The Tribune

THE US State Department’s 2014 Investment Climate report noted concerns international and local investors

have about government owned monopolies, particularly the Bahamas Electricity Corporation and Bahamas Air.

The report, released late last month, noted that BEC is seen by potential local and international investors as “an impediment to diversification and development of an alternative energy platform.”

The report added that BEC’s debt of more than half a billion dollars has hampered “its ability to independently fund the replacement of its decades old plants and the necessary expansion to meet the needs of the country.”

The report added: “These factors combined with the increase in global oil prices have resulted in energy prices in the Bahamas being among the highest in the hemisphere. Investors recognised this confluence of issues as an opportunity and many have entered the market to offer solutions ranging from the introduction of utility scale alternative energy solutions to new generation plants fuelled by propane and other gas options.”

The report noted that the government has recently concluded a bidding process as it moves to divest a portion of BEC’s generation responsibilities and for a privately owned management company to address the issues related to transmission and distribution.

The report also referred to challenges within Bahamas Air and said privately owned airlines providing

service in this country “have consistently complained of the market distortions created by the national

carrier”.

The report said that these operators argue that the practice should be regulated by a competition authority and “cite the fact that the national airline uses state funds to undercut fares as proof of unfair competition in the sector.”