The Tribune

• Chair queries ‘basis’ for FOCOL/Shell talks

• Multiple parties have proposals before Gov’t

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The Opposition yesterday accused the Government of negotiating major multi-million dollar contracts “in the dark” as it emerged multiple parties have approached it with proposals for Bahamas Power & Light (BPL).

Duane Sands, the Free National Movement (FNM) chairman, asked “on what basis” has the Davis administration chosen to negotiate with a joint venture involving BISX-listed FOCOL Holdings and Shell over a potential public-private partnership (PPP) involving the supply of utility-scale solar power and liquefied natural gas (LNG) fuel to BPL.

Speaking after it was reported that Bahamas Utilities Holdings, a FOCOL subsidiary, was reported to be “in the infancy stages” of negotiations with the Government, he told Tribune Business: “I’d like to know exactly how it is that a particular private provider winds up being the preferred partner for a national corporation.

“Perhaps there’s more to this story than they’re telling us, but in the absence of disclosure it becomes very important to understand on what basis does a single provider or a single private entity become the partner of the Government? We’d like to know.” 

Dr Sands said he was casting “no aspersions” on FOCOL, but said the nature of the revelation and seeming lack of process raised questions. Sir Franklyn Wilson, chairman of FOCOL Holdings, which operates the Shell brand, declined to comment when contacted by Tribune Business. “I’m just not in a position to comment on that,” he said. “I just cannot really go into that. I don’t want to say anything about it. I cannot.”

Pedro Rolle, BPL’s chairman, was said to have written a memorandum to other Board members to inform them that “the finer details of the proposed agreement” with Bahamas Utilities Holdings “are still being negotiated at the senior government level”. This implies that talks are being held at the Cabinet, Cabinet committee and/or senior policymaker level, and raises several questions.

No open tender process appears to have been conducted for BPL, which would enable all interested parties to bid under the same terms and conditions, even though the Public Procurement Act - and reforms to purportedly make the legislation even more transparent, and provide greater accountability and taxpayer value for money - recently passed through Parliament and received significant public focus.

And, based on Mr Rolle’s memorandum, it appears that BPL’s Board and senior management are playing little to no role in the talks. Dr Sands blasted: “This administration has taken the approach that the entire procurement process, since coming to office, has been in the dark. There’s no transparency. We don’t know Bahamian taxpayer dollars are being spent.”

The FNM has frequently blasted the Davis administration for allegedly violating the original Act by failing to publish all public sector contracts awarded since it took office in September 2021, along with the identities of the winning bidders and the dollar value of the award.

The Government, though, has argued that its predecessor left in place “unworkable” legislation that was unsuited to the practical realities of The Bahamas and how government operates. It asserted that key posts required by the Public Procurement Act had not been filled, and that there had been no capacity building in the public service to ensure it could be implemented. It has also pledged to publish contract award details.

“They are proceeding as if they are a law unto themselves,” Dr Sands argued. “When you are talking about my money and your money, I have a right to know a contract is being awarded, and on what basis and to whom. This is par for the course. This is the ordinary way of doing business for this administration, and they don’t see it - given their super-majority in the House of Assembly - as something they need to change.”

Well-placed Tribune Business sources, though, revealed that FOCOL Holdings (Bahamas Utilities Holdings) and Shell are far from the only party interested in BPL. “There are a number of other parties with proposals in front of the Government,” one confirmed, speaking on condition of anonymity. “All of the usual suspects are at the table and then some. None of them ever left the table.

“This article gave the impression that the FOCOL group are the only guys at the table with the Government, when nothing could be further from the truth. It’s giving people the impression they are the last ones at the table and are finalising their deal, and that’s not the case. It couldn’t be further from the truth.”

The FOCOL/Shell partnership, based on information disclosed, is offering to supply BPL with power generated by utility-scale solar as well as LNG fuel. The proposal is also offering to manage some of BPL’s New Providence generation assets and, from that perspective, bears a striking resemblance to the power plant deal with Shell North America that was left behind by the Minnis administration - albeit with FOCOL now included.

Those negotiations had focused on Shell taking over responsibility for New Providence’s baseload generation via 220 Mega Watts (MW) at Clifton Pier, much of which was already installed. The multinational energy giant was also to finance and construct an LNG regasification terminal so that this fuel would be available to drive the new power plant’s engines.

Following the fuel hedging controversy, the Davis administration has yet to publicly reveal a comprehensive strategy for dealing with cash-strapped BPL’s multiple issues. These include the long-awaited, and much-needed, refinancing of its legacy debt that was supposed to have been done by the Rate Reduction Bond (RRB) issue that has been shelved after global interest rates moved against it.

One contact suggested the Government will soon be under pressure to unveil a BPL solution when summer electricity bills peak in a few months’ time due to the 163 percent fuel charge hike compared to October 2022, as the utility moves to reimburse Shell for $90m in under-recovered fuel costs.

“They have to make a decision now,” they said. “If everything goes perfect it will take three years to build an LNG regasification facility. If the Government wants to cut the ribbon before the next election, they will have to do something now.”