The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The Opposition’s leader yesterday argued that the Government “owes an explanation” for why it has retroactively revised the debt owed by Bahamas Power & Light (BPL) going back almost two years.

Michael Pintard hit out after the Ministry of Finance’s just-released public debt bulletin revealed that the figures for BPL’s debt have been hiked by around $70m for each of the quarters going back to end-June 2022 when compared to the numbers contained in the prior report.

As an example, the public debt bulletin for the 2023-2034 second quarter showed BPL owed debts totalling $85m at end-June 2022. However, the latest report covering the 2023-2024 third quarter had revised this figure upwards to $159.2m - an 87.6 percent jump. In similar fashion, the second quarter report showed BPL’s debt peaking at $192.3m in March 2023, but this has now been revised to $266.4m.

“They owe an explanation,” Mr Pintard told Tribune Business of the revisions to BPL’s historical debt data. “There may be a logical reason. We’d like to hear what accounted for what they did.” And he suggested the latest BPL numbers showed the extra funds generated by the up to 163 percent fuel charge hikes imposed on Bahamians during 2023 have not been used for the purposes previously announced.

The Government and BPL previously said the fuel charge hikes, imposed between October 2022 to March 2024 as part of a so-called “glide path” strategy, were necessary to enable the utility to reclaim previously under-recovered fuel costs. It was also advertised as a essential to enable BPL to repay a previous loan advanced by the Government and thereby reduce its outstanding debts.

However, BPL’s end-March 2024 total debt stood at $255.4m. This represented just a $2.8m decline from the end-December 2023 figure just three months earlier, and only an $11m drop from the debt’s peak at $266.4m at end-March 2023. With the debt still so high, Mr Pintard argued it appeared the monies generated by the fuel charge hikes have not been used for the purpose stated by the Davis administration.

“On the surface of it, it does appear that the funds were utilised for purposes other than what was stated publicly,” Mr Pintard asserted. “The Government should come clean to help us understand what they have done and how they have executed this.”

Jobeth Coleby-Davis, minister of energy and transport, could not be reached for comment yesterday. However, she confirmed to the House of Assembly in February “that BPL was granted a $110m loan by the Government to address the under-recovery of fuel costs as a result of the COVID- 19 pandemic”. She has also previously reaffirmed that BPL has reclaimed a significant portion of the under-recovered fuel costs.

Given that the Government is not supposed to loan money to, or subsidise, BPL, the fuel charge hikes that peaked last summer were to finance repayment of this loan. They were also to raise sufficient sums to pay-off BPL’s “under-recovered” fuel costs that resulted from the utility not passing these on to consumers 100 percent - as required by law and regulations - over the 12-month period from October 2021.

“We are very much concerned,” Mr Pintard told Tribune Business of BPL’s latest debt figures. “We have asked the question of the Government, and also asked the question of URCA (the Utilities Regulation and Competition Authority). We have asked the Government why they have not satisfied in its entirety the BPL debt given that the ‘glide path’ was designed to do just that.

“What have they diverted these funds to? They have not revealed the terms of the agreement the Government would have made with BPL in terms of the interest rate and other conditions for the loan, and why they have not made that available.”

Mr Pintard said the Opposition has directed the same queries to URCA because, as the energy sector regulator that approved the ‘glide path’ strategy developed by the Government and BPL, it was “duty bound” to also “account for the funds raised and use of those funds given that they have not satisfied the objective for raising those funds. We are anxious to hear from the Government and URCA with respect to these questions”.

The Opposition leader also reiterated the argument that the Government’s loan to BPL violated both the Public Debt Management Act and the constitution because it was not accounted for within the approved budgetary appropriations authorised by Parliament.

Suggesting that the Government hopes this issue “will disappear”, Mr Pintard added: “The law, whether you look at the Public Debt Management Act or the constitution, does not provide for the movement of funds from the central government into state-owned enterprises except through Parliamentary appropriations or, again, outside the Budget cycle, by bringing the requisite legislation. The Government is glossing over that”.

Kwasi Thompson, the Opposition’s finance spokesman, echoed his party leader in a statement issued last night by demanding an explanation for the back-dated revisions to BPL’s debt numbers as well as why the millions of dollars collected from Bahamian businesses and households via last year’s fuel charge hike had not seemingly been used to pay this down.

“Now we have, with no explanation and no apology, a massive restatement of monies owed by BPL that differs from the previous report released just a few months ago by over $95m,” he argued.

“We have demanded an explanation as to why the monies collected from last year’s massive spike in the BPL fuel charges were not used to pay down this debt consistent with the express purpose approved by URCA. The Government has refused to give an accounting to the Bahamian people on what they did with the tens of millions in BPL fuel charges that legally could only be used to pay down the arrears.”