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Bec ‘Always At Brink’ Over Fuel Payment

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The Bahamas Electricity Corporation (BEC) always takes its fuel payments “right to the brink”, a well-known businessman arguing that a $30 million investment in pre-paid meters would help solve its cash flow woes.

Dionisio D’Aguilar, who served on the BEC Board when the former Ingraham administration was in office, told Tribune Business that few Bahamians realised how close the Corporation sometimes came to running out of fuel.

Leslie Miller, BEC’s current chairman, previously said the Corporation was owed some $185 million by its customers in accounts receivables, which Mr D’Aguilar took as further evidence that the current ‘bill and collect’ system does not work.

Calling on BEC to “stop flogging a dead horse” with its current customer collection plan, Mr D’Aguilar called on it to instead invest $20-$30 million in installing pre-paid meters for its 100,000-plus customers.

Disclosing that the Board he served on had been “moving in that direction”, Mr D’Aguilar said pre-paid meters would better allow Bahamian households and businesses to manage their energy consumption and efficiency.

And, from BEC’s perspective, these meters would improve its cash flow and accounts receivables position, while also getting management out of having to decide which non-paying customers should be cut off. With pre-paid meters, the power would automatically cut off if they were not fed with money.

Speaking after Mr Miller last week suggested that BEC would be cut off by its fuel supplier, Shell Western, if a $55 million bill was not paid by September’s end, Mr D’Aguilar told Tribune Business: “Unbeknownst to the Bahamian people, that’s [a fuel cut off] always the case.

“BEC is always taking it right to the brink, where Shell is sailing into town demanding payment. People in this town don’t know how close we are to running out of fuel.”

Mr D’Aguilar later qualified his comments a little, saying that while the threat of fuel supply interruption was not “a monthly occurrence”, it happened on average twice a year.

“It usually happens around this time of year because it’s hot, usage is high and people have just put their kids back to school, so they are broke and don’t pay their bill. In winter it doesn’t happen because usage is down, but it’s always a problem.”

The Superwash president said cash flow would always “be a nightmare” for BEC unless it changes its billing and collection practices. Suggesting that it always started at a disadvantage by sending out bills 60 days in arrears from the collection period, he said Bahamians frequently failed to pay, did not pay in full or on time, and failed to adhere to agreed payment plans.

Describing the ‘bill and collect’ system as “broken,” Mr D’Aguilar urged: “Stop trying to squeeze something out of a dead carcass. Stop flogging a dead horse. Bill and collect, it doesn’t work.”

He suggested that BEC’s cash flow would “improve 10-fold” if it installed pre-paid meters for all its customers, as this would force them to pay or be cut off automatically. With the Government BEC’s “worst customer”, Mr D’Aguilar said pre-paid meters would force it to allocate Budget monies for electricity every year.

“BTC doesn’t have an accounts receivables problem. People pay before they use the the phone. Why not piggyback on that?” Mr D’Aguilar told Tribune Business.

“We were moving in that direction [pre-paid meters] when I was on the Board. We had done some preliminary studies, had outlined some plans, and were moving in the direction of pre-paid meters.

“It would solve so many of BEC’s problems. There’s a cost associated with it, $20-$30 million, but people would start paying like crazy. The benefits are just huge.”

Mr D’Aguilar extolled the virtues of pre-paid meters, suggesting they would cause Bahamians to focus on paying their bills, while also becoming more aware of energy usage and conservation.

It would prevent lower income Bahamians from running up massive bills they could not pay, and from being cut-off by BEC for several months. From BEC’s perspective, cash flow would improve and management would not have to make choices about which customers to cut off.

While acknowledging that BEC’s dire financial straits meant it was unlikely to be able to afford the $30 million investment required for pre-paid meters, Mr D’Aguilar said the Government would have generated better returns for the Bahamian people had it invested the $50 million pumped into the Bahamas Agricultural and Marine Science Institute (BAMSI) in such a project.

“BEC needs help,” he told Tribune Business. “Over the last 10 years, there have been many years where the load shedding was as bad as this year.

“It’s really because the Corporation is bankrupt, living from government subsidy to government subsidy. It’s in a desperate situation. It’s why Mr Miller has to come to the people to pay.”

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