Saturday, April 20, 2024

THE HOYOS FILE: Has Government reached another ‘tipping’ point?


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Desperately flipping through its playbook of economic policies, the Doolittle administration decided to reach for the brass ring again: Find what might seem to be an obscure little tax nobody would care about, and jack it up.

The tipping fee – the price you pay to drop your garbage off at the dump – may have seemed the perfect candidate. After all, most of us, if any, don’t pay it directly. We hire a skip bin and the people who bring it take it away and we pay the bill. But the sight of all those massive haulage vehicles parked in a protest at Warrens last week demonstrated that the tipping fee could not just be multiplied exponentially without anybody noticing.

At the national policy-making level, it was as if the Freundel Stuart administration, like old Mother Hubbard, went to the cupboard and found it was bare. Urgently needing a bone to throw at its creditors, some bright spark came with, shall we say, re-imagining the tipping fee.

As a result, the attempt to lay yet another tax on the consumer, without good reason or explanation, darkened the skies around an addministration which had basked in a few rays of economic sunshine lately.

For even though the price of oil has recovered from a low of around US$45 per barrel a few months ago to around US$60, it is still far below the US$110 price to which it had climbed before its dramatic fall began last summer. That has eased Government’s need for foreign exchange in a tangible way, and it has also reduced the cost of living for everyone, whether they drive a vehicle or not. Because of the oil price drop, inflation has fallen to less than two per cent on an annualised basis.

Then there has been the good news about tourism, with apparently substantial increases in long-stay arrivals from our major markets since the start of the year. The icing on the cake was the Test match between England and West Indies, which brought thousands of Brits to Barbados and Kensington Oval. It was just like the good old days – until the stark reality intruded on our reverie. Mother Hubbard went to the cupboard.

Why would Government do anything to undermine any improvement in its popularity, which frankly needed the boost, by appearing to sneak in a tax on tipping waste at the landfill? And why did it not wait on the expected Budget Speech to do it? Surely, a little bit of sour amid a speech full of sweet trumpeting of its recent economic “successes” might have gone down better?

The answer may be simply that we have a broke Government and an even more broke political system that is so gridlocked it can’t find the votes inside the House of Assembly to block Government enough times so that an election is either forced or some new alliance can be tried.

We may have the much vaunted Westminster system, but our politics operates like a presidential election, in that it seems almost unthinkable for good old staid little Barbados to bring down a sitting Government and replace it mid-stream. The only time we actually removed part of the total Government was when it happened to the Opposition.

Remember when the three blind mice were demoted from the position of official Opposition by four equally blind mice from the windforce party? We came close to it once, ironically, under Owen Arthur’s tenure as Opposition leader, when the votes piled on were one short.

And just before I go today, I want to note something which the theme of my article last week did not allow time or space for, although the source document was the same: The recent PowerPoint presentation made by the Barbados Light & Power’s (BL&P) managing director-designate, Roger Blackman, which took place at the last Barbados Chamber of Commerce and Industry luncheon. The presentation was on BL&P’s proposal to convert its energy production raw material from fossil fuel to renewable energy over the next 30 to 40 years, but with major moves being made over the coming five years.

As part of its review of the renewable energy mix planned for Barbados, the power company noted that Government had two massive projects in the pipeline, the Ministry of Environment’s waste-to-energy project, and the Ministry of Agriculture’s biomass project. The first one, referred to by the company as the Government/Cahill project, plans to deliver to the national grid by 2018 some 40 megawatts (MW) of electricity produced by “plasma arc gasification” at a cost of $650 million.

The process apparently burns garbage at such a high temperature that it turns into gas immediately, taking to a whole new level the phrase “it’s getting hot in here”.

The second project, said to be part of the sugar cane industry’s restructuring, is for a proposed 25MW CHP (combined heat and power, or co-generation) plant at Andrews Factory, St Joseph. This plant will use bagasse, river tamarind and cane grass as fuel, and is expected to be in service by 2017, at a cost, I understand, of about $500 million.

However, in the case of the former project, BL&P said diplomatically that “the cost per MW is unclear at this time”, and in the case of the latter, there were “concerns on the long term viability of the sugar factory and the biomass sources”.

Putting forward what it called an alternative solution, the power company suggested Government “combine the above two opportunities into one”, creating a waste to energy/biomass CHP plant of about 30 MW and using “solar thermal drying of biomass”.

This would save money for the country because there would be “less duplicated infrastructure” and therefore less risk involved. Sounds like a great idea to me. Let’s hope Government takes the advice. Yea, right.


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