No more split for BEC - and decision may be in two weeks

As of Thursday, December 4, 2014

Deputy Prime Minister Philip 'Brave' Davis

By NICO SCAVELLA

Tribune Staff Reporter

nscavella@tribunemedia.net

AN announcement on which private company will manage the Bahamas Electricity Corporation (BEC) may come within two weeks, Deputy Prime Minister Philip “Brave” Davis said yesterday.

Mr Davis said the government would ultimately commit to a “management company that can guarantee reduction of the cost billed to the customer to an average of less than 30 cents per kilowatt hour”.

Mr Davis made his statements on the sidelines of an energy reform workshop at the British Colonial Hilton hotel.

As it stands, three companies are currently bidding to manage the corporation, according to Mr Davis.

He confirmed a Tribune Business report that the government has abandoned its previous plans to split the corporation into two components - generation and transmission/distribution - and has opted to select a single private sector “manager” for all of BEC’s operations.

However, he said the government would retain 100 per cent ownership of the corporation.

He also announced the government’s drafting of a new Electricity Act which would “provide for new innovations at BEC.”

“There was this idea of splitting BEC into two components, the generating component and the transmission and distribution component,” Mr Davis said yesterday. “Having looked at all the bills with respect to it, we then had to review where we were and we decided that it’s best the government retain 100 per cent ownership of it and perhaps move towards the management area and from those companies as part of that process we then allow them to make proposals in respect to this new model of managing it.

“What we are in effect doing is setting up like a (Nassau Airport Development Company) model. We’re identifying a strong, reliable, experienced energy company who is already in the business to manage BEC on certain management terms. The government will still own BEC, but it be managed by them and it will bring in some capital to assist in the construction of a new plant to assist in all of the issues that impact the cost of electricity.”

In August 2013, Prime Minister Perry Christie announced plans to divide BEC into separate entities. At the time, he said it was envisioned that one company would run the transmission, distribution and customer billing, while another company would offer power generation.

Initially, the government was supposed to select BEC’s preferred bidders by November 2013. In July this year, a new deadline was set for August 30.

In September however, Mr Christie suggested that the government would delay the reformation process, saying he felt it was best to prioritise management of the corporation’s legacy debt.

He said at the time the government was considering a firm with such capacity, and said he had “intervened for the NAD model,” referencing the Nassau Airport Development Company’s managerial functions at the Lynden Pindling International Airport.

In September, Bahamas Electrical Workers Union President Paul Maynard told The Tribune that while no company had been officially chosen to handle BEC’s management and distribution, the field had been narrowed to three bidders. He said a deadline of sometime before November 1 had been tentatively set.

This week, sources told Tribune Business that the government was pushing to conclude a deal with its preferred bidder before the New Year. Sources said negotiations were being undertaken with the remaining three bidders to agree to terms and reach a final position.

Mr Davis yesterday confirmed the government’s plans to select a company before year’s end and also said the government is drafting a new Electricity Act to cover the corporation’s and its assets’ transition to being privately managed.

“My ministry is collaborating with the Attorney General’s Office and BEC to create a new Electricity Act which provides for new innovations at BEC,” he said. “It enables the energy policy and empowers the utilities regulations and competitions authority that will serve as the regulator of the sector.”

According to sources, the three remaining bidders are thought to include Power Secure, China State Construction and Inter-Energy.

Mr Davis yesterday said as the government establishes a “new, strong and vibrant BEC,” customers will experience “great improvements in the reliability of the system,” including a “great reduction” in the frequency of power outages.

GrassRoot 9 years, 4 months ago

what about reduction of cost?

duppyVAT 9 years, 4 months ago

Another Blue Waters facade ................... remember Hubert Ingraham had to straighten out the Airport project and set up NAD .................... Perry and Brave are different characters who look out for friends, family and lovers ............ thats cliche but true

Sickened 9 years, 4 months ago

So this new management company will be allowed to cut staff, reduce overtime, implement a shift system? Will the new management company renegotiate the union contract and have become effective immediately? If so then why not just let Miller do it now and save on paying management fees to this new company. As usual, something is very shady?

The_Oracle 9 years, 4 months ago

You can believe something is up, some personal benefit to the cronies. Otherwise I wonder if they know how flakey they appear? They could screw up a scrambled egg! With the stadium crumbling and falling apart, they gonna give it to the Chinese?

duppyVAT 9 years, 4 months ago

Sickened .... you make some good points there. I have some further questions.............

So what will this company be called? Bahamas Energy Solutions Dev.Co.Ltd.?, Bahamas Power Systems Management? Will there be a foreign entity involved (like at LPIA)? What will be its assets portfolio responsibility? What will be its legal powers? and who will be appointed to its top management?

This announcement begs further clarity ..................... but we are dealing with Brave Davis here.

asiseeit 9 years, 4 months ago

The big question is will the management company be able to keep the political grubby, sticky, fingers at bay. The only way they will be able to sort out B.E.C. is if Ali Babba and the forty thieves are out of the equation.

UserOne 9 years, 4 months ago

Will Leslie Miller be micromanaging as he is now? Will Leslie Miller and his friends still not pay their BEC bills? If so, there is no way anyone is going to be able to reduce our bills.

duppyVAT 9 years, 4 months ago

By the time this new company takes over BEC, Leslie will long be gone.

countryfirst 9 years, 4 months ago

So now the Chinese are gonna own BEC too

Greentea 9 years, 4 months ago

this must be why the union kicked up a fuss and were talked down from the ledge. 100percent government ownership=business as usual. Less than 30 cents per kwh eh? Sir is that with or without the infamous "fuel surcharge"?

The_Oracle 9 years, 4 months ago

The fuel surcharge which should now go away with oil under $70 a barrel!

duppyVAT 9 years, 4 months ago

Fuel surcharge cannot be justified now ................. its robbery. The BEC customers should not be paying for government & management incompetence and workers' greed.

It is time to get rid of the present BEC ............ dont amend the BIll ......... blow it up and start over with a private energy services provider company like Batelco vs BTC.

Whether we agree with how HAI did BTC ............ we will benefit from the decision long term (if it is handled right by the present government). However HAI vision for BTC has been hi-jacked by the PLP.

duppyVAT 9 years, 4 months ago

I ENDORSE THE COMMENTS BELOW OF "SICKENED" FROM ANOTHER STORY

You are all missing the point here. You know how the PLP works. Mr. Davis is subtly offering his services to these large establishments... donate $5 million to the PLP and your $8 million annual bill will disappear. An immediate savings... for free. It's a no-brainer. A win-win for everybody (except of course the average Bahamian who will pay the difference through a Fuel Surcharge)???

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