The proposer of a $650 million waste-to-energy plant yesterday backed the Government’s decision not to break the Bahamas Electricity Corporation (BEC) into two, and instead select a management company to operate it.
Dr Fabrizio Zanaboni, Stellar Energy’s chief executive, said that based on his experience dealing with mergers and acquisitions, the privatisation of a loss-making monopoly such as BEC was not a good idea.
“Over the years I have been involved in many mergers and acquisitions,” he said. “You never privatise a company losing money, it’s bad business. I’m not criticising anyone, I know the Government has their own advisors, but the initial idea to sell BEC or to split the power generation and distribution up when BEC was in deep financial trouble was a bad idea.
“It looks now that the Government took the right decision in so far as BEC can remain 100 per cent owned by the Bahamian people. PowerSecure will make BEC profitable, reduce the tariffs and we can contribute to that. From that point of view, I think the Government took the right decision. Whether PowerSecure was the best company we leave that to Mr Davis and the Task Force. We shall see.”
The Government moved away from splitting BEC into separate generation and transmission and distribution (T&D) arms, as initially proposed in August 2013, and instead decided to pursue a business model which mirrored the Nassau Airport Development Company’s (NAD) arrangement for Lynden Pindling International Airport’s (LPIA) management.
Under the new arrangement, the Government will retain 100 per cent equity ownership of BEC even after the private sector manager is in place.
The Government has selected Power Secure as the manager, and plans to give it a five-year contract to oversee BEC’s generation and transmission/distribution for BEC, although the deal has not yet been finalised.