Published On:Wednesday, May 12, 2010

By NEIL HARTNELL

Tribune Business Editor

GRAND Bahama Power Company's outage woes stem from the decision to "hive off" the utility from Port Authority control, the ex-head of the island's Chamber of Commerce said yesterday, with "the profit motive" superior to providing a reliable power supply.

Christopher Lowe, commenting on the electricity outages that plagued Freeport and Grand Bahama throughout much of last week, bringing commerce to a standstill, told Tribune Business: "This all stems from the fact that it [Grand Bahama Power] used to the responsibility of the Port Authority/

"I suppose this is par for the course when the profit motive becomes the primary concern, and a reasonable, decent electricity supply is secondary to that.

"It was never designed to make a profit. It was designed to run itself, pay for itself and be there. It was the Port Authority's responsibility. This stems from 15 years ago when Edward hived it off and sold it off. It was an asset of the Port, but has been hived off for personal profit. Yet the Hawksbill Creek Agreement was not about profit but developing a city."

Grand Bahama Power Company was spun-off from the Grand Bahama Port Authority in the mid-1990s by the late Edward St George and Sir Jack Hayward. They ultimately sold a 55 per cent controlling interest in the firm to Southern Electric (later Mirant), with the remaining 45 per cent equity split between Mr St George and Bahamian investors to the tune of 25/20 via BISX-listed ICD Utilities.

Mirant eventually sold its controlling interest - and all its Caribbean electricity operations - to Japanese giant Marubeni. The latter struck a partnership with Taqa, the Dubai-based power generator, that has left both with the current, controlling joint venture interest in Grand Bahama Power Company.

In addition, Lady Henrietta St George sold the 25 per cent ownership interest held by her late husband via his ICD Utilities stake to Canadian power producer, Emera, for $41 million back in 2008.

Thus three leading electricity producers, with global operations, are in charge at Grand Bahama Power Company at a time when it was forced to place its customers on a 'rolling' load shedding schedule - interrupting power supply to consumers and businesses for hours at a time last week. The company blamed its problems on the breakdown of several generation units, and the difficulty in accessing spares/maintenance parts due to its previous supplier going out of business.

Mr Lowe, meanwhile, told Tribune Business that the ownership changes had effectively converted Grand Bahama Power Company into "nothing more than an ordinary licensee [of the Port Authority], and a pretty pathetic one at that.

"This is what happens when you take an essential service and convert it into an ordinary licensee of the Port Authority with a profit motive as its primary concern. They're ranking up there with BEC these days."

He joked that while Emera, one of the owners of Grand Bahama Power Company, had been engaged by the Government to assess how best to implement recommendations to revive the Bahamas Electricity Corporation (BEC), "it appears that BEC may be advising Emera" given the performance in Freeport last week.

While all private sector entities had a right and need to generate profits, Mr Lowe said that in Grand Bahama Power Company's case this should "not come at the expense of maintenance, reliability and ability to perform the service".

As to the impact of last week's power outages, which cost businesses in Freeport and wider Grand Bahama significant sums of money, the former Chamber president added: "Obviously, we're going to be spending a lot of money on diesel fuel to do their [the power company's] job for them. But the majority of people do not have generation capacity to keep the lights on, so it's devastating for them."