‘We get it back… rejoice and be glad’
The Government’s Press Conference on the buy-back of majority shares in Grenlec has conferred doubts and conjured up fears among many Grenadians. It was striking that neither of the two Ministers hosting the Press volunteered information on the source of funds to execute the takeover!
The question had to be put to force a response. So they deliberately disregarded what they knew was an issue of high public importance. Had the question not been put, there was going to be no accounting to the public. To be kind, what transpired was laden with intrigues, mischief, and misinformation.
The situation worsens when one considers that the Tribunal’s award to WRB was made in April 2020. Since that time, the Government ‘knew’ it had the cash (by Bowen’s account) to buy back the shares but chose to be dumb, not even announcing its intentions in the Throne Speech or the 2021 budget statement. Yet, merely a few weeks later, it breaks a mysterious piggy bank (Transformation Fund?) pays WRB and keeps its mouth shut for days. The pieces simply do not add up.
Consider the following two issues:
- The new character of Grenlec: With Government owning over seventy percent of the shares, Grenlec no longer qualifies as a private company. Its status will settle with the eventual implementation of the promised divestment (at least twelve to eighteen months from now). Grenlec cannot even be expected to function on private sector business principles since Government, as principal shareholder, will appoint most of the directors. Those persons will take direction from a Minister.
Effectively, therefore, until divestment, Grenlec will be run by the Cabinet, i.e., Keith and Gregory. How reassuring and comforting. ‘Stand back and stand by’! Demand the presentation of a policy framework (goals, principles, and procedures) to guide the divestment process. That is when and where citizens will get to know to whom Government will sell its shares.
Bet your life they will say that a ‘strategic investor’ is needed. And they will claim that the interim Management Firm so recommended. Back in March 2020, Minister Bowen disclosed that four Chinese companies and others were interested in acquiring the shares. Chinese interest in Grenlec must still be predominant on the table. Just as the State Department stepped-in to ‘manners’ Keith and Gregory over their maltreatment of WRB, so too Beijing will direct who gets those shares! Woiiii! Things will get very messy in The Spice!
- Public finances: Apparently, the Government has been able to stash almost two hundred million dollars, just ‘for a time like this’! Unbelievable! Understand that the Treasury does not store cash in a vault. Daily, revenues collected are lodged into the Consolidated Fund Account which is maintained at commercial banks in Grenada.
Therefore, the money used to pay WRB, if true, would have had to be pooled from the commercial banks where Government maintained healthy cash balances. Accordingly, there must be a paper trail which the Government should be happy to show the public on national TV. Back the boast! Put the evidence on the ‘Big Screen’!
While at it, Government must explain to the public while having that huge amount of cash it repeatedly denied that it had the resources (fiscal space) to help displaced workers and small businesses, or to meet obligations with teachers and Public Officers.
Notice that the Finance Minister ‘ran for cover’ claiming good financial management since 2013 as the source of funds because 2020, the year of non-implementation, was also a year of significant revenue shortfall. This meant that he could not claim savings under the 2020 recurrent budget with which to finance the capital budget.
Obviously, the money was just not available. For Government to have cash-in- hand, the revenue must first be collected.
Having ‘pigged’ himself he had no choice but to claim that Government had cash put away between 2013 and 2019. Really?
On January 4, 2021, during an interview on MTV, the Prime Minister stated, “We were able to find lots of savings in the 2020 budget”. His message was that a substantial portion of the money was derived from last year’s unspent capital budget. That is not what the Minister of Finance conveyed.
And that also is hardly true given the substantial revenue shortfall in 2020. Money to finance the capital budget comes from grants, loans and recurrent surplus. It is only the latter source that Government has discretion over. Woiiiii!
Notice that Bowen talked about the urgent need to “replenish the source” from which the money came. Being so specific, he seemed to be pointing to the Transformation Fund, without saying so explicitly.
Urgent replenishment suggests that those monies were being kept for a specific purpose(s), most likely General Elections spending. Government was not prepared to use it to satisfy judgment debts to several citizens or other just causes referred to above.
Imagine having several millions of dollars in waiting while the country needs health and education facilities and equipment, investments in agriculture, better roads, etc. Is having a special purpose (undisclosed) ‘piggy bank’ evidence of ‘good government’?
Finally, the issue of costly recklessness whereby bad decisions landed Grenada in hot water. Note here the passage of the Electricity Supply Act 2016… triggering a ‘repurchase event’; the Social Fund Act to spend Grenlec’s money; unwise refusal to buy WRB’s shares at around $8 per share and ending up having to pay $17 per share with Tribunal’s ruling; legal fees for the Tribunal process of over $30 million.
A forensic examination of the financial records/budgets of Government since 2014 is needed to unlock and expose the intrigues, mischief, and misinformation. Those who know better and those who use their common sense cannot ‘rejoice and be glad’.