The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

A bidder from ‘outside’ the formal Bahamas Electricity Corporation (BEC) reform process yesterday confirmed it had submitted a formal offer to take over and restructure the energy monopoly, although it remains “in limbo” on the outcome.

The Bahamian and US players in the Bahamas Power Management Group (BPM) were tight-lipped when contacted by Tribune Business yesterday, although one confirmed that it had “submitted a proposal” for BEC to the Christie administration.

Glenn Lowe, president of Treasure Coast Development and Construction Company, told this newspaper that BPM was waiting for the Government to make a final decision on who BEC’s private sector manager would be.

“Nothing is moving at this point,” he said, when contacted by Tribune Business. “There’s nothing I can say. Everything is just at a standstill.”

However, Mr Lowe then confirmed: “We submitted a proposal just like everyone else. We had a couple of discussions [with the Government], but nothing major at all.

“We’re just trying to get updates like everybody else. We’re in limbo, and can’t make any comments or statements at this time. There’s nothing official at this point.”

Mr Lowe is the Bahamian involvement in BPM. His partner is Colorado-based Ludvik Electric.

Rick Giles, Ludvik Electric’s ‘point person’ on the BEC bid, was even more guarded when contacted by Tribune Business.

Asked whether Ludvik was part of a group that was negotiating with the Christie administration to take over BEC’s management and operations, Mr Giles replied: “I can’t comment at this time, and can’t confirm or deny those rumours.”

He gave the same answer when asked if BPM, and Ludvik/Mr Lowe, had been speaking to the Government for several months about taking over BEC’s operations.

Tribune Business, though, can confirm that the BPM consortium has been involved in discussions with senior, influential members of the Christie administration despite being rejected from the formal BEC process being run by the KPMG accounting firm and the Government’s advisers.

This newspaper previously revealed private sector fears that the Government may have compromised the integrity of the Bahamas Electricity Corporation (BEC) reform process by renewing contacts with groups that either did not participate, or were rejected, from the bidding at an early stage.

Gowon Bowe, the Bahamas Chamber of Commerce and Employers Confederation’s (BCCEC) chairman, had questioned whether the BEC process had been re-opened after Prime Minister Perry Christie let slip that the Government had also been talking to Emera and BISX-listed FOCOL Holdings again.

Other Tribune Business contacts at the time suggested it was highly improper, and irregular, for the Government to be talking to non-participants and rejects from the BEC reform process without confirming it has ended - and no bidder deemed suitable. That would be contrary to international best practice.

Carolinas-based Power Secure was viewed as the only remaining player from the formal, KPMG-run process for what would be a ‘management contract’ to operate BEC. Yet it, too, has heard nothing from the Government.

Tribune Business contacts familiar with the situation said the Government has “made a decision” on who BEC’s private sector partner is, but has yet to formally announce it. Those who have met with key Cabinet ministers have reported that the winner is “an American company”, but no one knows who.

Several contacts have suggested that the repeated delays in announcing a winner relate to the Government’s desire to ensure “everyone is on board” with the selection, and that the choice is beyond reproach or question.

Deputy Prime Minister Philip Davis, in addressing the House of Assembly on the Electricity (Amendment) Act 2014, again acknowledged the importance of reforming BEC when it came to reducing energy costs and improving reliability.

Yet, while referring to the KPMG-run restructuring process, Mr Davis again failed to mention who a winning bidder might be.

“It is well-known,” Mr Davis said, “that government has also engaged the process toward identifying a strong, technically capable and experienced company to manage a new BEC. This management company will have significant autonomy and operate subject to a business plan which addresses the specific objectives of government within the frame of the new Electricity Act and the National Energy Policy.

“I have previously communicated to this House that we will seek to cause the business model to basically mirror that which the Nassau Airport Development Company (NAD) has for the management of the Lynden Pindling International Airport (LPIA). Corresponding to the airport arrangement, government commits to 100 per cent ownership of BEC.

“BEC will remain fully owned by the people, though fully managed by a company that can guarantee the reduction of the cost billed to the customer by up to 30 per cent immediately following the commencement of the contract, given the all-in-cost base of average 40 cents per kilowatt hour.”