A Cabinet minister yesterday moved a parliamentary motion to create a select committee that will probe the the Bahamas Telecommunications Company’s (BTC) 2011 privatisation. 

Shane Gibson, minister of labour and national insurance, described the committee as “critical” to determining the financial merits of the deal that saw a 51 per cent majority BTC stake sold to Cable & Wireless Communications (CWC).

He highlighted BTC’s legacy pension plan deficit, noting that at the date of privatisation it had a surplus but, by the end of 2012, it was running a deficit of some $35 million.

Under the terms of the deal, the legacy pension plan was to be closed to new entrants, who would be placed into a new one sponsored by BTC. The Government was then supposed to take responsibility for ‘filling the hole’.

“The endowment was never made. BTC’s pension by the end of 2012 was running a deficit of some $35 million,” Mr Gibson said.

“That has now ballooned to just under $100 million. We have not taken into consideration the downsizing last year. They are now having a review done to see the impact on that $100 million, which means it was already a net giveaway of BTC.”    

The Ingraham administration sold a 51 per cent controlling interest in BTC for around $206 million. “After the FNM sold BTC, what we did get? That is what the committee will seek to find out,” said Mr Gibson.

    “Money in the bank grew from $44.4 million in 2001 to $135 million in 2007, and it was as high as $170 million in 2007.”

He added that CWC’s financials revealed it had met $63 million of ‘goodwill’ money in BTC’s bank account.

Free National Movement (FNM) leader, Dr Hubert Minnis, pushed back against suggestions that the Ingraham administration had undersold BTC.

“The profits that BTC made between 2001 and 2007 was only as a result of the right-sizing process that the FNM had commenced. Prior to that it was a negative value,” said Dr Minnis.

    FNM deputy leader and opposition finance spokesman, K Peter Turnquest, argued that the sale of BTC had been transparent and done for fair market value in light of two independent valuations.

Mr Turnquest described the motion for the establishment of a select committee as “clearly partisan, political and an abuse of power.”

He accused the Christie administration of seeking to wage a political war “on the people’s dime”, suggesting that the BTC deal probe was a merely a distraction.