The list of failures is growing for the Williams administration give-aways of public money to businesses.
In late 2008, Progress Software received $325,000 in an interest free loan from the Williams administration. The company was supposed to add 10 new software engineering positions to the company’s operation in St. John’s.
The company closed its St. John’s office less than 18 months later without adding any new employees. NTV and the Telegram reported the story this month but neither version is available online.
According to the Telegram, the provincial government is looking for the money back. The company has agreed to repay it but to date there’s no sign of any cash.
The story is all too familiar.
In May, the Telegram reported that Kodiak received an $8.0 million interest free loan of taxpayer cash from the same government fund – the Business Attraction Fund - to add 75 new positions at its boot-making factory in Harbour Grace. Instead, the company slashed its workforce.
There’s no word on whether the provincial government has sought repayment of any of that money at all.
Bond Papers readers will recall SAC Manufacturing. That company went belly up a mere four months after it received a total of $675,000 in taxpayer cash from the provincial government.
According to the province’s auditor general, the money would likely have to be written off. In late 2009, though, the provincial government’s audited financial statements still showed the shares in SAC manufacturing and in another failed company on its books as assets. That fourth company – Consilient – figured prominently in an auditor general’s report criticising the way the Williams administration hands out business development cash.
Fortunately for taxpayers, sometimes these deals fall apart before the company gets the cash.Last month, taxpayers watched - likely with jaws agape - as natural resources minister Kathy Dunderdale entertained a proposal from a bankrupt company seeking $52 million to take over the defunct paper mill at Grand Falls-Windsor. Neither Dunderdale nor her officials seemed to know what was going on until the story broke about the bankruptcy and the company withdrew its offer.
The litany of failure stands in stark contrast to the 1995 EDGE program. At a cost to date of $17 million, the program has produced between 1500 and 1600 jobs.
- srbp -
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To be eligible, a company must create and maintain 10 new permanent jobs in Newfoundland and Labrador and make a minimum capital investment of $300,000 or have incremental annual sales of $500,000.~ Telegram .
A caller to Backtalk on Friday alluded to a pellet plant in Grand Falls / Windsor that was a no go and suggested that as many as 150 jobs would be lost to the community . Minister Skinner refuted that by saying the plant would have generated fewer than 30 jobs . Though details between the government and the interested parties are unknown to the public , Skinner's apparent dismissal of "fewer than 30 jobs" seemed rather odd for a government to show so little effort to foster the attitude that promotes real economic growth .The town is unlikely to be revitalized by a mega-project any time soon .New growth will probably occur in the form of small enterprises which in turn will generate the need for other services .
To be eligible, a company must create and maintain 10 new permanent jobs in Newfoundland and Labrador and make a minimum capital investment of $300,000 or have incremental annual sales of $500,000.~ Telegram .
A caller to Backtalk on Friday alluded to a pellet plant in Grand Falls / Windsor that was a no go and suggested that as many as 150 jobs would be lost to the community . Minister Skinner refuted that by saying the plant would have generated fewer than 30 jobs . Though details between the government and the interested parties are unknown to the public , Skinner's apparent dismissal of "fewer than 30 jobs" seemed rather odd for a government to show so little effort to foster the attitude that promotes real economic growth .The town is unlikely to be revitalized by a mega-project any time soon .New growth will probably occur in the form of small enterprises which in turn will generate the need for other services .
Not sure what happened there Ursula but you wound up posting two identical copies of the same thing.
I heard the Minister's comments and was struck by a few things:
1. Neither of the two proposals was anything to write home about and neither was obviously developed enough to have a snowball's chance in hell of getting anywhere without (most likely) huge chunks of public cash.
2. The provincial government seemed overly concerned to control the entire process to the point where I think it would be a huge deterrent to any serious company wanting to start up.
3. Other than the two weak contenders and Lott, there was absolutely zilch in the way of interest in the government's RFP.
This situation is no accident; it is the direct result of the provincial government's poorly thought out policies and actions.
Was the expropriation of the mill so poorly executed that it rendered the assets inoperable ?
A caller to the open-line suggested that the power generated to the mill was at 50 cycles and is not compatible with the island's power grid at 60 cycles.
That suggests that the power has virtually no market value except for some very specific applications only at the mill site .
The wood fibre situation is unclear .There is speculation that wood fibre is making its way to the Corner Brook mill .
Could that be a reason for the reluctance to forge ahead with any proposals at GF/W ?
The wood has a value.
The physical plant has value.
The generating equipment (which is the stuff government really wanted) has a value if only to preclude anyone else but government from using it.
But none of them has any value whatsoever, apart from their esthetic value, unless someone is prepared to create something out of them.
And that is where the expropriation comes in.
The fact of the expropriation - being entirely unnecessary at all - creates a climate into which no one will want to come and invest and create jobs.
And in truth no one has come to invest here unless they already had assets here and had them under development.
We would have to have a truly rare and precious commodity to overcome the stench left by the expropriation in the nostrils of investors.
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