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Split Sparked By Row Over Power Generation

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Bahamas Power & Light’s (BPL) Board split was sparked by disputes over generation technology for the new, low-cost power plant and executive appointments, Tribune Business can reveal.

The increasingly bitter row, which led to the former Board’s dissolution after it fractured into two factions, pitted former chairman, Darnell Osborne, and fellow directors Nicola Thompson and Nick Dean, against chief executive Whitney Heastie and ex-vice chairman, Patrick Rollins.

While the latter two were backed by Desmond Bannister, the minister of works who has responsibility for BPL, Mrs Osborne and her group found an ally in the energy monopoly’s two unions - the Bahamas Electrical Workers Union (BEWU) and Bahamas Electrical Utility Managerial Union (BEUMU).

All parties to the dispute have danced around the real reasons for the debacle, but Tribune Business can disclose that Mrs Osborne was infuriated by Mr Bannister’s decision to appoint Mr Rollins as an executive director.

Mr Bannister, in explaining the move to Tribune Business in late July, said: “We thought the new chief executive needed some assistance in certain areas, and guidance from somebody with the kind of expertise Mr Rollins has. Mr Rollins is an engineer by training, and former fraud control manager at BTC.

“He was the most appropriate person, and someone we have tremendous confidence in for critical control areas that are very important to BPL, particularly now.” Mr Rollins remains on the BPL Board as vice-chair.

But Mrs Osborne is understood to have viewed the move, which gave BPL’s vice-chairman a role in the utility’s management, as a snub and attempt by the Minister to undermine her authority as chairman.

This was brought home to Tribune Business when it asked her about Mr Rollins’ new role. Mrs Osborne responded tersely that the appointment was neither the decision of herself nor the Board, and that this newspaper needed to contact Mr Bannister about the matter.

Mrs Osborne and her former Board allies, in their weekend statement, were likely referring to Mr Rollins’ appointment and Mr Bannister’s involvement when they said “interference by the political directorate in a board whose very existence was chartered to be devoid of such activities” lay at the root of the dispute.

The Boardroom rift then deepened, and hit the point of no return, while threatening to undermine and derail the prospect of lower cost, more reliable energy for New Providence residents and businesses from the proposed new power plant.

While Shell North America was selected as the preferred bidder to construct, own and operate a 270 Mega Watt (MW) multi-fuel plant at Clifton Pier, negotiations with BPL to formalise commercial terms via a Memorandum of Understanding (MoU) and Power Purchase Agreement (PPA) became embroiled in the Board battle.

The infighting escalated over the selection of generation technology for the proposed new power plant, Tribune Business can reveal, and whether it should be Shell or BPL who had responsibility for this.

This newspaper understands that while one Board faction was vehemently opposed to General Electric (GE) supplying the turbines for the Shell plant, and favoured either Wartsila/Burmeister (BWSC) and MAN Diesel, its rival took the opposing view.

Tribune Business previously revealed that GE, the leading multinational and electricity turbine manufacturer, was complaining that it “cannot get a fair hearing” and was being shut-out of the process to supply both the new Clifton plant and short-term generation.

It is understood that GE has taken its complaints as high as the Trump administration’s US State Department, having offered to provide 80 MW of short-term generation to BPL to “bridge the gap” between now and when the new Shell power plant comes on stream.

Tribune Business can reveal that GE and its Bahamian partner, Providence Energy Partners, an affiliate of the same-name investment bank headed by Kenwood Kerr, touted their offer as saving BPL and its customers around $75m per annum through reduced fuel costs alone.

And, to sweeten the pot, GE offered a $110m funding facility to upgrade BPL’s transmission and distribution infrastructure. But Mr Heastie, in an interview with Tribune Business last month, dismissed the GE short-term offer as “making no economic sense” because the narrow three-year timeline to the new power plant’s completion made it impossible to generate a viable investment return.

He also suggested that GE’s aeroderivative gas turbine engines do not work well in hot and humid environments such as the Bahamas - a charge GE is known to vehemently dispute, and it has provided evidence to refute Mr Heastie’s position.

The Board dispute also resulted in the leaking of material, such as the Bahamas Chamber of Commerce and unions’ letters, as one faction sought to undermine the other by calling into question the process used to select Shell as the preferred bidder.

Messrs Bannister and Heastie have said a review by Ernst & Young (EY), the accountants, largely gave the process a clean bill of health, but its contents have yet to be revealed publicly as a process designed to lower the long-standing energy burden borne by the Bahamian people became caught in the crossfire.

Mrs Osborne’s group also received backing from BPL’s two unions, which were unhappy with Mr Heastie’s efforts to transform the utility’s management and culture by bringing in outsiders as consultants and managers. They also criticised some appointments for having connections to Sancon Consulting, the entity that advised on the process that ultimately selected Shell.

“For the record, the union have no problem with Darnell Osborne becoming chairman again because she has proven to us that her heart is for the employees of BPL and the public,” one BEWU executive told Tribune Business.

“She really wanted to make electricity more affordable and reliable for the Bahamas, but was met with a lot of resistance from others at her level. Asking the Board to resign was a good thing because the in-house fighting was affecting all staff and had employee morale very low at BPL.

Comments

ThisIsOurs 2 months, 3 weeks ago

"#Tribune Business previously revealed that GE, the leading multinational and electricity turbine manufacturer, was complaining that it “cannot get a fair hearing” and was being shut-out of the process to supply both the new Clifton plant and short-term generation.

It is understood that GE has taken its complaints as high as the Trump administration’s US State Department, having offered to provide 80 MW of short-term generation to BPL to “bridge the gap” between now and when the new Shell power plant comes on stream."

This sound like a replay of the Fred Ramsey bribery case

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concernedcitizen 2 months, 3 weeks ago

If there is crookedness in the bidding it will come out ,,it always does...Now for the love of all that is good privatize it already ,like liberty w/ Btc and Aliv ..Get the government both PLP or FNM out of it .We have had equal opportunity crooks in both parties ,,The previous power sesure deal reeked . Calling on Trumps state department is a bit of a laugh .They rolled back the Obama protections that made the energy companies have to disclose expenses and political contributions in foreign nations ,ie bribes

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Well_mudda_take_sic 2 months, 3 weeks ago

Repost: Osborne's gonna have to say a whole lot more than she has so far with all that's being said about her behind her back. She's clearly the targeted scapegoat so even what's left of her reputation is being torn to shreds by the very same politicos she thought she could trust and who are now telling her to clam up and say no more or else. The other side continues to make minced meat of what remains of her tattered reputation in order to save their own hides. Frankly she has very little to lose by telling all there is to tell in as much sordid detail as possible. With all that's happened she can't possibly owe a fiduciary duty of silence to BPL or anyone else for that matter.

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BahamasForBahamians 2 months, 3 weeks ago

I hope Darnell opens her mouth and exposes who stole the millions from BPL last year.

Her FNM ally Elma Campbell's son Che who was formerly charged may no longer have Darnell's silence to assist in getting off this one after this internal FNM fall out.

See this article fore more on Che Chase and his role in the BEC millions going million once the FNM came to power.

This is the results from the 2007 election with his mom, Elma Campbell running for the FNM

http://www.thebahamasweekly.com/publi...">http://www.thebahamasweekly.com/publi...

SPILL THE BEANS DARNELL.. YOU COULD HURT DESSY THEM WAY MORE THAN THEY COURT HURT YOU.

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Craig 2 months, 3 weeks ago

“Mr Bannister, in explaining the move to Tribune Business in late July, said: “We thought the new chief executive needed some assistance in certain areas, and guidance from somebody with the kind of expertise Mr Rollins has. Mr Rollins is an engineer by training, and former fraud control manager at BTC”. So what is all this expertise Banister is touting? Surely it’s much much more than some engineering training and experience in fraud control. Sounds bogus to me.

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Well_mudda_take_sic 2 months, 3 weeks ago

Stay away from GE for sure....and the same applies to anything to do with Kenwood Kerr. But who are the unnecessary Bahamian intermediaries who stand to get filthy rich off of the Shell North America deal?

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Craig 2 months, 3 weeks ago

Agreed there is no need for Bahamian intermediaries. They serve no useful purpose other than to themselves, to the tune of millions. When are we going to stop this nonsense in this country?

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Bahamianbychoice 2 months, 3 weeks ago

I agree I hope Mrs. Osbourne spills the beans!!! Along with Mr. Dean/Mrs. Thompson. I hear also the "beans" are held by high ranking BPL executives...so lets see how Bannister spins this now!!! The boldness of all of this is not isolated to just the board level..so lets just see what the MOW "officially" has to say....remember his friend Rollins, who is the now Executive Director at BPL, sat on the Nassau Flight Services Board under the last FNM government....they had to order a forensic audit on that board.....no wonder Mrs. Osborne didn't want him any where around!!!! I agree... privatize!!!

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DDK 2 months, 3 weeks ago

Years and years of p--- poor management, interference and corruption on the part of both the PLP and the FNM Governments and the BEC unions have led to this ungodly mess. While privatization does seem to be the answer do we really want our electric utility in the hands of foreigners? Where is our Government leadership on this ridiculous situation? U.S. State Department? Come on!

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BahamasForBahamians 2 months, 3 weeks ago

Do not privatize while Holowesko is around (Stephen Holowesko is now Deputy Chair), it'll end up like BTC..

Mark Holowesko, his brother, as a major shareholder in Templeton was also a shareholder in CWC's holding company and benefitted through the FNM's rank give away of BTC to CWC - a deal that has proven to improve nothing at the company and increased the amount of profits leaving our country!

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BahamaPundit 2 months, 3 weeks ago

90% of corruption in the Bahamas is due to Bahamian intermediaries. This needs to stop. The Government of the Bahamas is owned by the people of the Bahamas, so these middlemen are stealing from us!!! No more Bahamian intermediaries. Let the Bahamian people get value for their dollar!!!

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ThisIsOurs 2 months, 3 weeks ago

What a mess. This is absolutely incredible for a govt that came to office with an overwhelming mandate and a pledge of transparency and zero corruption. . Minnis flying all around trying to convince people to support vat after he already pass it, holding silly ten minute meetings about fridge and stove and everything falling apart around him. What kind of CEO would keep their job after all this. We don't need to give anybody any more time to assess them, it's clear that the more time passes the bigger the foobars get.

Also, telling us she was asked to resign for getting her makeup done is ridiculous. And if it's true that it was for YOUR photo shoot and YOUR assessment that she needed additional security, I cry shame on the minister. Is only you and Dr Sands in there with sense, do better

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BahamasForBahamians 2 months, 3 weeks ago

He's on track to bump Christie off the title of worst PM ever.

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