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TUESDAY, APRIL 24, 2018
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Water Corp chair warns: Restructuring is coming
‘We’ll lose the plot’ if EU/WTO dictate taxation reforms
By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net
By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net
T
he Water & Sewerage Corporation will likely follow other utilities in right-sizing its workforce through voluntary separations, its chairman revealing yesterday: “All options are on the table.” Adrian Gibson told Tribune Business that while the Corporation had yet to reach this point, there was “no doubt” it will have to restructure and reorganise in a bid to align its staffing and cost base with revenues and future needs. Unveiling some of the Corporation’s plans for advancing beyond the highly-publicised findings of its recent forensic audit, Mr Gibson said part of this strategy involved closer collaboration with other
* ‘All options on table’, including VSeps * Targeting cut to customer billing/pay cycles * ‘Stay tuned’ for recourse on 91% cost overrun * Corp can’t be ‘place where cronies are stacked’ utilities - especially Bahamas Power & Light (BPL). He disclosed that the Corporation’s Board held a joint meeting with its BPL counterpart on December 7 last year, with others to follow, as the two sides discussed ways to improve efficiencies and generate customer savings. Mr Gibson said some of the areas explored included repair works co-ordination; a shared “one-stop” customer service centre; collaboration on the installation of automated meters; and the potential for facilities and infrastructure sharing.
ADRIAN GIBSON The Long Island MP said the Corporation was also aiming to slash its billing cycle from three months to two, in a bid to tackle
its long-standing accounts receivable problems caused by delinquent and non-paying customers. Pledging that areas with high customer defaults will be targeted for disconnections, Mr Gibson said the Corporation’s forwardlooking focus does not mean it has forgotten - or can forget - the past. He reiterated assertions by Desmond Bannister, minister of works, that the findings of Ernst & Young’s (EY) ‘forensic’ audit into the Corporation’s recent past would lead to legal
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THE Bahamas will have “lost the plot” if it allows external pressures to dictate tax reform, a top accountant yesterday warning against any “knee jerk” changes. Gowon Bowe, the Bahamas Institute of Chartered Accountants (BICA) president, told Tribune Business that this nation must avoid reform merely for the sake of complying with demands from the likes of the World Trade Organisation (WTO) and European Union (EU). He argued that tax reform should instead be driven by the Bahamas’ national interests and how it “wants to play in the global village” for trade and financial services created by these regimes. Calling for the Bahamas to “look out 25 years”
* BICA CHIEF WARNS AGAINST ‘KNEE JERK’ CHANGE * URGES REFORMS TO ‘LAST A GENERATION’ 25 YEARS * BAHAMAS MUST DECIDE ‘HOW IT WILL PLAY’ and enact tax reforms that will last for a generation, Mr Bowe said any changes needed to be governed by economic competitiveness, bolster this nation’s ability to attract foreign direct investment (FDI) and ensure the Government has sufficient revenues to provide necessary public services. The BICA president warned against simply
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DPM TELLS BANKS: ‘DO FAR BETTER’ ON DIGITAL EDUCATION ROYALSTAR By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net THE Deputy Prime Minister yesterday admonished the commercial banking industry to “do a much better job” in preparing Bahamians for the digital financial services age. K P Turnquest, driving home a message he delivered last week, told Tribune Business that Bahamas-based commercial banks had “not paid enough attention” to addressing consumer concerns in their haste to drive clients to electronic/digital banking. He argued that too little was being done to combat mistrust of new technology, and educate Bahamians on the benefits of going ‘digital’, which they will ultimately have to embrace to keep up with a fast-changing financial services market. This, Mr Turnquest added, was key to solving ‘financial inclusion’ woes created by the withdrawal of physical bank branches from the Family Islands that threatens to undermine access to financial services. Describing access to mainstream financial services as “a pressing issue” for the Minnis administration, the Deputy Prime Minister said the lack of ‘financial inclusion’ on islands such as Acklins was inhibiting their growth and contribution to the Bahamas’ gross
* Sector ‘not paying attention’ to vulnerable * Out Island financial inclusion ‘pressing issue’ domestic product (GDP). “The banks have been pushing along but have not given enough attention to ensuring the most vulnerable are made aware of the facilities available,” Mr Turnquest told Tribune Business of the digital banking ‘push’, which has been driven by the three Canadian-owned banks in particular. “Those not having access to a computer, how they might be able to use their phone as most people have access to smart phones, how they can access their account through ATMs and generally increasing financial literacy and knowledge. “The banks can do a much better job sensitising the Bahamian people, and bringing people along with this new age of banking. It’s in everyone’s interests, including theirs.” Mr Turnquest, echoing sentiments expressed last week in his speech to a Miami anti-money laundering conference, said “the lack of financial inclusion” in many Family Islands meant those communities were unable to properly develop and exploit available economic opportunities. “Without access to good, reliable financial services it really limits
those communiAndros and Long ties’ ability to take Island threatens to advantage of the leave those locaglobal economy and tions without a natural environfull-service physiment they have,” cal bank presence, the Deputy Prime and Mr Turnquest Minister explained. said “creative solu“It’s an impeditions tailored” to ment that will not the Bahamas’ geoonly affect the graphical make-up growth and GDP are required. contribution from “It’s a pressing those islands, but issue given the posit affects the entire ture of the banks KP TURNQUEST country.” The with respect to absence of jobs downsizing in terms and entrepreneurial opportuni- of a bricks and mortar presence,” ties in these islands, Mr Turnquest Mr Turnquest told Tribune Busiadded, was leading to their depop- ness of ‘financial inclusion’. “We ulation and flow of persons to don’t anticipate there’s going to be Nassau that “puts a strain on ser- a reversal of that trend in any way, vices” and results in the capital’s so we have to meet the challenge overcrowding. and go forward. Recent commercial bank branch “That’s almost as hard as finding closures in the Family Islands the right technology solution. A threaten to further exacerbate lot of people are distrustful of this this trend and problems of ‘finan- technology. We’re no different. cial inclusion’ for all Bahamians, It’s going to be a real education while driving home the urgency for push from us for Bahamians to this nation to move to digital bank- understand the security around the ing channels such as mobile and technology, the efficiency of the the Internet. technology, how to use it properly Royal Bank of Canada’s (RBC) impending exit from both North SEE PAGE 2
A BAHAMAS-based ‘Fintech’ firm that offers consultancy services for potential Bitcoin and cryptocurrency investors has seen a “tremendous increase” in business since late 2017. Island Crypto, a Bahamian-based company focused on cryptocurrency and blockchain technology, is aiming to become a leading provider in cryptography and distributed systems in the Bahamas. Island Crypto, and its parent company, Fintegic Group, were founded by Tevin Wilkinson, its chief executive, along with Fabian Williams and Wheatly Wilson. They opened for business in March 2017. “Business has tremendously increased from the last quarter of 2017,” said Mr Wilson. “We have noticed that persons, especially millennials, are seeking new ways to invest their money. “With safeguarding our clients’ data and information, we can say that Island Crypto has had clients from all walks of life - from those considered as the elite
By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net
and upper class to those just getting by but seeking a way to secure their future. “While there are risks involved with any investment, the cryptocurrency market tends to be extremely more volatile. When we meet with potential clients we urge them not to only think of volatility as something bad because it can be positive and work in your favour.” Mr Wilson added that the Fintegic Group develops and delivers both software and hardware solutions for businesses, governments and individuals to securely move an asset across a blockchain, as well as purchase and accept cryptocurrencies in any business. “The expertise of The Island Crypto/ Fintegic Group ensures successful, easy, fast, secure and cost-effective connectivity to the blockchain and the world of cryptocurrency. We pledge to be the leading provider of blockchain technologies, on the forefront of work in cryptography and distributed systems in the Bahamas,” said Mr Wilson. “We utilise the technology of the blockchain to allow companies to successfully
ROYALStar Assurance’s chairman has warned Bahamian insurance consumers to brace for “hardening” premium prices, following a storm-free 2017 in which its profits more than quadrupled. Sir Franklyn Wilson, writing in the property and casualty insurer’s annual report, warned that the Bahamas was not immune from the $50 billion worth of Caribbean insurance claims stemming from hurricanes Irma and Maria despite this nation largely escaping their wrath. The global reinsurance market’s share of these losses meant that Bahamian insurers such as RoyalStar, who purchase coverage from this sector, will be faced with increased costs as companies seek extra compensation to cover the increased risk and 2017 losses. “Due to substantial global losses in 2017, we believe that 2018 will be the start of a ‘hardening’ insurance market cycle where reinsurance capacity will continue to be available, however, at a higher price,” Sir Franklyn wrote. “This will present RoyalStar with new opportunities to grow the insurance business in selected markets.” Global reinsurers tend to treat the Caribbean as a single market, grouping the Bahamas with the entire region and Florida, which means insurance premiums here will feel the impact of Irma and Maria’s Category 5 winds throughout 2018. Bahamian insurers have not choice but to purchase huge quantities of reinsurance annually, as their multi-million dollar capital bases pale into comparison to the multi-billion dollar
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Bahamian firm targets ‘forefront’ of blockchain By NATARIO MCKENZIE Tribune Business Reporter nmckenzie@tribunemedia.net
PROFITS QUADRUPLE AMID PREMIUM ‘HARDENING’