to look at privatising some public services.

Efficient

Mr Caines said afterwards: “We have to look at ways of making the Civil Service more efficient — I don’t know enough about it to say if it could be smaller, but if it can be smaller then we should look at that.

“We should have a look at privatizing things – but there cannot be public discourse about cutting jobs in the Civil Service without retraining them in other jobs.

“The airport, bus services, ferry services, they’re all opportunities, huge opportunities, for privatization.”

But Mr Grant hit back: “Any time that there’s an issue that may concern the privatization of workers’ jobs, we’d automatically be concerned.

“There have been campaigns against privatization in a number of countries and that’s been going on for a long time.”

He added: “Workers in privatized industries, especially women workers, have found that they are paid less and the conditions of employment are worse.

“Government has to ensure that that services are properly regulated and that workers’ rights are protected.

“People can always say we can go ahead and start privatization, but there needs to be more research done before we start going down that road.”

He added that several of his members had contacted him to express concern about backing for privatization measures.

The Bermuda Industrial Union had not commented by press time.