The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The Bahamas Electricity Corporation (BEC) refrom process has been delayed because the Government wants to ensure there is no truth to unsubstantiated “integrity concern” rumours that have been raised over its preferred bidder.

Tribune Business can reveal that US company, Carolinas-based Power Secure, is effectively the only contender remaining at the table for the BEC management contract.

But highly-placed sources, both within the Government and inside the BEC process, have disclosed to this newspaper that the Christie administration has delayed confirming Power Secure as the winner due to “scorched earth” tactics employed by persons associated with rival bidders.

This newspaper was told that “vested interests”, a euphemism for Bahamian groups and individuals associated with these bids, had embarked on lobbying and ‘whispering’ campaigns targeting Power Secure’s reputation and ability in a last-ditch effort to get their parties back into the race.

Among the claims that have surfaced are those by Bahamas Electrical Workers Union (BEWU) president, Paul Maynard, that an agreement had already been set up for BEC’s existing outside maintenance company, Burmeister, to provide the same services once Power Secure took control.

While this has been vehemently denied, other ‘anonymous’ allegations surfacing on the Internet have claimed, among other things, that Eddie Darville, brother of minister for Grand Bahama, Dr Michael Darville, has connections with Power Secure.

This claim, too, remains unproven and with seemingly little truth to it. Tribune Business has already revealed that Power Secure’s Bahamas-based ‘point men’ are former Colina Insurance president, Jimmy Campbell, and investment banker Mark Holcombe.

However, it stands as a good example of the ‘rumours’ that are being spread surrounding the BEC process and the preferred bidder.

All this has given the Government ‘pause for thought’, and the Christie administration pushed the BEC management contract announcement beyond its stated December 2014 deadline to allow time for further due diligence.

The Government effectively wants to ensure it selects the right manager to turn BEC around, and that its decision is one beyond reproach and stands up to all scrutiny. It does not want to make a choice, only for this to later come back to haunt it.

Power Secure is understood to have withstood all scrutiny to-date. Tribune Business sources said a key meeting with the Government was held on December 29, at which time it was presented with US Justice Department and US State Department documents and certification attesting to the company’s bona fides.

Power Secure is also a public company listed on the New York Stock Exchange (NYSE), which means that it is subjected to greater scrutiny, transparency and due diligence than privately-owned counterparts.

The US firm, Tribune Business understands, is the ‘last man standing’ in the BEC process. Of the other two bidders who made the ‘final three’, sources suggested Caribbean-based Inter-Energy had fallen away, while China State Construction - the Baha Mar/British Colonial Hilton investor - had only been interested in building a new power plant as opposed to managing BEC.

Philip Davis, the deputy prime minister who is responsible for BEC, hinted on Friday that an announcement on the BEC management contract could be made this week after Prime Minister Perry Christie attends the Caribbean Energy Security Summit in Washington D. C.

US vice-president Joe Biden will be attending the summit, and it is likely Mr Christie and his delegation could be subjected to an intensive lobbying effort surrrounding the BEC contract.

This is because the Obama administration has made it clear it has a stake in the process and its outcome, having already endorsed Power Secure and other US groups to win the bid.

Tribune Business revealed last year how Mr Obama’s commerce secretary had urged the Bahamian government to select two US-led groups to reform BEC and the energy sector, describing them as the “superior choice”.

In a direct lobbying effort directed at Deputy Prime Minister, Philip Davis, Penny Pritzker touted the “cutting edge proposals” submitted by two of the five then-remaining BEC bidders - Caribbean Power Partners and Power Secure International.

Ms Pritzker, in her June 27, 2014, letter to Mr Davis, said: “Caribbean Power Partners and PowerSecure International are companies with years of experience in the realm of power generation and distribution, and bring to the table cutting-edge proposals to meet today’s energy needs.

“Caribbean Power Partners and PowerSecure International offer innovative and cost-effective solutions that make them a superior choice for the ambitious plans of the Commonwealth of the Bahamas.

“Please know that these firms have the full support of the United States Government.”

Meanwhile, observers of the BEC reform process have told Tribune Business that the real question surrounding Power Secure’s likely selection is why the Bahamian government has chosen a transmission and distribution - as opposed to generation - specialist as the manager.

The majority of BEC’s woes, and multi-million losses, stem from its outdated, inefficient and poorly maintained generation units. These result in a ‘fuel burn’ rate much higher than the global ultility average, resulting in the Corporation burning through many more millions of dollars of oil than it should annually.

And, in the absence of a generation specialist, the same observers have questioned how a privately-managed BEC can achieve the Government’s stated objective of a 30 per cent cut in energy costs within 24 months.