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‘Board Sets Exec Salaries, Not Govt’

Opposition leader Philip ‘Brave’ Davis.

Opposition leader Philip ‘Brave’ Davis.

By RASHAD ROLLE

Tribune Staff Reporter

rrolle@tribunemedia.net

BAHAMAS Power and Light’s former board of directors determined the remuneration packages of PowerSecure’s senior BPL executives, Official Opposition Leader Philip “Brave” Davis said yesterday. 

He said the Christie administration didn’t adjust the salaries of the executives because doing so would have been seen as “political interference.”

His statement came after Works Minister Desmond Bannister revealed in Parliament Wednesday that some senior executives of BPL made more in a month than parliamentarians make in a year.

Former CEO Pamela Hill, fired by BPL in August, was paid $25,000 a month, received $6,000 a month in housing benefits and had monthly benefits of $3,833.33.

Asked about the payments which some Bahamians have found inordinate, Mr Davis said: “Money paid to executives was a matter for the board.” 

His administration accepted the board’s remuneration decisions, he said, because the administration didn’t “interfere with that” because “If you do, they say it’s political interference”.

At the same time, Mr Davis said the former administration directed BPL’s board to seek ways to cut costs that didn’t include going through with PowerSecure’s plan to fire employees. PowerSecure’s desire to reduce BPL’s staff by more than 200 workers, a revelation Mr Bannister made Wednesday, was highlighted in the company’s business plan.

“(PowerSecure) looked at the corporation, identified what they saw as challenges that the corporation had to deal with in order to be successful at meeting its objectives of introducing reliable, affordable prices to the consumer,” Mr Davis said. “One thing identified was the corporation could have done better if you were to separate a number of employees. “That was not a policy of the government and so, in fact, the board of directors was directed to find a path to avoid layoffs or redundancies or separation.”

Mr Davis claimed the board achieved this “by taking into account savings as a result of the cost drop of prices of oil.”

Mr Davis denied PowerSecure failed because his administration interfered with its work. In addition to planned cost-cutting measures like firing employees, PowerSecure believed a $600 million rate reduction bond (RRB) to address BPL’s legacy debt issues was central to reforming the company, warning that a delay in going forward with the RRB would prevent operational improvements at BPL. PowerSecure also wanted to hike rates. 

Despite this, the Christie administration never proceeded with the RRB and said no to the company’s rate plan.

Mr Davis said these plans were not rejected by the former administration but were “just postponed.”

He defended their PowerSecure arrangement, calling it “considered.”

The company, he said, was chosen to manage BPL after a process that involved recommendations from a task force of both “private and public officials as well as the advisory firm KPMG.”

“That RFP attracted a number of energy and power companies…and the companies shortlisted were China State Construction Engineering in partnership with SouthPort energy and Ozado Partners, InterEnergy Holdings, and PowerSecure ING,” he said. “The task force negotiated with each of the bidders and found that the best competing RFP was offered by PowerSecure. The $900,000 mentioned by Desmond Bannister (as payment for the business plan PowerSecure) was a transition fee which was far less than what was proposed by the other bidders, including $1.6m in one instance and $5.8m in the other. In respect to the management fees, an analysis by the task force showed that PowerSecure’s fees over the period of the five years under the management services agreement (MSA) was $16m less in expenses than one of the bidders and $26m less than the other bidders.”

“Right now, the hunter is telling the story,” Mr Davis said. 

He called on the Minnis administration to disclose the list of PowerSecure’s alleged MSA breaches and to inform Bahamians of the consequences of the business separation between PowerSecure and the government. 

The ouster of PowerSecure is the latest blow to the legacy of the Christie administration.

Reforming the Bahamas Electricity Corporation by hiring the American company was often touted by that administration as an example of the “heavy lifting” being done.

This, however, is not the first time the administration’s attempts to fix a long-standing national issue has borne no long-lasting fruit.

Although in 2014 it contracted Renew Bahamas to remediate the New Providence Landfill, that company pulled out of the contract two years after it was signed, leaving the country with a landfill that remains a cause for concern. 

Comments

Well_mudda_take_sic 3 weeks, 3 days ago

Repost: This short pudgy imbecile with his short stubby grubby dirty yellow sticky fingers has somehow managed to forget that he was a senior member of the most corrupt cabinet in the history of our country. Davis played an instrumental role in suppressing law enforcement while he and his fellow cabinet members under the corrupt Christie-led PLP government were lining their pockets and the pockets of their family members, business cronies and political friends. The directors they appointed to the boards of government owned and/or controlled entities, like BPL, allowed themselves to become mere puppets who all too easily kowtowed to the misconduct and fraudulent activities of the more senior Christie cabinet ministers, and Davis was certainly one of those corrupt cabinet ministers.

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TalRussell 3 weeks, 3 days ago

Comrades! The PLP, shouldn't get too comfortable as the Official Opposition Party.
I cannot believe the prospects are high for getting this band old-guard PLP's back together to prepare the PLP to even remain Her Majesty's Official Opposition Party - much less towards governing victory come the 2022 General Election. The PLP should be weary of contesting any of the likely to happen By elections that pop's up between now and 2022.

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sheeprunner12 3 weeks, 3 days ago

How did these corporation Board pay scales get so out of whack???? ....... BPL CEO can make over $400K a year ....... BTC CEO makes?????? ......... Well, how much does the other CEOs make???? like Bahamasair, NIB, BOB, Water & Sewerage, etc. ....... a civil servant who is Director in charge of thousands of employees makes just $70,000 ....... a Commissioner of Police about the same ...... The PM makes about $120,000 ........ How can anyone justify this BEC salary?????

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DDK 3 weeks, 3 days ago

Convoluted AND corrupt. Obviously the Public was meant to be so baffled by all the levels of murky b.s. that the outrageous asininity of the deal would remain obscured.

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proudloudandfnm 3 weeks, 3 days ago

PLP was gettin huge kickbacks on this deal...

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DreamerX 3 weeks, 3 days ago

I think the kick backs aren't an issue unless we aoply context. Not that its justified because it was status quo. But, we kept electing the same group of old folk expecting change. I didn't vote for the them, admittedly. While they appear to be making moves, they haven't brought any harvest. After two years in office I want reliable status report from the benchmark left by the plp the changes or policies and agreements approved by parliament to remedy.

But for now, I see the same swagger of attempt to change while onboarding many politically aligned consultants to replace the old politically aligned folk. In my work, I see some first hand that issues are on moving continuous without even tone at the top or board policies initiated to address the highly publicized criticisms of the plp. Not benefiting from and government party influences, I just hope we get something from this spectacle.

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ThisIsOurs 3 weeks, 3 days ago

He's right once again. The board does set the salary for the CEO, the board identifies what they need in a CEO and the board hires the CEO.

You can put in all of the fancy processes and procedures you want, pass all kinds of fiscal responsibility acts to say look what we doing. If you put the wrong unethical, inexperienced, tiefin, characterless, financially indebted people in charge of the money and the contracts...nothing will change.

I've seen two types of appointees over the past five years inclusive of administration change, book smart people who won't make a fuss and will do whatever you tell them, you basically using their "good name", then you have the sharks who will facilitate the wheeling and dealing.

Watch the PEOPLE they put in charge, not the rules and processes they put in place. People first, processes second.

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sheeprunner12 3 weeks, 3 days ago

I hear you ....... but these are public boards who get public stipends to run public corporations using public funds to pay personnel who must be accountable to the public/citizens ........ but, who cares???????

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ThisIsOurs 3 weeks, 3 days ago

I'm on your side

On a purely technical point, I'm saying "he's right", the board does set the salary for the CEO. But my bigger point was who are the "people" on the board? If you place the wrong people, they will abuse the process either through ignorance or direct manipulation. The "process" becomes meaningless no matter how Lilly white and well intentioned the process is.

I am making an even greater point, the appointments made POST election, leave us open to these very same abuses. More open in fact, because who believes Sir Lancelot is going to crook them? Sir Lancelot will raid the entire castle and have the gold stored in a land far far away before Merlin can wave his wand once.

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sheeprunner12 3 weeks, 2 days ago

Sooooo, how much does each BPL/BEC Board member get paid to sit on this Board??? .......... Is this info published anywhere???? ........ The Government has set up 104 Boards ....... How much do these Boards cost the country??? Or ...... is there some $$$$$$$catch for sitting on these Boards??????

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