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Secret Plan To Axe 233 Jobs

By RASHAD ROLLE

Tribune Staff Reporter

rrolle@tribunemedia.net

POWERSECURE wanted to reduce Bahamas Power & Light’s (BPL) staff by more than 200 workers, believing it could have saved the company “about $20m” doing so, according to the company’s long-concealed BPL business plan.

Works Minister Desmond Bannister tabled the document in Parliament yesterday, saying its plan for staff is not something the Minnis administration is committed to doing.

“Integral to the business plan, which the former administration agreed with, was a decision that a reduction of staff by approximately 30 per cent would result in savings of $13m annually,” Mr Bannister said. “The plan refers to the proposed reduction of staff at BPL as a ‘business necessity’ and envisioned the separation of 233 BPL staff members through a redundancy process in August or October 2017, together with a possible reduction of an additional 64 staff members in September 2018. This business plan and the plan to separate 233 staff members at BPL has remained a secret of the former administration until today.”

In its plan, PowerSecure said about BPL’s current performance summary: “Staffing levels are high by about 30 per cent, creating an opportunity to save about $20m.”

PowerSecure was aware that there was risk its plan for staff reduction wouldn’t take off. “Political interference,” it said in its discussion about risks to the execution of its business plan, would “impair making BPL a viable and solvent utility”.

This risk also affected its desired rate reduction bond which would have addressed BPL’s legacy debt issues, a plan that would have involved adding a charge and possibly a new cost to customers’ bills in order to service the bond.

Controversy erupted in August after it was revealed that PowerSecure received a “performance bonus” of $1.1 million despite persistent customer dissatisfaction with BPL since the company was contracted in 2015.

In its discussion of risks to the execution of its business plan, PowerSecure’s document gives insight into why the American company may have felt entitled to the bonus.

“In the event that the rate reduction bonds are not underwritten or fully subscripted within the first year,” PowerSecure wrote, the company “should not be held responsible for the impact such delay or failure has on the operational performance initiatives and be entitled to the entire performance incentive fee for the first year of the (management services agreement). The same arrangement would exist for each subsequent year.”

PowerSecure planned several strategies to reduce staffing. In addition to making some employees redundant if necessary, it planned a voluntary separation strategy through which the company would have given employees a 60-day window to elect to apply for the “separate incentive programme.”

The company also planned an early retirement programme for employees “within three years of retirement.”

“Approximately 17 per cent of the employees have 27 years of service or greater, which represents $12 million of the $60 million for total compensation,” the company said.

The business plan revealed no clear agenda for embracing alternative energy forms as a means of generating power in the future, though PowerSecure said it planned to put BPL on the “path to a clear, more efficient generation fleet.”

“A wide variety of supplies including liquefied petroleum gas (LPG), liquefied natural gas (LNG), heavy fuel oil (HFO), automotive diesel oil (ADO) and solar have been analysed and will continue to receive consideration,” PowerSecure said. “The prospect of bringing LNG or LPG to the islands looks promising. However, current analysis indicates that pursuing those today may put BPL in the position of a loss leader which is misaligned with the current financial situation at BEC. Therefore, the current plan is to procure modern HFO units that can be converted to LNG. This approach preserves the capital resources of BPL and positions the Bahamas to be a leader in advancing cleaner and less costly energy supplies as the market matures.”

PowerSecure aimed to improve BPL’s reliability and performance by adding 140 megawatt of “high-efficiency HFO units” to the Clifton Pier plant.

The company also wanted to procure rental units to counter the expensive generation of power from the Blue Hills plant. PowerSecure said its analysis of an 80 MW bridge power solution showed it would create a profit of $13.5 million.

“The most expensive to repair units at Blue Hills are taken out of service first once the bridge power is online,” the company said. “The others are limited to an absolute minim, thereby limiting repairs costs. Once new generation assets are commissioned, more than 60 per cent of Blue HIlls generating capacity is retired.”

Comments

TalRussell 3 weeks, 4 days ago

Comrades! Before the 2017 General Election bell does gets rung, the red shirts government workers payroll will have grown by 4,320 bodies. Some 200 new consultants/auditors will have been engaged and paid consultancy fees of $407 million. Outside private law firms lawyers engaged will cost taxpayers $24 million by the end their governing mandate?
It appears PM Minnis and KP, may have already hired auditors which have done cost the public treasury $12 million.... all without tenders? Fox Hill Prison and the PMH will become privatised!

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BahamasForBahamians 3 weeks, 4 days ago

Lol the tribune is trying its hardest to discredit the former administration.

This article may work against them though.

If this paper was less politically biased the caption would say something like:

PLP saved 200+ jobs when BPL wanted them gone.

Eileen carron's shirt is as red as her skin after a good slap so I'm not surprised at this caption.

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B_I_D___ 3 weeks, 4 days ago

Sadly...BPL...BTC...WSC...NIB, anything that has a government involvement is heavily overstaffed. BPL SHOULD let go the excess staff...

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Craig 3 weeks, 4 days ago

Agreed. BEC is so heavily over staffed 200+ is probably on the low end on how many should be axed. The same holds true for other gov owed corps and ministries

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The_Oracle 3 weeks, 4 days ago

So, it looks like the PLP was willing to fire 200 plus un-needed workers, probably so more of them could get in on the skimming, and the FNM is scared to have them fired and so fired Power secure instead? Trying to follow the twisted logic here.........

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Well_mudda_take_sic 3 weeks, 4 days ago

.....the current plan is to procure modern HFO (heavy fuel oil) units......

You just know the greedy conniving Snake was involved in this decision in his usual under-handed (or should I say, under-the-table) way!

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ohdrap4 3 weeks, 3 days ago

he actually bears a resemblance to GOT Lord Littlefinger

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Greentea 3 weeks, 4 days ago

Didn't Minister Bannister just indicate yesterday that they would reduce the staff by 30%? How does that translate in terms of numbers? 200 or so? No news here except to see that they are following BPL's script.

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Well_mudda_take_sic 3 weeks, 4 days ago

Repost: The key players at BPL under the corrupt Christie-led PLP government at the time the Management Services Agreement with PowerSecure was negotiated and entered into were the following:

Directors:

o Nathaniel Beneby, Chairman of the Board

o Donna Smith, Deputy Chairperson

o Deepak Bhatnagar, Executive Director

o Daphne Simmons (likely related to then Financial Secretary Simmons)

o Patricia Hermanns

o Andrew Rogers

These directors appointed Jeff Wallace as the new CEO of BPL, effective immediately. Jeff Wallace had more than 35 years of utility experience and had spent the past 10 years as the Vice President of Fuel Procurement for Southern Company, where he had been responsible for managing $7 billion in fuel procurement, planning and delivery programs for 85 power plants.

Kevin Basden, previously General Manager of BEC, then assumed his new role as a Consultant/ Advisor to BPL's board of directors.

Deepak Bhatnagar, who has been leading the process of energy sector reform, served as Executive Director with responsibility for overseeing the activities of BPL to ensure that PowerSecure delivered in accordance with the business plan.

All of the individuals named above bear great responsibility for kowtowing to the political interference in BPL's business affairs by the corrupt Christie-led PLP government. Deepak Bhatnagar in particular was instrumental in doing Christie's bidding, no matter how harmful the consequences of doing so were to BPL. Unbelievably though, Minnis decided to re-appoint Deepak Bhatnagar to BPL's current board of directors!!! This decision by Minnis represents an astonishing error in judgement by our PM, one that must be corrected at the earliest possible time given all that transpired at BPL under the previous corrupt government. Deepak's relationship and involvement with Franklyn Wilson also warrants close scrutiny and, possibly, an outright full blown investigation. The same goes for Nathaniel Beneby's close relationship with Franklyn Wilson a/k/a Snake. As the most senior Bahamian banker at RBC Bahamas, Beneby had a special relationship with Snake as one of his biggest local banking clients.

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jusscool 3 weeks, 4 days ago

If BPL's powers to be had just stick to the legal plan on running this company . Instead of throwing out million's and million's of dollars to bogus companies ,ministers and buddy pals. BPL would be a thriving company today, with no need to get rid of hard working staff. This exact thing have been going on much too long now in this Bahamas . It's time for a change.

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The_Oracle 3 weeks, 3 days ago

All of these Bastards are so interconnected and mutually dependent It will take flushing them all down the drain to make any meaningful progress. Like a bowl of spaghetti, hard to tell each one apart, so tangled up together. This Deepak Bhatnagar sounds like a winner........here for the slush and pension.

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Island_King 3 weeks, 3 days ago

BPL is so overstaffed...with all that staffing one must agree that this is apart of thre problem why consumers suffers...some of these workers need to be made redundant.

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DDK 3 weeks, 3 days ago

Sadly, like most Government agencies and corporations, over-staffed with incompetents. This is something the Government MUST get a handle on if the Bahamas is to pull itself up out of the muck and mire.

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