Moss: PLP ‘mismanaged’ BEC
Bahamas Electricity Corporation (BEC) Chairman Michael Moss yesterday provided a summary of a 2006 financial report, which he suggests proves that BEC was mismanaged under the Progressive Liberal Party (PLP) government.
Moss said he was responding to repeated claims by PLP Chairman Bradley Roberts that the corporation’s finances were sound under the Christie administration.
He said he believes Roberts was “either sadly duped, hoodwinked if you will, into believing BEC’s finances were in a state of good health during the period he served as minister in the PLP government, or he may be delusional.”
Moss provided a summary of a report by PA Consulting Group titled “Bahamas Electricity Corporation — Tariff and Financial Review — Preliminary Road Map for BEC”. It was presented to BEC on January 13, 2006.
The report showed that while net income remained positive in the $10 million range, other aspects of BEC’s financial performance had deteriorated to what (in many companies) might be called “a danger zone”.
BEC experienced negative cash flow — over $7 million in 2003/4 — and bank overdraft and demand bank loans had grown and totaled more than two months’ revenues, according to the report.
The 2006 report also said: Currently liabilities substantially exceed current assets; accounts payable have grown to be far higher than accounts receivable and government overdue accounts receivable has grown to $35 million.
“The ill-advised and ill-conceived rate reduction imposed on BEC under the watch of the PLP chairman set BEC squarely onto a progressively deteriorating financial spiral,” said Moss’ statement, which repeated a point made in the past by current government ministers.
“The PA Consulting Group’s report is not the only document that speaks to the organization’s mismanagement under the PLP. Its findings are fully supported by BEC’s audited financial reports, a matter of public record, and summarized below.
“For the year that commenced October 1, 2006 and ended September 30, 2007, BEC recorded a loss of $11.733 million.
“For the year that commenced October 1, 2005 and ended September 30, 2006, BEC recorded a loss of $2.916 million.
“For the year that commenced October 1, 2004 and ended September 30, 2005, BEC recorded an operational profit of a mere $1.306 million plus a gain of $14 million on the sale of its two million shares in Cable Bahamas, yielding a net profit of $15.306 million.
“Without the foresight of a prior administration to secure purchase of the shares during the initial public offering of the stock, occasioned by that administration and opposed by the PLP, BEC’s profit for the year would have remained a tepid $1.306 million.”
Moss said the rate increase introduced in 2010, that restored BEC’s tariff to about the same position it was 18 years ago, has stopped the massive hemorrhaging at BEC.
“It will, however, likely take a number of years for BEC to fully recover from the illogical and irresponsible rate reduction that was imposed on the organization,” he said.