The Christie administration failed yesterday to respond to questions raised by Central Grand Bahama MP Neko Grant about what appears to be an extra $30 million that was given to Bahamasair, when the House of Assembly only approved $14.8 million for the airline.
Giving his response to the administration's 2016/2017 budget in the House of Assembly yesterday, Grant reiterated Prime Minister Perry Christie's mid-year budget assertion - made in March 2016 - that the government had invested $100 million "to refleet Bahamasair". At the time, Grant pointed out that the House of Assembly approved no such expenditure, nor was it accounted for in the mid-year budget or any other budget.
Grant noted the Bahamasair Holdings Ltd. 2013/2014 Annual Report. Under the heading of "Emphasis of matter", the auditors reported that during the year ended June 30, 2014, and as of that date, Bahamasair's current liabilities exceeded its current assets by $23.5 million. Bahamasair also showed a deficit of $555.1 million as of year-end. The auditors said that without "the continued financial support of the shareholder", such conditions, together with other matters, indicated the existence of a material uncertainty, which may cast significant doubt about Bahamasair's ability to continue as a going concern.
The shareholder is the government.
Grant noted that the liability of $23 million was as of June, 2014. He inquired about the liability as of June, 2015.
"We should be reviewing the 2015 financial statement, not the 2014," he said.
"Bahamasair is bankrupt. For the benefit of the people on the street and for the children in school, if Bahamasair were to sell everything that it owns, including the staple machines on the ticket counter, it will still have to find, as of June, 2014, $23 million to pay its outstanding debts.
"Where did this $100 million come from to refleet Bahamasair? Which financial institution in this world will give Bahamasair, which is bankrupt, $100 million to purchase aircraft, without a guarantee from the government of The Bahamas?"
Guardian Business posed this question some months ago to Bahamasair Chairman Valentine Grimes, who said the money was borrowed from commercial banks, and backed by the government.
Meanwhile, in the House yesterday, Grant said Deputy Prime Minister and minister responsible for Bahamasair Philip Brave Davis confirmed Bahamasair had secured the $100 million to refleet on its own merit, from a financial institution.
"I had my doubts then, and am now able to confirm, having examined the 2016/2017 budget," Grant said.
In the 2015/2016 budget, an estimated $14.85 million was approved as a subsidy for Bahamasair.
Said Grant, "I draw your attention to Head 33 of the 2016/2017 budget. Head 33, Block 90, line item 919220 - Bahamasair Holdings Ltd. Under 'Expenditure provisional, July to March 2015/2016', $44.76 million was given to Bahamasair."
"We now know how these new ATR aircraft were purchased. On whose authority did this government give Bahamasair $30 million more than was approved by this house? Where did this money come from? This House approved $14.8 million for Bahamasair. The government turned around and gave them $44.7 million. I am prepared to yield for an answer," Grant told the Parliament.
No answer was given, and the matter remains open for the government to give account.
K. Quincy Parker, Guardian Business Editor
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