By RASHAD ROLLE
Tribune Staff Reporter
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.