Published On:Monday, March 29, 2010

By NEIL HARTNELL

Tribune Business Editor

THE Bahamas Electricity Corporation's (BEC) controversial new Abaco power plant was moved from its preferred location to prevent it negatively impacting a proposed $160 million "residential and resort" project, government documents obtained by Tribune Business have confirmed.

A confidential May 14, 2009, letter from Ronald Thompson, permanent secretary at the Ministry of the Environment, to BEC's general manager, Kevin Basden, confirms that a previous proposal to grant and lease Crown Land to the Corporation was aborted due to the fact that the $105 million power plant would be in close proximity to an "environmentally friendly" development.

Referring to a Monday, April 20, 2009, Cabinet meeting, during which a memorandum submitted by Prime Minister Hubert Ingraham was discussed, Mr Thompson said of the ultimate decision: "The Cabinet noted that the review of the acreage previously approved for Grant (35 acres), Licence (10 acres) and Lease (11 acres) for a new BEC power generating plan west of Snake Cay was aborted, given the subsequent determination that such a plant would negatively impact a $160 million high-end and environmentally friendly residential and resort project proposed for the Angel Cays (comprising Snake, Taggy and Bunk Cays, and BEC was advised to look at other central Abaco locations."

It had long been speculated that the BEC project was moved to Wilson City because the Snake Cay site was selected for a tourism development, and these documents, which were filed as part of the Government's defence to the Judicial Review action brought against the power plant by Responsible Development for Abaco (RDA), provide the first tangible evidence of this.

In his affidavit filed with the Supreme Court to support his and RDA's case, Matthew McCoy said: "BEC attempts to claim credit for responding to environmental concerns in moving the site from Snake Cay, but......the true reason for abandoning the Snake Cay site was not the environmental concerns expressed, but the fact it became apparent it was suitable for development."

No details were provided on the $160 million project's developers or what their proposal entails. However, BEC and the Government have long been aware of the project proposal, as indicated by an internal BEC memo, dated June 29, 2007, on various possible locations for the Abaco power plant.

While Snake Cay was listed as having numerous positive attributes, including that it had been zoned for 'industrial' usage to handle the City Dump, a major snag was the "proposed touristic development" called the Angel Cay Resort. A further disadvantage was the need to construct an eight-mile, 69KV transmission line to Marsh Harbour, which would cost $100,000 per mile.

However, of the five sites assessed - Wilson City, Hole-in-the-Wall, north and south of the Great Abaco Highway in the Murphy Town area, and Snake Cay - Wilson City was listed as having the fewest advantages.

Its only attraction was described as being a "remote location", with the negatives listed as the absence of access roads; the need to acquire private property for access to the sea, which was 10 miles from the main road; the absence of a docking facility; close proximity to Little Harbour and a tourism resort; and the multi-million dollar cost of constructing 13 miles of 69Kv lines - a $1.3 million payout.

And, to further back their case, RDA and Mr McCoy have filed with the Supreme Court a January 29, 2010, report by NTH Consultants that compares the cost of using Bunker C fuel at Wilson City, as BEC plans to do, with diesel fuel costs.

The NTH Consultants report alleges that it will cost BEC an extra $3.818 million per year in capital and operating costs at Wilson City if it uses Bunker C fuel, something that would make this fuel form more expensive than diesel.

Based on January 28, 2010, prices, NTH Consultants said that while diesel would be more expensive as a fuel to purchase, costing more than $21 million a year, the additional capital and operating costs, combined with the need to desulpherise the Bunker C exhaust gases, would make the latter anywhere from $300,000 to $1.1 million more expensive per annum.