Published On:Friday, June 18, 2010

By NEIL HARTNELL

Tribune Business Editor

THE Bahamas Electricity Corporation (BEC) has been accused of behaving like "a runaway train" over public consultation and permitting for the $105 million Wilson City power plant, an attorney for the project's opponents questioning whether the Government would have allowed a private developer to proceed in a similar fashion.

Fred Smith QC, attorney and partner at Callender's & Co, in trial submissions filed with, and read out, in the Supreme Court in Freeport, said all key decisions taken in relation to the new Abaco power plant's construction had been "taken in secret" - especially in autumn 2009, when construction began in earnest.

In addition, Mr Smith alleged that BEC had failed to consult interested parties on the planned use of Bunker C fuel at Wilson City, despite the fact that consultants hired by his clients, Responsible Development for Abaco (RDA), had calculated it would cost an extra $3.823 million per annum for the state-owned Corporation to use this fuel as opposed to Automotive Diesel Oil (ADO).

"The NTH report comparing the cost of using Bunker C fuel at the Wilson City power plant with diesel fuel costs concludes that it will cost an extra $3.823 million per year in capital and operating costs if the plant uses Bunker C fuel, something that would make this fuel far more expensive than diesel," Mr Smith alleged.

"While diesel would be more expensive to purchase, costing more than $21 million a year, the additional capital and operating costs, combined with the need to desulpherise the Bunker C exhaust gases, would make the latter anywhere from $300,000 to $1.1 million more expensive per annum.

"The Bunker C Report also makes clear that once the minimum necessary emissions control systems are in place, Bunker C actually turns out to be more expensive than diesel. The only way in which Bunker C is cheaper is if corners are cut on environmental standards."

Mr Smith alleged that BEC had never produced estimates to show why Bunker C was the best cost option, adding that proper consultation with his clients and other Abaco stakeholders would have "fully explored" this issue and allowed the best choice to be made.

Referring at an affidavit submitted by Kermit McCartney, BEC's Family Island project manager, on March 30, 2010, Mr Smith alleged that the power producer had made a complete u-turn and was now proposing to use ADO as Wilson City's fuel rather than Bunker C.

Based on this evidence, the QC claimed: "It is apparent that BEC is making fundamental decisions affecting this plant on the hoof." Acknowledging that his clients were not unhappy about BEC's volte face, Mr Smith added: "Without looking a gift horse in the mouth, however, this seemingly arbitrary decision making process is precisely what the applicants complain of.

"They cannot be sure that without protective court orders BEC may revert to Heavy Fuel Oil. In addition, this is not simply a BEC decision. It is one which must be permitted by the relevant statutory authority."

Meanwhile, Mr Smith alleged that BEC and the Government had presented the power plant project as a "done deal" in the only Town Meeting held on it, in September 2009. He claimed they then "scurried away" to obtain the various construction approvals and permits required after being unable to confirm publicly that all these were in place, and after building work had already begun.

To further support his allegation "that BEC is a runaway train", Mr Smith claimed that the Corporation was using two real estate parcels for the project - one 50 acres in size, another 25 acres - despite this land not being formally granted to it by the Crown respectively. The larger land parcel is supposed to have been conveyed to it, the latter leased.

"Despite the appearance of attempted compliance with regulatory authorities, despite the appearance of regulatory authorities purporting to exercise some supervision and control, BEC is proceeding with construction and operation of the plant in complete disregard of due process or even attempted observance of attempted regulatory control or oversight," Mr Smith alleged.

"Unfortunately, because this is a public corporation the relevant authorities have turned a blind eye to this behaviour. One only has to posit the question: "If BEC were not a public corporation doing the will of the executive branch of government, would all of the relevant authorities permit a private company to embark upon and construct and proceed to operate a project in this fashion?'"

Mr Smith alleged that the Wilson City plant was being constructed adjacent to a community that held "the largest concentration of renewable energy users in the Bahamas", and questioned whether BEC had ever seriously explored the use of renewable energy on Abaco as an alternative.

The trial, which is being held before Justice Hartman Longley, has been adjourned so that attorneys acting for BEC and the Government can file revised trial submissions by June 15, 2010. The hearings are due to resume on July 9 and July 16.

Mr Smith alleged that the Government and BEC would petition the court not to grant RDA the relief it was seeking because the Wilson City plant was now more than 80 per cent complete.

While it now seemed impractical for the Wilson City power plant to be relocated elsewhere, Mr Smith said RDA was now seeking a Supreme Court order requiring that consultation "may now take place even at this late stage" to ensure its views on fuel type and other issues were accounted for.

"Unfortunately, given that BEC is effectively an arm of the executive, this incestuous relationship has deprived the applicants and the public in general in the Bahamas of the supervision and protection of the rule of law, which the regulatory authorities would have guarded if BEC was a private development company," Mr Smith alleged.

"The result is that the applicants are pitted against, not only BEC but also the authorities that in fact should be on RDA's side. Not against it! "