The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

THE Bahamas Electricity Corporation’s (BEC) former executive chairman has cast doubt on whether his successor will be able to raise the $300 million financing he is seeking, telling Tribune Business its balance sheet “cannot support any significant borrowing”.

Speaking after Leslie Miller last week suggested he was looking to raise $300 million in financing to upgrade BEC’s Clifton Pier power plant, Michael Moss said the Corporation’s financial position simply could not support borrowing of that magnitude.

And, with its projecetd $550 million fiscal deficit for 2012-2013, and a national debt approaching $5 billion, Mr Moss said it was unlikely that the Government could provide any assistance for Mr Miller’s plans.

“If you look at it from a country standpoint, I’m not sure how government can offer the necessary financial assistance. I don’t see any significant government support being forthcoming in the near term,” Mr Moss said. “He would have to be looking at the next Budget period, and I think government will be challenged to provide him with support of any consequence.”

“And BEC’s balance sheet still cannot support any kind of significant borrowing. That’s a direct consequence of the rate reduction seven years ago, that was not properly thought out and almost sent BEC to its coffin.

“I see that, unfortunately, for a while BEC will have to take baby steps rather than giant leaps.”

While wishing Mr Miller the best, Mr Moss said he thought his successor “will find it a challenge” to deliver on his promised $300 million Clifton upgrades, especially as the Government had yet to publicly come out and say it would support him.

Besides, BEC has the pressing matter of a $211 million syndicated loan coming due this month. However, Mr Moss, whose Board had started to deal with the issue prior to the May 2012 general election, said that a roll-over of this debt should be a relative “piece of cake”.

“My Board had already started work on arranging for a rollover or amalgamation of that $211 million into something else,” he added. “But I just don’t see any capacity for significant borrowing on top of that. It’s going to be a long, tedious climb out that’s going to take some time.”