A former Chamber of Commerce president says he understands the logic behind the $81 million loan to fix New Providence's chronic leakage problems -- he just doesn't see how the government intends on paying for it.Dionisio D'Aguilar, president of the Superwash Laundromat chain and chairman of AML Foods, told Guardian Business that the country is "borrowing itself into oblivion" with no credible way to pay back its debts.
"I get what they are doing," he said. "I just don't know how they are paying for it. There is the new airport, the Princess Margaret extension, the road works, building the new straw market ... you can see what they are doing. And our taxes haven't gone up one dollar. I don't mind you doing it, but don't lie to us."
D'Aguilar pointed to the $81 million loan from the Inter-American Development Bank (IDB) as the latest commitment by the government. The loan, spread out over 10 years, is intended to reduce the amount of water lost through poor infrastructure by 50 percent. Currently, according to Glen Laville, the general manager at the Water and Sewerage Corporation (SWC), the country looses $16 million every year from water leakage.
The improvements, which will involve excavation on the streets of New Providence by 2013, will save $8 million every year, he said, with the company back in the black by the eighth year. Nevertheless, the AML Foods chief says he "doesn't get the math". "You spend all this money and increase import duties on cars. Don't lie to me and tell me we can afford it without more taxes. Look at what has happened in Italy and Greece. We are taking the same line. The difference is nobody is going to bail us out."
D'Aguilar said that governments cannot borrow on the pretense that things will "get better". He felt these were "intangible" factors. The current spending by the government "is real," he added, and at the moment Bahamians are relying too much on certainties.
Adding that he is not necessarily in favor of higher taxes, he insisted that the crux is when borrowing takes place there needs to be a realistic and practical response to pay the debt. "Come forth and be truthful," said D'Aguilar.
"We are not too big to fail."
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