The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

A former Bahamas Power & Light (BPL) director has called for an overhaul of board processes after finding “many glaring deficiencies” with the proposed $4m purchase of key parts.

Nick Dean, who headed the board’s procurement committee under former chair, Darnell Osborne, said in a statement that BPL’s corporate governance mechanisms needed reform to “minimise external interference” and internal confusion among staff.

Calling for a properly-articulated quality management system to be implemented throughout BPL, Mr Dean hit back at claims by Desmond Bannister, minister of works, that he and Mrs Osborne exposed the state-owned utility to a $10m-plus loss - and New Providence consumers to a summer of blackouts - by delaying and obstructing the purchase of critical replacement parts.

Tackling the dispute over replacement turbochargers for a failed engine at BPL’s Clifton Pier power plant, Mr Dean said the proposal presented by chief executive, Whitney Heastie, lacked all necessary supporting documents and violated a procurement policy requiring all purchases over $100,000 to be put out to competitive bid.

Arguing that Mr Bannister omitted “key information” in his allegations, Mr Dean said: “There were many glaring deficiencies in the turbocharger proposal that caused me to request additional information.”

Alleging that the then-board was not informed of the engine’s failure when it occurred on May 30 this year, the procurement committee head said he was not provided with the funding request from Mr Heastie until two months later - on July 25, 2018.

“If there was such a heightened sense of urgency regarding replacement of this item, why the two-month delay between the failure’s occurrence and when the request to replace the parts was made?” Mr Dean asked.

“The time to make a decision was artificially short. The plant had functioned since May 30 without the said engine in operation. The proposal presented to me was dated July 24, 2018, and sent to me on July 25, 2018. The proposal was only valid until July 31, and I was being urged by the chief executive and newly-appointed executive director Rollins to hurry up and make a decision.”

Mr Bannister told Tribune Business last week that Mr Heastie has sought to provide Mr Dean with the information requested, but the latter said in his statement that he “simply requested more time” to reach a decision and was never given an explanation for the tight timeline.

“Only one turbocharger (of a pair) on one engine at Clifton Plant failed on May 30,” the former procurement head added. “The chief executive was requesting funding for replacement for both turbochargers on a second engine which was still in operation. The new turbochargers were purportedly more efficient than the ones they were replacing but were untested.

“I did not reject the funding request on this basis. I simply suggested that we consider the option of phasing the installation such that we could evaluate the performance of the first pair of turbochargers before purchasing the second pair.”

Mr Dean said Mr Heastie presented just one offer, which contravened BPL’s procurement policy requiring competitive bids and tendering for purchases worth more than $100,000. The turbochargers proposal was worth $4m, but Mr Bannister said this equipment is “made to order” by just two companies worldwide.

“I simply asked the chief executive for competing bids or a statement, in compliance with the procurement policy, confirming that this was not possible. I never received either,” Mr Dean alleged.

“The chief executive requested funding in the amount of $4m. The proposal which he presented in support of his funding request totalled some €1.4 million Euros (approximately $1.66m). This raised some loud alarms in my head. Even if the fund request was to replace the turbochargers for two engines, as suggested in the funding memo, the numbers did not add up..... I simply asked for a full accounting of the funds being sought.”

Mr Dean said one option presented in Mr Heastie’s funding request was to repair the engine by replacing the damaged casings - something that would have cost $600,000, as compared to the $4m turbocharger purchase.

He argued that this option was “inadequately explored”, while criticising the funding request for failing to supply information on freight, insurance and installation costs - only the purchase price.

“The absence of this information would have left BPL open to unacceptable risk with such a potentially large unknown factor after committing to the initial purchase,” Mr Dean said. “

“There were many more deficiencies associated with the funding request. Suffice it to say that I could not in good conscience request $4m to be spent on behalf of the Bahamian people with this deficient level of supporting documentation.”

Mr Dean said the episode showed BPL’s “system of checks and balances was working exactly” as it should, “as required by good corporate governance”. He added that he had not made a decision for or against purchasing the turbochargers, as there was “insufficient information” to do so.

Referring to the former Board’s breakdown and dissolution, the ex-procurement chief added: “This episode should be used as a teachable moment to seriously explore the mechanisms by which the BPL Board operates, and to put more measures in place to minimise impacts from external interference and internal ambiguity.

“In addition to the many physical upgrades required at BPL, I offered that the company would benefit greatly from implementation of a company-wide quality management system (such as ISO 9001-2015) with clearly articulated policies and procedures.

“This would eliminate some of the subjectivity associated with decision-making and would result in a more efficient and transparent operation of the company. I had proposed this as one of my goals to achieve during my tenure as a director.”