In Miami-Dade County, anything can become the subject of corruption and bureaucracy. This is particularly true after Tuesday's county commission meeting putting an end to the long controversy reigning over the luggage plastic wrapping contractor at Miami International Airport.
That's right. The newest case of special interest controversy in South Florida -and it is a $10 million-controversy- is about nothing more than those yellow plastic wrappings some customers use to protect their baggages from theft. That's, of course, unless the TSA chooses to cut the wrapping open and randomly check if something is wrong with the baggage.
For years, the company offering the service had been Secure Wrap, an indirect subsidiary of Safe Bag Italia SRL that had been paying the county about $1 million as an annual fee to have the right to wrap bags at MIA. But in 2010, a serious competitor came to the market under the name of Sinapsis Trading USA, a joint venture linked to the Italian corporation True Star Group SpA. The latter offered the county a staggering $11.1 million as an annual fee, forcing Secure Wrap to bid up to four times its traditional amount.
Evidently, Sinapsis was guaranteed a serious business in Miami-Dade County, even though the commissioners failed to efficiently evaluate the new contractor's business plan.
Two years later, Sinapsis asked the county to reduce its minimum fee to $8.7 million. Secure Wrap obtained its revenge by starting to wrap baggages at locations outside the airport, for cheaper prices. According to the Miami Herald, the Secure Wrap prices remained at $9 the baggage, while Sinapsis raised its rates to $15. This cost the new contractor millions of dollars.
Because of True Star's request to lower the fee, the Commission demanded a new bid to take place within a year, shortening the five-year contract it had accorded. Sinapsis, now known as TrueStar, and Safe Wrap of Florida, the new Secure Wrap, confronted each other in front of the Board of County Commissioners with dozens of lobbyists. Even County Mayor Carlos Gimenez lobbied actively for the current contract holder TrueStar.
But the Commission refused to follow the Mayor's recommendation (to overturn the Mayor's recommendation, a two-thirds vote is required). On Tuesday, County Hall approved 9-2 an overturn of the recommendation and then unanimously favored Safe Wrap's proposal of a $9.6 million fee, against TrueStar's offer of giving 65% of its monthly gross revenues to the county.
What's the moral of the story? Our commissioners and the bureaucrats ruling Miami International Airport are making a joke out of the case.
Incomprehensible regulations allow only 31 spots to wrap baggages in the largest airport of Florida. But this is already a significant number. Why not simply let the two contractors cooperate and compete within the airport? Both TrueStar and Safe Wrap have advantages and technical merits. Allowing both corporations to operate would push for lower consumer prices and better quality.
Instead, the County government has allowed a single corporation to operate as a monopoly. This is both wrong and wasteful, as it was demonstrated by Safe Wrap's decision to compete outside of the airport when it lost the initial bid, making TrueStar lose millions.
But an even more startling fact is that the county government has ultimate power over a decision that should be left entirely to free markets. This is a terrible aspect of our community, especially when we know that the government has been making mistake after mistake in virtually every issue it has approached, including the wrapping contract.
The recent Sequester apocalyptic scenario played out in Washington and resulting in significant losses for local subsidiaries, such as MIA, only shows that a healthy society cannot depend on government subsidies to exist.
This is an incentive to not only reduce the size of our local government, but also to entirely privatize whole services, including the Miami International Airport. A private airport, free of subsidies, investing only its own profits, and competing against local airports and other means of transportation, will do its best to achieve the best services for its customers. Whether this means choosing the cheapest wrapping contractor or allowing an inside competition between several companies, the ultimate result will be the benefit of the consumer.