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BIU: Privatisation could be a ‘recipe to disaster’

The Bermuda Industrial Union yesterday warned that privatisation of public services could be a “recipe to disaster”.

BIU president Chris Furbert told the media that while there are pros and cons to the idea of privatising public services, it was not necessarily true that the private sector could do a better job of providing them.

And he cautioned that privatisation could have devastating social and economic consequences.

Using the example of buses, he said “privatisation could mean loss of services for the customer” with scheduling changes to save money. Or it could mean loss of jobs or higher fares.

“That’s going to be a huge burden to society.”

Mr Furbert noted that there had been a seven or eight year period during which bus and ferry fares had not been increased.

And he repeated arguments made by BPSU president Kevin Grant who said that New Zealand had reversed a decision to privatise rail and ferry services and an effort to privatise the post office in Britain had failed.

“We’ve got to be very careful how we go down this road of saying we’re going to privatise these services because the private sector is in business to make money,” he said.

Free bus services for students or seniors could be jeopardised with privatisation, Mr Furbert said.

He acknowledged that the buses, ferries and post office were all running at a loss.

But he said that the public sector’s wage bill at 47 percent was “reasonable” given what he understood to be the costs structure of many private sector companies.

Government, he continued, had long taken the position that the buses and ferries would be subsidised.

And he suggested that Government make it clear to the public that fares will have to be increased periodically.

“If fuel’s going up, wages are going up, other costs are going up but what you’re charging to get on the bus remains the same, something’s got to tell you the gap is getting wider. It’s not going to get any closer. And that’s why the Government finds itself in the position it’s in now,” he said.

He continued: “The pros right now is it could save the Government a lot of money.

“But all the cons are loss of jobs, possible increase in fares as high as 50 percent or so, you’re looking at cutting services because there’s no way of running that service with even 30 percent less staff.”

Meanwhile Economy Minister Patrice Minors was asked at a post Budget press conference how realistic the idea of privatising the Post Office is for her.

“It’s not,” she said. “I don’t think that in this climate it would be well received by the people of Bermuda.”

Mrs Minors said she also had a philosophical position against privatising the Post Office.

“The unions have always been against privatisation,” Mr Furbert said when asked for his reaction to Mrs Minors comments. “Our experience has been that when privatisation takes place, workers don’t get the fair end of the stick. And that has happened not just in Bermuda but around the world.”

He said: “I just think it’s a recipe for disaster.”

Mr Furbert questioned whether there would be a discussion on privatisation if the Island was not facing a recession.

Bermuda Industrial Union President Chris Furbert speaks during a press coference at the Union's headquaters Thursday about Government privatisation ( Photo by Glenn Tucker )

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Published March 02, 2012 at 1:00 am (Updated March 02, 2012 at 7:52 am)

BIU: Privatisation could be a ‘recipe to disaster’

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