The Tribune

By YOURI KEMP

and NEIL HARTNELL

Tribune Business Reporters

Sun Oil’s chairman yesterday refused to be drawn on assertions by the deputy prime minister that it had supplied “contaminated fuel” to Bahamas Power & Light (BPL).

Sir Franklyn Wilson, who also heads Sun Oil’s parent, BISX-listed FOCOL Holdings, told Tribune Business that it was “prudent” for him not to respond to Desmond Bannister given his responsibilities to the company’s shareholders.

“I’m aware of what he said,” Sir Franklyn responded in relation to Mr Bannister. “That’s part of the reason why I think it’s best that I don’t say anything. It’s just one of those situations where my fiduciary responsibility to my shareholders is such that I think it’s prudent for me to reserve comment.”

This newspaper reached out to the Sun Oil chairman after the deputy prime minister, speaking outside Cabinet, explained that BPL’s Monday press statement warning New Providence customers they “may experience short outages” related to “contaminated fuel” supplied to the state-owned electricity monopoly.

Mr Bannister said: “We are hoping that there are no challenges and outages. I think as a precaution BPL has to advise the public. What happens is this. BPL contracts the provision of fuel out to various companies. Some companies in The Bahamas have had these contracts for many, many years and have provided fuel on a reliable basis over those years. 

“There is the batch of fuel that came in recently that BPL suspects was contaminated. This is not provided by BPL; it is provided by suppliers. When BPL uses this fuel, it causes some challenges with their engines.

“They’ve gone through a whole bunch of parts; replacing parts, replacing filters and other challenges because of this fuel, so they have to get the fuel out of the engines and be able to get more fuel and quickly.” 

Mr Bannister thus provided a more in-depth explanation than that issued by BPL, which merely referred to “fuel logistics” issues at its Blue Hills power plant.

It added that Sun Oil Ltd “has assured that all necessary steps are being taken to remedy the matter, and we are working jointly to stabilise the power supply while corrective actions are implemented. Until the solutions are fully implemented, some customers may experience short outages,” BPL added.

It is unclear whether Sun Oil has agreed to reimburse BPL or provide compensation for the allegedly bad fuel, with Mr Bannister saying BPL will “work with them to ensure that whatever the challenges are financially they’ll be worked out”.

One BPL source, speaking on condition of anonymity, questioned whether “inexperience” had played a part and the utility had allowed its fuel tanks to become too low, resulting in algae rising from the bottom that needed to be cleaned out.

Kyle Wilson, the Bahamas Electrical Workers Union president, said BPL using a bad batch of fuel is a “rare occurrence”, and no major power disruptions should be expected over the summer as a result. 

He added: “The issue with the planned power outages at BPL is not a generation issue. The engines are working fine; it is just that BPL has to keep changing filters on the engines because of bad fuel they had used.

“Sometimes the oil comes with sludge or other contaminants that can disrupt the engine’s performance because the engines need to run at a certain level of pressure in order to work optimally.”

Mr Wilson further argued that the fuel supplier had to take responsibility, saying: “Sometimes you expect your vendor to provide you with a certain level of fuel, and the fuel through shipping can become contaminated.” 

Suggesting that BPL can put temporary supply in place quickly, he said: “The Government ,as it stands, we still have Aggreko. The third party that the company has a contract with to provide power, they have small one Mega Watt (MW) generators that they can dispatch very quickly. There are provisions that the company can use to keep the power on this summer.” 

Mr Bannister said BPL is working with Sun Oil to “get fuel that is not contaminated”, adding: “We are anticipating that things will work out OK. If there’s outages, they’ll be short, there’ll be in isolated areas, but we don’t anticipate that there’s going to be any widespread outages.”

Not committing to whether BPL will force the supplier to reimburse it for the contaminated fuel, Mr Bannister said: “These challenges have always to be worked out with the supplier appropriately. You have reputable Bahamian companies that have done it for years, and BPL will work with them to ensure that whatever the challenges are financially, they’ll be worked out.” 

The overall cost to BPL is still being worked out, but Mr Bannister said he understands that BPL has gone through a “container load” of filters because of its contaminated fuel challenge.