If BPL deal is good, why the secrecy?


HAS the PLP got cold feet all of a sudden over its plans for Bahamas Power and Light?

It seemed like the Davis administration was going full speed ahead – without even stopping to really tell people what they were doing.

They came to Parliament with the Electricity Bill and Natural Gas Bill, with the wording of the electricity legislation suggesting the Utilities Regulation and Competition Authority (URCA) would be sidelined when it came to approval of tariff changes.

And then the government stuttered.

When it was pointed out that URCA might not be having quite the role it has had previously, there was some bold rhetoric about how that was not the case at all ... and then the government brought an amendment to its own bill that suggested actually they might not have realised what they were saying in the first place.

That will happen without extensive consultation – and with stakeholders such as the unions, the workers, the people of Grand Bahama all protesting that they hadn’t been asked about the changes, any consultation there was certainly was not extensive.

Call it a U-turn, call it a rethink, call it a clarification – but it was definitely a change from what was originally laid in the House.

Then, Energy Minister JoBeth Coleby-Davis hinted that there might not even be any changes in tariff in the remainder of this administration’s term.

Was it that perhaps they realised that people, already burned by the high price of electricity in the early days of the administration after the government did not take up the fuel hedging that would have kept prices down, would not think fondly of a government putting up prices again as an election drew near?

Not inspiring confidence, Mrs Coleby-Davis said that the government “cannot do everything all at once” as it tries to solve BPL’s problems.

She added: “This industry is so fickle, and its changes so fast-paced, we have to be careful in how we address each possible solution, and so everything will be a phased approach so we get it right and the Bahamian people do not suffer at the end of the day.”

She added: “It wouldn’t be that we try to take on all at once because that would cost a lot of frustrations because it has to do with switching out systems, bringing on fuel and this, that, whatever, and so to avoid bringing any sorts of frustrations to the larger Bahamian public, it will all have to be phased out.”

Meanwhile, former Deputy Prime Minister Desmond Bannister – who had BPL in his portfolio when in government as Minister of Works at the time – said that the new legislation would allow the government to transfer BPL assets to subsidiary companies. Those would be public assets, our assets.

He said: “This is an example that I’ve been running through my mind: BPL forms a subsidiary company in which they own 50 percent of the shares and they bring in someone who they call a strategic partner or manager or whatever, and those persons are allocated 50 percent of the shares; then BPL takes $100m, which these generators are worth, and transfers it into this joint venture. Well, the value of BPL’s assets have just depreciated by 50 percent.”

Now take a moment to consider all this.

We have legislation that could see electricity tariffs go up, we could see BPL being broken up into separate entities, that might involve assets being transferred to other companies while the main entity still retains the debt, there are possible shifts in the regulatory powers over electric companies ... that’s a lot to cover without extensive consultation.

It appears as if the government is in advanced talks with some of the potential partners it might be eyeing for such a project – and it seems as if the government has largely decided what it is going to do and is proceeding accordingly without really telling anyone.

It is a big move by the administration – and let’s not fool ourselves, over-hauling BPL is a mammoth task, one that needs to be tackled and which is long overdue. Is this the right solution? Your guess is as good as mine considering we have not been told what is going on.

Even Desmond Bannister’s talk about transferring assets is based on reading the tea leaves – or extrapolating from the legislation into maybe, could be, might be.

The current Minister of Energy’s talk of dealing with a fickle and fast-paced industry does not fill one with great hope that the administration knows what the outcome will be at the end of all of this – and wearing her other hat as the transport side of her portfolio, she has already angered taxi and bus drivers, and angering BPL’s workforce will add to the possible election risks facing the PLP at the next vote. Add in the prospect of you, me and everyone else perhaps having to pay more for our electric to accommodate changes including assets being handed off to private partners, and it has the potential to be a recipe for electoral disaster.

Get it right, though ... get it right and we might solve the conundrum that has plagued The Bahamas for decades. This week again, my power supply has been off and on – we’re coming around to summer now and we know what that usually means. Inconsistent power supply – expensive with it – has been not just a problem for home users, but has actively been a problem in attracting business to The Bahamas.

Has the PLP found the magic solution to BPL’s ills? I’d be a lot more confident if they were a lot more confident themselves – starting with telling everyone what the plan is. After all, if it’s a good idea, why keep it a secret?


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