Minister of Works and Utilities Alfred Sears, QC said yesterday that he is gearing up to meet with Shell North America after months of stalled negotiations for the company to take over power production on New Providence.
Bahamas Power and Light (BPL) signed a memorandum of understanding with Shell Gas and Power Development BV in November 2018 to formalize the negotiation process to build a liquefied natural gas pipeline and take over two of BPL’s stations, however talks have dragged on and further lingered due to the COVID-19 pandemic.
“We will be meeting with Shell within the next two weeks. Based on the briefing that we have received from BPL, there has been a long process of negotiation between BPL and Shell and connected to that is a proposal by BPL to place a rate reduction bond in the vicinity of $600 million,” Sears told reporters yesterday.
“As you know this is our fourth week in office, we are reviewing all of the issues of the rate reduction bond, the Shell transaction, as we are doing with every corporation within the ministry. The reason for this review is to ensure that the government’s agenda – which was read by the governor general in the Speech from the Throne – that whatever we do is consistent with policy decisions and the priority communicated to the public in the Speech from the Throne.”
Last month, while speaking about the rate reduction bond, Sears said it’s a decision a country in the current financial position as The Bahamas should not take lightly.
BPL’s current board had sought to place the bond on the international markets before the end of this year, to begin capital works projects as soon as possible. The company is hoping to raise $535 million to also help pay off more than $300 million in legacy debt.
Regarding other aspects of his portfolio, Sears said he has yet to make a decision on whether the Davis administration will follow through with plans announced by former Minister of State for Finance Kwasi Thompson last December, to approve increases in rates at the Water and Sewerage Corporation (WSC).
“We have not considered it at all. We are currently reviewing the work of the WSC and as you know there is also the issue of the board. Once the new board is in place and we are on a proper governance stream, we will be working with the board to ensure the least costly, most efficient and safe delivery of potable water to the Bahamians and residents on all of our islands and cays,” he said.
Thompson said last year that the WSC has required significant and unsustainable outlays from the public purse for a long time, largely as a result of policy decisions that essentially limited the corporation from adjusting its fees for over 20 years.
He said the plan was to have the WSC board provide a plan to achieve a proper cost recovery model that may include – and is not limited to – adjustments in rates.