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Bpl Board To Consider Disconnection Suspend

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Bahamas Power & Light’s (BPL) status as “a broke company” means it will be challenged to suspend customer disconnections when its board meets today to discuss the issue.

Desmond Bannister, minister of works, confirmed to Tribune Business that the government-appointed board will consider whether it can follow in the Water & Sewerage Corporation’s foot-steps by suspending all delinquent customer disconnections to ease the economic fall-out from the coronavirus pandemic.

Yet the minister, who has responsibility for the state-owned energy monopoly, said the $100m-plus it is owed on a monthly basis by delinquent customers means it is “challenged” to provide any relief in the face of the economic downturn set to hit The Bahamas.

“BPL is going to consider what they can do in the circumstances,” Mr Bannister said of today’s Board meeting. “One of the challenges is that BPL is a broke company. It carries receivables of $100m a month.

“It’s a little different from the Water & Sewerage Corporation. Even though the Water & Sewerage Corporation operates at a loss, BPL is in a vastly different situation. They’re [the Board] going to look and see what is the best they can do. The board will meet tomorrow [today] and make some considerations as to how they can balance the challenges. They’re going to consider it [suspending disconnections’.”

Adrian Gibson, the Water & Sewerage Corporation’s executive chairman, announced via social media late last week that all planned disconnections of its delinquent customers cease with immediate effect.

He wrote: “Given the impact of the coronavirus on the world, and the importance of potable water in combating this disease, it is of the utmost importance that residents have access to fresh water. Our people should not, and ought not, to be without water.

“As such, executive chairman Adrian Gibson has directed the immediate cessation of any and all intended or proposed disconnection exercises. No Water & Sewerage Corporation staff are authorised to disconnect any home/building at this time. All disconnections are halted until further notice.”

The Water & Sewerage Corporation’s disconnection suspension comes even though it is selling water below cost, while its main BISX-listed supplier yesterday revealed that the sums it owes its Bahamian subsidiary have again ballooned to $18.2m at end-February 2020.

Consolidated Water, in its form 10-K filing with the Securities & Exchange Commission (SEC), blamed Hurricane Dorian for the increase in accounts receivables owed to it. The end-February figure represented a partial decline on the $18.4m outstanding at year-end 2019, with more than three-quarters of that sum categorised as delinquent - meaning it is more than 90 days past due.

“Consolidated Water Bahamas’ accounts receivable balances due from the Water and Sewerage Corporation amounted to $18.4m as of December 31, 2019, and $17.6m as of December 31, 2018,” the company’s filing said.

“Approximately 76 percent of the December 31, 2019, accounts receivable balance was delinquent as of that date. The delay in collecting these accounts receivable has adversely impacted the liquidity of this subsidiary.”

Consolidated Water added: “Historically, Consolidated Water Bahamas has experienced delays in collecting its accounts receivable from the Water and Sewerage Corporation. When these delays occur, we hold discussions and meetings with representatives of the WSC and The Bahamas government, and as a result, payment schedules are developed for Water and Sewerage Corporation’s delinquent accounts receivable.

“All previous delinquent accounts receivable from the Water and Sewerage Corporation were eventually paid in full. Based upon this payment history,Consolidated Water Bahamas has never been required to provide an allowance for doubtful accounts for any of its accounts receivable, despite the periodic accumulation of significant delinquent balances.

“As of December 31, 2019, we have not provided an allowance for Consolidated Water Bahamas’ accounts receivable from the Water and Sewerage Corporation. We believe the delays we have experienced in collecting Consolidated Water Bahamas’ receivables [are] due to the impact of Hurricane Dorian, which devastated the northern Bahamas in September 2019.”

Meanwhile, Mr Bannister said yesterday: “As you and I know, the Water and Sewerage Corporation provides water at a loss. The tariff has needed an increase for years. All of us buy water at less than it costs to produce. It’s an unsustainable model, but the Government subsidies Water and Sewerage Corporation so that we can have water as it’s critical to our health.

“BPL is a broke company, and has hundreds of millions of dollars in debt. It has an independent Board, even though the Government is the major shareholder, that makes decisions and comes to the Government as needed. They’ll consider what’s in the best interests of the country and the Bahamian people and make some decisions which they will discuss with us.

“Whatever they can do within the parameters they have to work with, bearing in mind they are completely broke, they will do.”

Mr Bannister said BPL’s funding will still “be very tight” even once it completes its planned bond refinancing, which has been delayed to allow amendments to the legislation that supports it.

“It’s not going to be a situation where they have a whole lot of room,” he added, while assuring that “huge interest” remains in BPL’s refinancing despite the delays and the coronavirus outbreak.

Comments

observer2 3 months, 3 weeks ago

What happen wit de $600 million rate reduction bond from Wall Street. Stock market done crash so I guess ain no money comin in.

And Ain no use me payin my bill after 40 years because ain no body else ga pay.

I broke broke.

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tetelestai 3 months, 2 weeks ago

Would it kill you, observer2, to actually use proper grammar when you comment? The nonsense that you have posted above is indicative of our D-grade education sector. Or, do you think you are being "down with the home boys", when you write such slop? Geez.

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TalRussell 3 months, 3 weeks ago

With each government pronouncement of pending doom escalating around every street corner and jibe - - it will grow more difficult to defend the value of the Colony's dollar.
Should we at US par dollar - takes a tumble - the mockers those hoarding rolls toilet-papers may yet have to switch their mocking focus over to the once privileged comrade hoarders of most we Colony's dollars in circulation. This is much too serious of a matter to make up. Just, shouldn't.

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SP 3 months, 3 weeks ago

One of the reasons the Water and Sewerage Corporation provides water at a loss is because of standpipes (pumps) in low-income areas dispensing unlimited free water, which are allowed to be mindbogglingly abused by people that can be seen either leaving the faucet taps running and/or incurring huge wastage while filling too small-mouthed containers and worst of all Haitians collecting 50-gallon drums of free potable water at 3 to 4 AM which they then bottle and sell! to an unsuspecting public.

Mr. Bannister needs to get off his bad foot and begin enforcing the laws of the country!!!!!!!

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observer2 3 months, 3 weeks ago

I can now use the money I saved from not paying for light and water and use it in the web shop, after that I go to the liquor store to get tune up, then church on Sunday and I hear dey legalizing marry Jane.

Wit all dis free stuff who needs to work?

All I know how to do is my safe government job. Where I don’t have to do anything anymore because we need to close down.

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concerned799 3 months, 3 weeks ago

If the government writes a blank cheque to keep covering BPL if no one pays their bill, where do they get the money from?

A second Customers who Do Not Pay Subsidy Bond fee attached to every BEC bill in the future?!

If three is to be any integrity to the idea we are going to use less electricity and burn less fossil fuels and keep the 1:1 dollar peg, people just have to pay their electrcity bill.

If its too much, then perhaps we need to think about bankruptcy for all BEC/BPL debts and then a private owner can start over with a clean balance sheet to keep costs affordable. This can not go on. The end customer can not soak up endless "bonds" to cover things of the past.

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Well_mudda_take_sic 3 months, 2 weeks ago

The moral hazard of years of 'vote buying' by our corrupt politicians is finally coming home to roost in a most vicious way because there are now so few left to pay the bills and debt racked up by government.

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