The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The Bahamas Chamber of Commerce and Employers Confederation’s (BCCEC) chairman yesterday expressed hope that the elimination of “the public service mentality” will ensure the ‘new BEC’ hits its legal financial reporting targets.

Gowon Bowe told Tribune Business he was relying on PowerSecure, and the standards it will bring as a US listed company, rather than the Electricity Bill’s requirements, to bring greater transparency and accountability to the Bahamas’ electricity monopoly.

The Electricity Bill’s first schedule requires that, by law, the audited financial statements for the Bahamas Electricity Corporation (BEC) and its new Bahamas Power & Light (BPL) subsidiary by published within four months of their financial year-end.

“The Corporation shall, within four months of the end of each financial year, publish the audited accounts together with the annual report, on the respective websites of the Corporation and BPL, where applicable, and in other media,” the Bill states.

That requires BEC and BPL to match the financial reporting standards imposed on companies listed on the Bahamas International Securities Exchange (BISX), a tall order had they remained under public control.

Mr Bowe told Tribune Business that he was placing his faith in PowerSecure, which as a Nasdaq company has to meet strict financial reporting and public disclosure requirements, rather than ‘the letter of the law’ to ensure the Electricity Bill’s mandate was met.

“It’s more the compliance with the Act than it is the provision and requirement to do so,” he explained. “My hope is that with a private sector manager in there, the quality of financial reporting will be elevated so that they’re able to meet that timeline and information will be available in a timely manner.

“In the absence of the public service mentality in terms of timely information, I’m more optimistic that a private sector firm will recognise the value of timely information.

“I’m not depending on the requirements of the Act, I’m depending on the private sector manager to comply with what’s in the Act.”

Virtually no government-owned or controlled entity meets their statutory financial reporting timelines and obligations.

This was recently illustrated by BEC itself, when Deputy Prime Minister Philip Davis finally tabled its 2013 annual report in the House of Assembly.

The report, which covered the year to end-September 2013, was the first audited data on BEC’s financial performance that the Bahamian people had seen for five years.

The last BEC annual report and financials to be publicly disclosed were for 2010, when the former Ingraham administration was in office. The report for 2013, audited by Grant Thornton (Bahamas), was signed off by BEC’s then-Board in April 2014, more than seven months after year-end.

It then took the Government more than 18 months to disclose it via the House of Assembly tabling in November 2015.

Given that the 2013 annual report made for grim reading, with BEC’s net loss soaring by 60 per cent year-over-year, jumping to $36.075 million compared to $22.558 million the year before, it is likely that the Government only decided to release it now with the energy reform ‘end game’ in sight.

Mr Bowe said there had always been a legal requirement for government-owned and controlled entities to publish their audited financial statements within a certain period after year-end, in the interests of disclosure and transparency to the Bahamian taxpayer.

He added that the four-month timeline was becoming “the new norm”, having previously been six months after year-end.

“The four months is an improvement which is more in line with BISX timelines,” Mr Bowe told Tribune Business. “That at least indicates they’re moving to a private sector mentality.”

The Electricity Bill also indicates that the accounts for BPL and BEC will be published before getting to the House of Assembly, as the minister responsible has three months from their receipt to table them.

“They have to start from the basis of where we are in terms of the quality of information,” Mr Bowe said of PowerSecure, “but I believe we’re starting from the position of clean accounts, as it’s a new subsidiary.”