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‘Shell deal cost us our jobs’

Three former Bahamas Power and Light (BPL) board members allege in statements of claim filed in the Supreme Court on Wednesday that they were terminated from their positions because they refused to approve a proposal to vary the terms of a deal in the works with Shell North America for a power purchase agreement that had already been approved by Cabinet.

Former BPL Chairman Darnell Osborne and former BPL board members Nicola Thompson and Nick Dean outlined their recollection of the series of events that eventually led to their termination, claiming that they were wrongfully removed by Minister of Public Works Desmond Bannister.

Osborne was appointed to the board and chairmanship effective July 1, 2017, and Thompson was appointed to the board the same day.

Dean was appointed to the board effective June 26, 2018.

The statements claim that the trio’s tenure on the board went smoothly until May 2018 for Osborne and Thompson, and August 2018 for Dean, when Bannister adopted a “hostile” attitude toward them due to several issues, specifically relating to the carving out of the Shell NA LNG & Affiliates power purchase agreement to construct a new turn-key generation and liquefied natural gas (LNG) plant at Clifton Pier.

The other issues reportedly included the unauthorized travel of BPL Chief Executive Officer Whitney Heastie and now BPL Executive Director Patrick Rollins without the knowledge and approval of the BPL board; Heastie’s proposal to purchase $4 million turbochargers; and Heastie’s position that he had authority to hire executive staff of BPL without the approval of BPL’s board.

The statements note that at a May 4, 2018 meeting with the BPL board at Dune restaurant, it was disclosed that Heastie, Rollins and Bannister travelled to Houston, Texas, Norway, the People’s Republic of China and other places to meet with Shell, Engineering Procurement Construction (EPC) contractors, Burmeister & Wain Scandinavian Contractors (BWSC) and Wartsila to conclude a memorandum of understanding with Shell in connection with the proposed construction of the plant at Clifton Pier.

“Directors Heastie and Rollins sought to defend their actions by asserting that their travels, as executive directors of BPL, [were] under the jurisdiction of [Bannister], who they claimed had directed them, and that travel by BPL’s executives was not under the supervision of the board of BPL,” read Osborne’s statement.

At that meeting, Osborne’s statement said, Heastie proposed that the BPL board vary the terms of the agreement which had been approved by BPL’s board in December 2017 and by Cabinet in March 2018.

“The proposal was to carve out the building of the power plant, at an approximate price of $200 million, and have BPL construct the power plant using either BWSC or Wartsila,” according to Dean’s statement.

Osborne’s statement further noted that to facilitate this variation, it was proposed by Heastie and Rollins that BPL fund the construction from the anticipated interim financing the board had secured.

Osborne’s statement said that at the time, Heastie also indicated that Shell was challenged with securing financing and that a financier by the name of Quantum had agreed to finance the cost of approximately 21 percent as opposed to 15 percent, which was available through alternative financiers.

However, the statement said, other board members advanced that BPL could secure more favorable financing.

At the end of that meeting, the board resolved to defer a final decision on the proposal and directed the technical committee, comprising Rollins and Heastie, to obtain more information for a future presentation to the board, Osborne’s statement said.

Osborne’s writ claimed that after the May 4 meeting, Rollins and Heastie continued to travel and meet with contractors for the proposed LNG plant without consulting the board in advance.

At a follow-up meeting on May 18, where Heastie and Rollins presented further information, instead of a final decision, the board gave several directives to the pair, Osborne claimed.

These included ceasing any unauthorized travel to Shell and EPC contractors and to give an accounting for previous unauthorized travel and submitting a tender’s report relating to the proposal consistent with industry procurement standards, practice and protocol.

The board also requested that all future meetings with Shell be held in the presence of all board members and that EPC contractors appear and present directly to the board, Osborne said.

Osborne’s writ went on to outline a back-and-forth among BPL directors and board members over the vetting of the Shell MOU.

On June 28, 2018, the board of BPL held a meeting and resolved not to accept the proposal by the technical committee and to defer the proposal to a later day when funds would become available under a Rate Reduction Bond Financing.

At this meeting, the board proposed that BPL maintain the original intent of using its interim financing for the voluntary separation exercise, the Advance Metering Infrastructure (AMI) initiative and other capital projects awaiting funding.

The matter appeared to spiral out of control from there.

On July 4, 2018, the board was informed that Rollins would be appointed to executive director of BPL, a move that Osborne’s writ claims was “retaliation for the board’s refusal to approve the carve-out from the Shell MOU, rejection of the CEO’s unfettered control of BPL outside of board supervision and in an effort to undermine the plaintiff”.

Over a month later, Bannister held a meeting on August 14 with the entire board, except Dean, who was reportedly traveling, and requested the resignation of the remaining members of the board, Osborne claimed.

Osborne’s and Thompson’s statements claim that at that meeting, Bannister informed them that “he and the prime minister were unhappy with the way the board was functioning and that [they] should resign from BPL, since other directors Messrs. Hugh Patrick Rollins, Whitney Heastie and Ferron Bethel had already resigned from the board of BPL”.

Dean’s statement claimed that he initially learned about his dismissal through WhatsApp and then newspaper headlines and television reports upon his return to New Providence, but was never formally contacted by Bannister to request his resignation or provide any reason for his termination.

Three days after that meeting was reported to have taken place, it was announced that Bannister had appointed a new BPL board which was comprised of Bethel, Heastie and Rollins, along with Dr. Donovan Moxey, Stephen Holowesko, James Moss, Debra Wood and Viana Gardiner.

BPL signed a MOU with Shell Gas and Power Development B.V. for a gas-to-power project on November 2.

The MOU establishes Shell as the project developer for the power project, which will include the development of marine infrastructure to receive liquefied natural gas; a gas pipeline to bring gas to shore; an onshore LNG regasification terminal; and a new gas-fired 220-plus megawatt power plant.

Shell, which would become an independent power producer (IPP), will cover the cost of constructing the plant, which is reportedly expected to be upwards of $100 million. BPL will in turn pay Shell to supply electricity.

On March 5, 2019, BPL announced that it signed a contract with Wartsila to install a new 132-megawatt engine power plant at the Clifton Pier site that will cost approximately $95 million.

When asked how the company planned to pay for the project, Heastie said the money would come from capital works that were deferred in favor of this new generation.

He said at the time that the Wartsila project will not conflict with the Shell MOU.

Staff Reporter at The Nassau Guardian
Sloan covers national news for The Nassau Guardian. Sloan officially joined the news team in September 2016 but interned at The Nassau Guardian while studying journalism at the University of The Bahamas.
Education: Vrije Universiteit Brussel (University of Brussels), MA in Mass Communications
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