The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

PRIVATE sector executives yesterday urged the Government to drive for “cost competitive, stable” electricity and not be held hostage by Bahamas Power & Light’s (BPL) trade unions over energy reform.

Gowon Bowe, Fidelity Bank (Bahamas) chief executive, told Tribune Business the debate over BPL’s fate is “always overridden by emotional sentiment” largely driven by its two unions that frequently “jump the gun” over their members’ interests whenever changes that would benefit the majority of Bahamians are discussed.

Asserting that only “overpaid and unproductive” BPL employees should “fear privatisation” or outsourcing of the utility’s management, he added that the energy monopoly is an “insolvent state-owned enterprise (SOE) that is prohibiting the country” from progressing with reforms that could reduce energy costs, improve supply reliability and accelerate the transition to cleaner, more environmentally-friendly fuel.

Mr Bowe, arguing that “an insolvent, unstable electricity company that is owned by the Government cannot be the answer we want to hear”, said he was all for BPL reform provided it is handled in “an open and transparent manner”. It is questionable whether this has been achieved based on what has been revealed so far, and how it has been divulged.

He was backed by Daphne DeGregory-Miaoulis, the Abaco Chamber of Commerce’s president, who told this newspaper that getting the best possible deal on a cheaper, more consistent energy supply “150 percent should be the focus” rather than obsessing about how this is done.

She added that “whoever the ‘P’ is” in a public-private partnership (PPP) arrangement for improving BPL is “irrelevant” as long as they can deliver what Bahamian households and businesses require to lower the cost of living and be competi- tive in the 21st century economy.

Both spoke out amid concerns that the knee-jerk union reaction to proposed BPL reforms, the full details for which have yet to be publicly disclosed by the Government, threaten to obscure the forest for the trees and derail much-needed change at a utility where the status quo is regarded as untenable by most Bahamians.

The Bahamas Chamber of Commerce and Employers Confederation (BCCEC), in a statement issued yesterday, also gave cautious backing for long- awaited energy reforms seen as vital to reducing a key cost item for its members’ businesses and making them more competitive.

“The Chamber and its members have long advocated for changes at BPL for the benefit of consumers,” the private sector advocacy body said. “We trust that the current negotiations at BPL will result in more stable, clean and cost effective energy for businesses and the country at large. We will continue to monitor this developing situation and await further details.”

Mr Bowe, echoing this position, told Tribune Business: “To be honest, I think the conversation about BPL is always overridden by emotional sentiments and, unfortunately, driven largely by the unions which often jump the gun about what it means to their members.”

This is exactly how the Bahamas Electrical Workers Union (BEWU) and Bahamas Electrical Managerial Union (BEMU), and their leaders and members, reacted when the Government presented its thinking to them via a a powerpoint presentation given by JoBeth Coleby-Davis, minister of energy and transport. They voiced concerns for their jobs and benefits, and suggested there was a ‘sell out’ to foreign entities.

However, Mr Bowe said The Bahamas simply cannot afford to live with BPL’s high costs, unreliable supply and aged infrastructure any longer because it is holding back economic growth and development. “When we look at BPL in its current state, we have an insolvent SOE that is ultimately now for all intents and purposes prohibiting the country from moving forward with energy reform,” he added.

“We are not moving for- ward aggressively with the Carbon War Room commitments because if more people come off the grid that means less revenue is generated by BPL and the Government will have to shoulder more of the debt obligations.

“We have an insolvent company to operate generation and transmission and distribution equipment that should have been retired a long time ago, and which is leading to excessive instability and the cost of energy supply and reliability is stifling economic growth in the country.”

Tribune Business revealed yesterday how BPL’s financing needs “exceed $500m”, and would require the Government to provide at least a $100m guarantee to underpin securing the necessary capital. Prime Minister Philip Davis KC, admitting that BPL is in “dire straits”, signalled that the Government does not possess such financing ability hence the search for private partners to fill the gap

Mr Bowe, noting that national security, “giving our birthright away to an international entity”, and the impact on Bahamian jobs have all been raised as arguments against change at BPL, said the Government and wider Bahamas need to focus on “the over- riding objective for the energy sector”.

He argued that this should be price/cost competitiveness, stable and reliable electricity supply and an infrastructure “that allows for national progress and development” via a utility that is profitable and “not a drain on the public coffers”.

Noting that the entire Bahamas relies on energy, Mr Bowe said the country at present is “saddled” with unreliable, unstable supply that is often cut during thunderstorms and when it rains heavily.

The Fidelity Bank (Bahamas) chief also argued that continuing to rely on New Providence’s BPL customers to supply the Family Islands is “unsustainable”, and called on the Government to determine whether it wants to be solely a regulator as opposed to an owner/operator in the energy sector.

Pointing out that any electrical utility will want a skilled workforce that knows the network and its layout, Mr Bowe told Tribune Business: “The union should not fear privatisation. The only ones who should fear privatisation are those over-paid, unproductive in relation to their salaries.

“If I had one word of advice to the Government it would be to remember utilitarianism: The greatest good for the greatest number of people. There are groups of people, as we saw, that fear change, and there will be political operatives that always oppose change and vested interests that force change in their favour, but they have to keep their eye on helping the widest population.

“Government has to make the best decision in the interest of the country, and having an insolvent, unstable electricity company that is owned by the Government is certainly not an answer we want to hear. A well-financed, newly-equipped and well-run and efficient electricity company, the majority of the population will support as long as it is done in an open and transparent manner.”

There are questions over whether the Davis administration has met such requirements to-date, but Mr Bowe said it was critical it does so to ensure public buy-in and acceptance of any BPL reforms. He added that the Government can also impose financial and other covenants in the contract with any private entities, as well as key performance targets and benchmarks they must hit.

Meanwhile, Mrs DeGregory-Miaoulis said: “Whoever the ‘P’ is in PPP doesn’t matter, it’s irrelevant, if they give us the best possible product at the best possible price so that it doesn’t cost an arm and a leg and doesn’t damage our equipment.

“Why should we be paying more when we could be paying less? The first and foremost thing should be to get the price down and get what we need at the best price. I’m a retail person. Cheaper, more reliable energy means it will be more affordable for the consumer and less break downs and maintenance.”