The Tribune

By NATARIO McKENZIE

Tribune Business Reporter

nmckenzi@tribunemedia.net

Bahamians are “deluding themselves” if they believe they can have a reliable energy supply without paying for it, a former BEC director warning: “At some stage we have to spend the money.”

Superwash president, Dionsio D’Aguilar, told Tribune Business that a ‘base rate’ hike by Bahamas Power & Light (BPL) was necessary despite being unpopular with consumers. His comments came amid reports that Pam Hill, BPL’s chief executive, had sought a ‘base rate’ hike from the Government that had been rejected.

“BEC is basically bankrupt. It has lost a whole lot of money and a great portion of its infrastructure needs to be modernised,” Mr D’Aguilar said. “You can’t do that without cash.

“The Bahamian people are simply deluding themselves, and the Government is selling them a dream, that they can have reliable power without paying for it.

“If you want reliable power and BEC has the problems it has, I don’t know how you are going to improve it unless you get money. You can either rise the rates or borrow more money, or the Government can give them money which they will get form taxation.”

Mr D’Aguilar continued: “At the end of the day, the Bahamian people will have to pay for improved and reliable power infrastructure, and there is no way to get around it.

“The Bahamian people through, successive governments, have mismanaged BEC to the point where it is bankrupt and its infrastructure is in a poor state. BEC needs a ton of money to recapitalise.

“Either we pay it through increased rates, or the Government borrows more money, which they really can’t with the debt-to-GDP ratio where it is now. Of course, an increase is very unpopular, but at some stage we have to spend the money. Yes, it’s a good first step to get someone running BEC, but once again the Government is meddling in its ability to run properly.”

Carolinas-based PowerSecure signed a five-year management services agreement with the Government to run BPL, the Bahamas Electricity Corporation’s (BEC) newly-created operating subsidiary, on February 9 this year.

Less than three weeks later, PowerSecure announced that the Atlanta-based utility giant, Southern Company, was acquiring it for $431 million.

Tribune Business revealed last year that investment banks and finance houses were being invited to bid on raising a $75 million facility, likely a bond issue, to provide BPL and its new manager with short-term working capital.

This has yet to happen, however, and suggests that plans for BPL’s initial financing may have changed, forcing it to go the ‘base rate’ increase route. That $75 million facility was also supposed to be replaced by the proposed $650 million Rate Reduction Bond (RRB), which is designed to refinance the debt, environmental, pension, severance and other legacy liabilities left by BEC.