The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The Government will receive final recommendations on who it should select as the preferred bidder(s) for the Bahamas Electricity Corporation (BEC) by mid-March, with the he Utilities Regulation and Competition Authority (URCA) earmarked to become the energy sector’s new regulator.

Simon Townend, the he KPMG (Bahamas) partner and head of its corporate finance arm in the Caribbean, told Tribune Business yesterday that all five remaining bidders had completed presenting their proposals to a Cabinet committee.

With this stage in the process now completed, it is up to KPMG, which has managed the BEC restructuring process on the Government’s behalf, and DNV Kema and Hogan Lovells, the technical and legal advisers, to determine who is best suited to take over the ailing utility monopoly.

“Following the presentations, KPMG along with the technical and legal advisors, are finalising recommendations to Government on next steps, and the shortlisting of bidders for negotiations,” Mr Townend confirmed.

“It is expected that final recommendations will be made to Government by mid-March as to the preferred bidders.

It is unclear when the Government will make its decision, or whether it will even act on the recommendations - approving its advisers’ choice or otherwise, or even deciding to abandon the process completely.

With a government decision unlikely before late March at the earliest, this effectively places the BEC and energy sector restructuring process some four months behind schedule.

Mr Townend, meanwhile, confirmed that the Government’s advisers had elected for URCA to take over regulatory responsibility for the energy sector, rather than creating a separate supervisory body as also previously mulled.

“New legislation is being drafted for the electricity sector,” he added. “It is intended that the Utilities Regulation and Competition Authority (URCA) will become the regulator for the electricity sector.

“URCA is now a well-established regulator, with the appropriate infrastructure in place to bolt-on electricity regulation.”

This, though, means that URCA will require substantial beefing up in terms of material resources and regulatory expertise, and may well need foreign executives experienced in energy regulation - at least in the initial stages.

Mr Townend added: “There are five remaining bidders in the process bidding on either generation, transmission and distribution or both. Final submissions were received from bidders on January 31.

“As part of the evaluation process, over the last two weeks, all five bidders were given the opportunity to present their proposals to a committee of the Government representing the Office of the Prime Minister, Ministry of Works, Ministry of the Environment and Housing and the Attorney General’s Office, along with KPMG.

“The intention behind the presentations was to provide context and colour to the bidders’ proposals, as well as elaborate on key areas such as fuel strategy, fuel supply chain, financing for new equipment and legacy debt and labour plans.”

Carolinas-based Power Secure as the only bidder still in the running for the contract to manage BEC’s transmission and distribution business. The other four generation-based bidders include Caribbean Power Partners, Genting and Cayman-based Inter-Energy.