By Rashad Rolle
Tribune Staff Reporter
PRIME Minister Dr Hubert Minnis admitted yesterday his administration has made mistakes with the $5.5 billion Oban Energies project.
But following his admission in his much-awaited mid-budget speech critics said key questions about the oil refinery and storage project remain unanswered.
Dr Minnis, pictured, said the beneficial owner of Oban Energies LLC is the K Family Irrevocable Trust. However, he gave no details about the people behind this trust and scant details about it could be obtained online yesterday. In addition, although funding concerns were cited as the chief reason the long-mooted project went nowhere under the last Ingraham administration, Dr Minnis provided no proof of funding nor did he mention the issue yesterday.
However, he confirmed that Peter Krieger, the company’s infamous non-executive chairman, resigned effective March 1, 2018.
He said Mr Krieger has no beneficial interest in the K Family Irrevocable Trust. The Tribune understands, however, Mr Krieger is the husband of the granddaughter of one of the beneficial owners in Oban Energies, and he is said to have owed his role in the project to that connection.
One month after questions were first raised over the people fronting Oban, followed by a ceremonial Heads of Agreement signing that plunged the administration into one of the most sustained controversies of its term, Dr Minnis confessed to some mistakes.
“The Oban Energies LLC project was intended to bring growth and jobs to Grand Bahama,” he said. “In our haste to boost the economy of Grand Bahama, we made a number of mis-steps in the Oban Energies Project. While our heart was in the right place, these mis-steps should not have happened. We must, we can, and we will do better.”
Dr Minnis said “more comprehensive due diligence” should have been done and “wider environmental consultation” should have been engaged.
“Mr Satpal Dhunna, President of Oban Energies LLC, arrived in The Bahamas on 6th February with the expectation to sign the Heads of Agreement on the 7th February,” he said. “The document was not ready for signature, so he remained in The Bahamas until 10th February, at which time he signed the agreement and then left the country to attend to other business. The Heads of Agreement was subsequently signed by the Secretary to the Cabinet. In recognition of its promise to keep Bahamians informed, the government arranged for a ceremonial signing on the 19th February, 2018. We accept that we should have clearly indicated on the 19th February, 2018, that it was a ceremonial signing. It should be noted that it is not unusual for a Heads of Agreement to be signed before a ceremonial signing so as to ensure that there is a firm agreement between the various parties. It is unfortunate that at the ceremonial signing Mr. Peter Krieger wrote the name of Satpal Dhunna whose name was printed under the signature line in the space provided for the signature of Mr Dhunna. He should have noted that he was signing on behalf of Mr Dhunna and signed his name as the authorized representative of the K Family Irrevocable Trust on the ceremonial document.”
Although Mr Dhunna signed the Heads of Agreement on February 10, Dr Minnis said the administration made the “effective date of the Heads of Agreement the 19th of February to conform with the public ceremonial signing.”
The Bahamas National Trust (BNT) has announced its opposition to the project. Critics have knocked a clause in the Heads of Agreement that prohibits the administration from terminating the deal regardless of what an environmental impact assessment (EIA) concludes.
Dr Minnis said yesterday: “The Grand Bahama project must go hand in hand with the protection of our environment and the conservation of our natural resources. Accordingly, the government will do a more comprehensive review of this matter. This review will include our due diligence process at BIA and all environmental and land use issues, including laws relating to environmental impact assessments and consultation processes, including with residents of Grand Bahama, in particular East Grand Bahama.”
Dr Minnis noted the Heads of Agreement empowers the minister responsible for the environment to penalise the developer for environmental infractions and to force any equipment that causes an infraction to be discontinued. He did not address critics’ concern that with the absence of an Environmental Protection Act in the country, the government lacks the statutory power to enforce such provisions in the agreement.
Dr Minnis portrayed the Progressive Liberal Party (PLP) as a hypocritical critic of the Oban Energies project.
He noted Mr Krieger was the chairman and CEO of the company when it came before the National Economic Council (NEC) under the Christie administration.
An approval in principle was subsequently signed on November 15, 2016.
“Most cabinet ministers were present at that NEC meeting,” Dr Minnis said, “including members who are now the opposition in both houses of Parliament, here and in the Senate.”
He said on March 30, 2017, a second proposed Heads of Agreement was forwarded to the Christie administration for review, but was not executed.
“It should be noted that in this Heads of Agreement, Mr Peter Krieger was to sign on behalf of Oban Energies LLC,” he said. “Note that the PLP agreed to the development, despite the hypocrisy they are now displaying.”
Yesterday, the Bahamas Information Services (BIS) and the Free National Movement (FNM) circulated videos of Mr Krieger and former Grand Bahama Minister Dr Michael Darville surveying “the original site” for the proposed development in 2016.
“And yet the Member of Parliament for Engerston referred to the principals of Oban Energies LLC as a cornucopia of crooks,” Dr Minnis said in parliament.
The PLP, however, emphasized the Christie administration never signed a Heads of Agreement with the company, unlike the present administration. Opposition members said it was clear future approval of the project would be subject to due diligence by various government departments under its watch.
Opposition Leader Philip “Brave” Davis yesterday called Dr Minnis’ Oban Energies address “insipid,” “thin” and “weak.”
“Though he was admitting errors and missteps, he has yet to come to grips with the mistakes he has made in connection with this matter,” he said. “I wanted to intervene to seek some clarification on the beneficial owner. He said it is owned by the K (Family Irrevocable) Trust. Who are the trustees of the K (Family Irrevocable) Trust? Who are the beneficiaries of the K (Family Irrevocable) Trust and (do) they still have the financial capacity to carry it forward?”
Mr Davis said he could not recall working with that trust in 2016.
He called Dr Minnis’ discussion of the PLP’s role in the project “irrelevant”.
The work of the BIA has come under scrutiny amid the controversy. Dr Minnis said a consultant has since been selected to advise the government on the BIA’s work.
Among other things, he said there will be a review of the investment policy framework of the country, a streamlining of the BIA’s operational methods and a redesigning of the current organisational structure of the agency.
The consultancy will be financed through the Inter-American Development Bank’s Public Financial Management/Performance Monitoring Reform project and will endure for six months beginning on April 4.