The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

FOCOL Holdings chairman has accused the Opposition’s leader of “political gimmickry” and “petty foolishness” over his demands for greater disclosure and transparency on the Government’s energy reforms.

Sir Franklyn Wilson told Tribune Business that Michael Pintard had said “nothing of substance” in his call for the Davis administration to provide more and better details, including pricing and terms, for its liquefied natural gas (LNG) supply and regasification deal with BISX-listed FOCOL and Shell.

And, accusing the Macro City MP of engaging in “the same old immaturity” with his concerns and criticisms, Sir Franklyn asserted that the $180m fuel cost savings that the Government’s energy reforms will achieve “in the fullness of time” are very “real”.

Arguing that it was unrealistic to expect the Government to disclose all relevant information on the same day the deal was signed, the FOCOL chief voiced optimism that all energy-related reforms will ultimately be tabled in Parliament when they are concluded. He also suggested Mr Pintard had exposed himself to scrutiny on why the Minnis administration, of which he was part, failed to execute such itself.

Mr Pintard, though, yesterday countered that he and the Opposition are “making the case for the Bahamian people” and standing up for the public’s interest over the Davis administration’s reforms. In particular, he argued that the Government - while using “the same template” left behind by the Minnis administration - has dropped plans to establish “a shareholder society” in favour of a “narrow” group of private sector interests.

He, and other former Minnis administration sources speaking on condition of anonymity, confirmed that its own energy reforms had planned to create two companies initially named ‘PowerCo’ and ‘TerminalCo’. The former would have owned New Providence’s proposed 220 mega watt (MW) baseload generation plant, while the latter held the LNG regasification plant also to be constructed at Clifton Pier.

‘PowerCo’ would have been 51 percent majority-owned by Shell with the Government initially holding the remaining 49 percent equity interest. And ‘TerminalCo’ would have been 65 percent majority government owned via a special purpose vehicle (SPV), with the remaining 35 percent offered to Bahamian institutions and high net worth individuals via a private offering.

Mr Pintard said this structure was designed to ensure the Government received substantial revenues from the energy reforms, with at least a portion likely deposited into a sovereign wealth fund. And, ultimately, both ‘PowerCo’ and ‘TerminalCo’ would have been taken public via initial public offerings (IPOs) that would have allowed small, individual, retail investors to gain an ownership stake in Bahamian energy.

However, the Davis administration has elected instead to hand the LNG terminal to New Providence gas, a joint venture between FOCOL and Shell. And, given that the Government itself will be responsible for buying the LNG from Shell via an SPV, it appears that the multinational fuels giant will be able to ‘double dip’ - earning at both the LNG supply and regasification stages.

And, with no IPO of the LNG terminal company seemingly planned, Mr Pintard and others argued that the Government has dropped the concept of widespread Bahamian equity ownership and replaced this with a tightly-owned private consortium that will benefit relatively fewer persons. “They have kept the same structure and swapped out the players,” one source said of the changes.

The Opposition leader, arguing that all Bahamians “should have a shot at investing in these assets”, yesterday asserted that he and his party are “carrying water for the people of The Bahamas” by scrutinising the Government’s energy reforms. And he renewed criticisms of the failure to open the process to competitive bidding as Bahamians do not know “if they are getting the best price and terms’.

Sir Franklyn, though, reassured Bahamian businesses and households that major light bill cost savings will result from reforms he branded as “one of the most significant events that have happened in the history of the country”. He pointed to what he described as “clarity of purpose”, and said Shell’s involvement under two successive administrations “was evidence of continuity of government, a sign of a vibrant democracy”.

The FOCOL chairman, though, was less charitable about Mr Pintard’s subsequent intervention. The Opposition leader, in a statement on Thursday, argued that FOCOL’s involvement had occurred “without going through the required transparent bidding process” and seemingly in contravention of the Public Procurement Act’s stipulation.

And, asserting that the Government is “handing over hundreds of millions of dollars” in Bahamas Power & Light (BPL) assets and revenues “to politically well-connected private business interests”, Mr Pintard called for the Government to disclose details surrounding the pricing for LNG and energy it will fuel, plus specifics on FOCOL’s role, the deal’s terms and who will own the pipelines taking the gas to the power plants.

“It surprised me, and to some extent disturbed me, that the leader of the Opposition chose to get into this political statement, the same old politics, although he really had nothing to say,” Sir Franklyn blasted. “If you analyse the statement, the little he said, there was nothing of substance.”

As for comparisons between the Minnis and Davis administration’s plans, Sir Franklyn said the latter and FOCOL were executing and implementing whereas the former had failed to do so. “If you had a better plan, implement it,” he argued. “He was a member of the Cabinet then. If you had a good plan, execute it. That’s what people elected you for.

“Why cause this controversy with all this? It’s so unwise, so immature in my opinion. At some point we’ve got to stop this foolishness. We have to be more mature, talk sense. I understand the role of the Opposition is to oppose, but at least have a point when you oppose. Have a point.

“What is a plan if you don’t execute it? All he’s done is invite questions about why they didn’t execute it? He’s invited the criticism. He knows why he couldn’t do it. The fact of the matter is this is a complex matter. This is not something you draw up on a piece of paper and do. This is a very complex matter, and any suggestion to the contrary is in effect an adverse finding on him. It just shows the same old immaturity.”

Sir Franklyn said there was “a mechanism” for the Government to disclose agreements such as the energy reform strategy by tabling them in Parliament. “The idea this is something secret is the same old, same old petty foolishness,” he added, suggesting that Mr Pintard and the Opposition would be able to view them and gain the answers to any questions then.

“He will see the country will save, in the fullness of time, $180m per annum based on the current fuel realities in The Bahamas,” the FOCOL chairman told Tribune Business. “That’s significant, $180m per annum in fuel savings based on all the models. It’s all there. He will have his opportunity. The Prime Minister, whenever it is, will answer his questions. That’s how the process goes.

“All I’m saying to the Bahamian public is there ain’t no complication with this matter. The savings are real.... This is not gimmickry, this is not gimmickry. This is not time for the same old, same old, creating controversy where there’s nothing to be controversial about. There’s nothing to be controversial about.”

Mr Pintard, though, argued that he and his party are looking out for the Bahamian people’s interest while Sir Franklyn is focused on FOCOL and its shareholders. He conceded that the Minnis administration, in whose Cabinet he served, “missed a window of opportunity” to execute on its own energy reform plan but accused the Davis administration of exactly the same failings over the abandoned rate reduction bond (RRB) refinance.

Turning to the present, the Opposition leader retorted: “The real issue here is the Government has entered into yet another deal, a multi-year deal, a generational deal. The Government has entered into this deal without the benefit of competitive bidding.

“We have no way of knowing whether we are getting the best possible price, and I don’t believe they have been transparent in terms of what the ask is of Sir Franklyn and his partners in terms of the per kilowatt hour (KWh). We do not know if we are getting the best possible price.

“If Sir Franklyn is saying we are engaging in political gimmickry, what we are actually doing is asking the Government to follow what is prescribed in the procurement law, and in the absence of doing what is a proper procurement process and using competitive bidding, they are duty-bound to explain why they are doing this,” Mr Pintard added.

“We have a generational deal being signed with pretty much a direct award. We are deeply concerned about that.” The Opposition leader then voiced his concerns about abandoning the IPO-led plan for broad Bahamian ownership of the generation and LNG reforms, as well as dropping revenue-earning opportunities for the Government, and replacing them with private interests in the shape of FOCOL and Shell.

While acknowledging that Sir Franklyn will likely “make the case” that FOCOL’s Bahamian shareholders will benefit, Mr Pintard said there will likely be no chance for others to reap the benefits from energy reforms and BPL assets they have spent years paying costly light bills to help maintain.

“There’s no opportunity for the average Bahamian or Bahamians unable to reach that high level of wealth,” he added. “We are making the case for the Bahamian people. He is clearly making the case for himself and his shareholders, when we believe this is a bad agreement for the Bahamian people. It may be a good deal for him, it may be good for Davis who appears to be cash-strapped as a government.

“I don’t wish to be in any acrimonious discussion. Sir Franklyn in his private capacity is working to build private wealth for himself and those associated with him. My job is to fight for the Bahamian people, and the best plan is to ensure the Government gets a substantial amount of revenue on those assets that have for decades caused it to pump hundreds of millions of dollars into BPL.

“The Bahamian people have also spent hundreds of millions of dollars to maintain and refit those assets. Now those assets are being handed to other people. Why shouldn’t the Bahamian people have a shot at investing in those assets? That’s who we are carrying water for: The people of The Bahamas and the sovereign wealth fund. That’s what our interest is and why we signed up for public life.”