Opposition Leader Philip Brave Davis yesterday blasted the government over contradictory assertions explaining the delayed introduction of Bahamas Power and Light’s (BPL) rate reduction bond fee.
On Thursday, BPL Board Chairman Dr. Donovan Moxey told The Nassau Guardian that the fee BPL previously said it would introduce to its customers this month is being affected by the impact of the novel coronavirus, COVID-19.
Meantime, The Tribune reported that Public Works Minister Desmond Bannister said the delay was necessary because major institutions wanted greater comfort given that the BPL bond issue will not be backed by a Bahamian government guarantee.
“There is obvious confusion in the government over the BPL bond issue,” Davis said in a statement.
“[W]hile we are not at all surprised that there is a ball of confusion, the government still has to come clean to the Bahamian people with the truth on this matter.
“We warned them that the market would be uncomfortable with the lack of a plan. The matter was further complicated and the level of market discomfort heightened by the fact that the plan left in place by the PLP was unceremoniously canceled with no viable replacement.
“Given the infighting among the first board members coupled with lawsuits, allegations of corruption and a dubious and convoluted relationship with both Shell North America and Wartsila, who would have confidence in these circumstances?
“Further, the market would know that a general election is right around the corner and given what has happened in the past, potential investors and financiers may want to take a wait and see attitude, and for good reasons.”
When addressing the delay on Thursday, Moxey said, “Given the fact with the coronavirus and what’s going on with the U.S. equity markets, we’re trying to assess how that can possibly affect the bond market for us, and so, there may be certain windows that we have to look at to determine exactly where’s the market with bonds; so, that’s definitely something that we’re looking at.”
The Electricity Rate Reduction Bond Bill, 2019, which was passed late last year, aims to establish a legislative framework for BPL to raise $650 million through a rate reduction bond.
In December, a release published by BPL indicated that average households would see their electricity bills increase by an estimated $27 per month beginning this month.
However, Moxey said that the company has not determined the exact amount that customers will see on their bills once the fee is implemented as that “is going to be dictated by closing the bond”.
Davis said the government should carry out the plan the PLP left in place.
“Our unsolicited advice to the FNM government remains the same: return to the plan the PLP left in place – a plan that Credit Suisse, Bank of America and CIBC – all reputed international financial institutions – reposed great confidence in and placed their respective financial backings behind,” he added.
“We told the incoming FNM government, back in 2017, that their approach to BPL and energy sector reform was fundamentally flawed and we stand by that today as we see the chickens coming home to roost.”