Whether the privatization of Bahamas Power and Light (BPL) remains a priority for the Minnis administration, which made the pledge to do so in its 2017 Free National Movement (FNM) manifesto, has yet to be seen – but at least one economist said it will do little to solve the power company’s inescapable problems.
Bahamas Chamber of Commerce and Employers’ Confederation (BCCEC) Chief Executive Officer Jeffrey Beckles said BPL’s privatization cannot be looked at as a single solution, especially without a commitment to “do what is necessary to improve power generation”.
“It can’t just be to privatize management or any facet of it, all of this has to be driven by a single objective, power generation. If company A does not have control over planning, development and capitalizing on capital expenditure, then you’re going to get yourself in problems,” Beckles told Guardian Business.
“If you hire a management company to manage the same assets that have been troubling us for a long time, then we have not achieved anything.”
The FNM promised in 2017 to revolutionize the energy sector by privatizing the Bahamas Electricity Corporation (now BPL) to ensure Bahamian ownership through majority shareholding, and also to provide incentives and tax concessions for the production of alternate fuel sources.
The party’s manifesto also promised to reduce the cost of energy by modernizing the electricity generation, transmission and distribution infrastructure.
Shortly after entering office, the Minnis administration severed a management services agreement with U.S. company PowerSecure, which had been contracted by the previous Christie administration.
Beckles said that form of privatization cannot work for BPL.
“I can’t say there is a single answer to that, yes or no. I think it has to be in the context of what do we want this private company to do and secondly, is the private company going to take the entire portfolio of power generation over, meaning that is has control over capital planning and capital expenditure? And then the obvious question is, what would be the objective for power generation in the country?
“And if the issue is we need a new plant then fine. I believe the Bahamian people will understand in very simple terms, look with the assets we have we are no longer capable of providing the power demand, here’s our plan to develop a new power plant, here’s the projected cost, here’s the group that’s going to oversee this exercise and here is what we expect to achieve at the end of this exercise. And obviously that’s stable generation that will generate more than the capacity we need and then obviously the cost implications for consumers as well as the business community.”
Last November, BPL signed a memorandum of understanding with Shell Gas & Power Developments B.V. for a liquefied natural gas power project at its Clifton plant at a cost upwards of $100 million.
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