The Tribune

FREE National Movement leader Michael Pintard said the government’s amendment to the Value Added Tax Bill to increase the VAT-free ceiling on Bahamas Power and Light bills from $300 to $400 is “insignificant”.

The amendment, which was debated yesterday, comes days ahead of an electricity bill increase, set to take place next month due to a higher fuel surcharge.

During the debate in Parliament, Mr Pintard persisted that the Davis administration failed to act in a timely manner regarding hedging trades that would have locked in cheaper fuel prices for consumers.

Prime Minister Philip “Brave” Davis had earlier told parliamentarians that as consumers would face a high fuel surcharge, the ceiling was being raised to “bring some relief to the least among us”.

Mr Davis asked the opposition to partner with the government to assist people in need of the help.

Mr Pintard said: “One of the few times we have been here in the last three and half months with an administration that has developed a pattern of behaviour that is worrisome, after making fundamental errors they returned to Parliament or televised addresses to make promises popular in nature, unfortunately with insufficient funds to fund as time goes on. I refer to it as an act of extending candy that tastes sweet in the moment of announcements, but certainly cavities will follow later. That is the pattern of behaviour.

“Here we are today debating the issue of amending the VAT Act of 2014 to increase BPL VAT exemption from $300 to $400. We make a big deal of it as if this is something dramatic and significant for the transformation of Bahamian lives. Bahamians who have gone through COVID, gone through Dorian who are a part of an economy that is struggling to recover and no less than the chief executive officer of the country moves this bill.

“Rather than move the amendment they should come to apologise for this Band-Aid solution that they have brought here because what was not included in the prime minister’s presentation is that we are here precisely because the member for Cat Island, Rum Cay and San Salvador assisted by the member for Fort Charlotte refused to execute the trades that they were advised were absolutely necessary to stave off what we now face and they are now looking to Ukraine and Russia as scapegoats for where we are today.”

Mr Pintard also said: “There was ample evidence that we had a plan in place to maintain the price of fuel in the vicinity of 10.5 cents and even if it increased certainly not beyond 11.5 cents. That information was ignored and we challenge the minister of works, we challenge the prime minister in this House that they have seen none of these documents.”

To this, Mr Davis said he had seen no papers or advice, adding “none reached my desk”.

For his part, Works Minister Alfred Sears said: “Not only was I not provided but what this honourable member of Marco City has failed to disclose to this honourable House is that what was on the table was a rate reduction bond to borrow $500m.

“The first briefing that I received was that this was urgent, this was the solution, that this would solve the problems of energy in the Commonwealth of The Bahamas and they said it had to be signed right away.

“It was not disclosed that this $500m package had no provision for renewable energy, no provision for wind, no provision for ocean thermal.”

Members then began heckling from both sides, with House Speaker Patricia Deveaux having to rise to her feet to return order in the lower chamber.

Mr Sears said it was the former Minnis administration that failed to act, adding they had not approved the rate reduction bond.

However, Mr Pintard insisted that Mr Sears was attempting to deflect from the hedging issue.

Mr Sears maintained that the Minnis Cabinet refused to approve the rate reduction bond.

He continued that the hedge is still active and will not expire until 2024. The minister said a BPL committee was working through how to extend the hedge.

“I have not seen a draft Cabinet paper; no draft Cabinet paper has ever been submitted to me and this is why I was sitting there minding my own business, but the honourable member invited me so therefore I can say for the record that no draft Cabinet paper prepared by the honourable member or any of his colleagues has been presented to me,” Mr Sears said.

Still, Mr Pintard levelled another round of allegations saying that Mr Sears had been briefed by the hedge committee.

“I have not met with the hedge committee of BPL. I have not met with the hedge committee within BPL,” Mr Sears insisted.

Mr Pintard repeated that the necessary trades were not executed. Had this been done, Bahamians would have been protected from spikes in electric bills, he said.

This led Mr Davis to stand and urge Mr Pintard to explain the trades he was referring to and whether the $500m rate reduction bond was an appropriate arrangement.

Mr Pintard explained that the initial contract that was put in place outlined 80 percent of anticipated fuel volumes were hedged in the first year leaving 20 percent exposed to market pricing, 50 percent of the anticipated fuel volumes were hedged in year two leaving 50 percent exposed, and 25 percent of the anticipated fuel volumes were hedged in year three, leaving 75 percent exposed to market pricing.

He said the Davis administration had not disclosed that in all sensible financial hedging transactions, 100 percent is never hedged.

“Had they locked in the 10.5 cents per kilowatt rather than leave so much fuel subject to variation in price on the open market, you would not be in this position,” Mr Pintard said.