Stellar Waste to Energy Bahamas were told last year that their proposal was not approved to progress to the second phase of the energy reform process, KPMG (Bahamas) has confirmed.
Following a detailed review of the company's proposal by the government's financial and technical advisors and "consideration by the ministerial committee" the company, which is now at the center of a political controversy over the signing of a letter of intent with them by a junior official, was informed on October 1, 2013 that they would have to exit the request for proposal prior to reaching the "pricing" stage.
Simon Townend, head of advisory for KPMG (Bahamas), the government's key advisors in the energy reform process, confirmed the official status of SWTEB's proposal as far as the formal energy reform process is concerned in an emailed response to inquiries from Guardian Business.
He said the decision with respect to SWTEB's proposal was taken after they, like all bidders, were "assessed on a wide range of financial, technical and other appropriate criteria".
The disclosure would appear to raise yet more questions about why Renward Wells, parliamentary secretary in the Ministry of Works and Urban Development, signed a letter of intent with the energy company, as first revealed by Guardian Business last week.
That signing, which Wells has yet to speak on, has led to calls for his resignation from both Prime Minister Perry Christie and Opposition Leader Dr. Hubert Minnis, out of concern that he may have breached parliamentary protocol given that Deputy Prime Minister and Minister of Works Philip Davis has indicated he knew nothing of the signing and did not give instructions for it.
Minnis suggested that Wells, however, would not have signed the document had he not received such instructions and questioned the fact that SWTEB principal Dr. Fabrizio Zanaboni, in an interview with Guardian Business, said the company "has the support of the prime minister".
SWTEB, as outlined in the letter of intent seen by Guardian Business, wishes to develop a $625 million to $675 million waste-to-energy plant at the New Providence landfill, with the goal of producing 75 to 80 mega watts of power, or between 29 to 33 percent of New Providence's energy needs, from incinerating garbage.
The LOI would have provided for the company to engage in studies which would lay the groundwork for the construction of the waste-to-energy plant within six month's time, once a further heads of agreement had been
hashed out with the government.
Subsequent to the political drama that has spun out of the signing of the LOI, SWTEB's principal, Dr. Fabrizio Zanaboni, has sought to defend the project. In doing so, he suggested it holds major benefits for the country and has come to the fore via a legitimate process which saw SWTEB put forward their bid during the ongoing RFP process with respect to restructuring BEC.
Specifically, Zanaboni had indicated that SWTEB submitted a proposal under the "ancillary proposals" sections of the RFP, relating to renewable energies connected to the BEC privatization.
In comments made to Tribune Business, the investment banker said that this also negated the need to undertake any other tender process with respect to a waste-to-energy plant at the landfill site, telling that newspaper: "Personally I do not see the need to do a specific RFP for waste-to-energy, since the energy reform already gave scope to such add-on sections and we have taken advantage of such opportunity."
However, Townend's comments would appear to weaken this argument, given that SWTEB's proposal was ultimate rejected by the government and its consultants at a fairly early stage.
In his response to Guardian Business' inquiries about SWTEB's position that it had engaged in the RFP, Townend said: "We confirm that Stellar Energy submitted a technical proposal in the first phase of the RFP process for energy reform. After detailed review of their proposal by the financial and technical advisors, and consideration by the Ministerial Committee, they were informed on October 1, 2013 that they had not been short listed for the second phase of the process (the pricing proposal phase)."
Questioned about how these "ancillary" proposals fit into the broader energy reform process, given that the government had stated last year that it intended to delay dealing with alternative energy reforms until after the restructuring of BEC was complete, Townend stated: "Under the RFP bidders were permitted to provide alternative proposals to the approach outlined for the overall energy reform, on the condition that they submitted a primary proposal conforming with the RFP.
"In the case of entities wishing to offer renewable energy solutions under independent power producer agreements, they were advised that such projects would be considered at a later date subject to future renewable energy procurement processes once the overall energy reform process, and restructuring of BEC, were complete."
While Townend indicated that the decision to exclude SWTEB was taken based on an assessment of the project based on a variety of criteria, his statement that those who had not submitted "primary proposals" relating to the reform of BEC itself but only for independent power projects - as SWTEB appears to be wanting to do, based on the contents of the LOI now signed - suggests a failure to conform with this requirement in itself could have been a reason to exclude the company at that stage.
Some sources have questioned whether, despite SWTEB's proposal for a waste-to-energy plant having been shelved at this point, the delays in the government's efforts to overhaul BEC itself may have provided cause to rethink the SWTEB project as a less complex means of achieving some energy costs reductions in the medium term.
The LOI signed with SWTEB involved the company itself putting up all of the financing for the studies and construction of the plant.
Wells, a former chairman of the National Energy Taskforce, had long been a proponent of overhauling operations at the landfill, referring to it in August 2013 as a "lose-lose situation" for the country with "enormous potential" to be put to better use as a source for recyclables and energy.

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