By NEIL HARTNELL
Tribune Business Editor
nhartnell@tribunemedia.net
Around one in four Bahamian businesses have identified high electricity costs as “a major constraint” to doing business, according to a World Bank report, a percentage a senior private sector official described as “low”.
The findings from the World Bank’s Enterprise Survey were contained in an International Monetary Fund (IMF) report on low growth/high debt in the Caribbean, and Edison Sumner, the Bahamas Chamber of Commerce and Employers Confederation’s (BCCEC) chief executive, suggested they underestimated the problem in this nation,
He told Tribune Business that numerous Bahamian companies were having to make monthly choices between meeting staff payroll or paying their electricity bill, with energy now the largest single cost item for many firms.
The World Bank study, which found that between 25-30 per cent of Bahamian companies identified electricity tariffs as a major constraint, placed this nation in the ‘middle of the Caribbean pack’.
As a percentage, more companies in Dominica, St Kitts, the Dominican Republic, St Lucia, St Vincent, Barbados, Antigua, Jamaica and Belize reported that electricity was a major impediment to business profits, productivity and growth.
“I think the percentage is actually higher than that based on our discussions with members of the business community,” Mr Sumner said, when told by Tribune Business of the report’s findings.
‘The cost of energy is among the highest priority items on our list, as well as the IMF’s. For many businesses, the cost of electricity exceeds their payroll. That has become one of the highest line items in doing business, and the cost of energy in running a business is becoming unbearable for a lot of them.
“It’s a matter of choosing whether to pay the electricity bill or meet payroll in a given month. We have a number of businesses we are very familiar with who have made some staff redundant, as they cannot maintain their staff levels and pay electricity bills.”
Mr Sumner added that the BCCEC was set to organised another energy-related conference in 2013 in another attempt to come to grips with the issue.
Elsewhere, the IMF report noted that the Bahamas was second only to Jamaica when it came to the probability of a hurricane striking, there being a 20.2 per cent -greater than one in five chance - that a storm will strike this nation annually.
And the Bahamian commercial banking sector’s level of non-performing loans, around 13 per cent, was fourth in the Caribbean behind Belize, St Lucia and Antigua.
Comments
John 11 years, 6 months ago
The problem with B.E.C is not only the high rate of electricity but also the fact that a number of supervisors in the credit/collections department who seem ignorant to the fact that their actions affect the real cost of electricity to the consumer as well as B.E.C's operating capital and bottom line. Rather than sending their employees out with the intention of dicsonnecting consumers supplies with an attitude. and inconveincing consumers, who are a few days delinquent on their accounts, the 'disconnections' department should focus on 'collections' and work with the consumer, if only to get a portion of the arrears at a time. When the consumer's supply is disconnected this reduces the revenue generated by B.E.C. Then there is also the question of the $143 MILLION owed to B.E.C. Is this a stagnant amount that B.E.C is failing or refusing to collect on, or are these a different mix of consumers at a given time that owes this money to the utility company? If B.E.C is allowing a handful of its consumers to rack up large electricity bills, then the corporation is writing them off, this not only is driving up electricity costs to the paying consumer, but it is eating up B.E.C.'s operating revenue and can easily cause the demise of the corporation. Send Goff and all the staff in the disconnections department on a revenue colllections and customer relations seminar and not only will B.E.C's revenue collections increase, but the Corporation will have a better public image and a better working relationship with the consumer. The days of getting large amounts of overtime for disconnecting peoples' lights are gone.
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