The matter concerning Parliamentary Secretary Renward Wells' signing of a letter of intent (LOI) with a waste-to-energy company on July 4 has escalated into a ball of confusion fueled by conflicting comments the deputy prime minister made on the issue, and the prime minister's deafening silence after asking Wells more than a week ago to resign from his position in the Ministry of Works.
This matter appears to be a small scratch that has festered into a huge sore simply because our leaders have again failed to attack and deal with this head-on.
What many people do not understand is if Prime Minister Perry Christie asked Wells to resign and Wells has not resigned, why has the prime minister not fired him?
Why has Christie not made a statement to explain the matter to the public?
In the absence of all of that, the level of speculation has mounted.
It is yet another self-inflicted wound for the Christie administration.
Had the prime minister addressed it immediately, the public debate might have been losing momentum right now.
Instead, it is building steam. Many questions are being asked.
The Wells matter is sharing the spotlight with important initiatives like the recently tabled constitutional bills and the Value-Added Tax Bill.
No answers are forthcoming.
After a two-week run in the press, the basics of this saga are well known: Wells signed the letter of intent for a $600 million-plus waste-to-energy plant with Stellar Waste To Energy Bahamas Limited (SWTEB).
It would involve the project developer putting up 100 percent of the cost of the development of the facility at the New Providence landfill.
After Guardian Business reported that Stellar, headed by investment banker Dr. Fabrizio Zanaboni, signed a letter of intent with the government, Deputy Prime Minister Philip Brave Davis said he was not aware of such a signing and Wells would not have the legal authority to execute such a letter.
Davis said of the LOI: "I know nothing about this. I know of Stellar Energy. I know this company had put in a proposal some time ago, and that's what I know about it.
"I know they would've met me once or twice to explain their proposal to me, but a matter of signing an LOI is something that would require Cabinet's intervention.
"I don't know that a parliamentary secretary would have authority to sign such a document without the direction of Cabinet. I don't know how this came about."
After The Nassau Guardian reported last Monday that Wells has been asked to resign, Davis said he still needed to determine whether Wells did anything wrong.
Wells had already confirmed to us that Christie and Davis met with him on the matter. He said he was prepared to resign if it would mean protecting the integrity of the Westminster system he swore to uphold.
We later learned that on the same day of our story revealing that Wells has been asked to resign, Permanent Secretary in the Ministry of Works Colin Higgs provided the deputy prime minister with a written opinion on the matter of the LOI.
While Higgs did not comment on whether Wells exceeded his authority in signing the document, he said the letter of intent was more a letter of interest and does not commit the government to anything.
"The document summarizes Stellar Waste to Energy (Bahamas) Ltd.'s (SWTEB) proposed waste-to-energy plant investment proposal and does not, in my view, commit the government of The Bahamas to any approvals in respect of the proposed plant or [power purchase agreement]," Higgs wrote.
We assume that the DPM will use that opinion to formulate his final views on this issue.
Higgs' opinion seems to suggest that too much is being made of the issue of Wells signing the document as the document carries no significant legal weight.
That said, the question of whether Wells had the authority to sign it is at the heart of this debacle.
It should be answered definitively by either the prime minister or the deputy prime minister, who has ministerial responsibility for the Ministry of Works.
While Davis initially indicated that Wells exceeded his authority in signing the letter, and the prime minister's request for Wells' resignation seemed to confirm this, the fact that no action has been taken against Wells suggests that Christie and Davis might have formulated their initial conclusions too soon.
Speaking to this issue last Monday, Davis said, "From all accounts there ought to be concern, but the question is whether he did anything wrong, or whether he did anything that in any way is contrary to established protocols.
"I will look into those things and have a discussion with him. He obviously would have an explanation for what he did. I will test that explanation and then we will see what happens from there."
The Tribune quoted Christie on Friday saying the government will speak to the matter "whenever we are ready to speak to it".
He said, "I'm sure the deputy prime minister, who has the ministry in which Renward works, will speak to it and Mr. Wells himself will speak to it."
This is after Christie asked Wells to resign.
Is there any wonder we are confused by all of this?
Again, Christie has not fired Wells. Davis' last public comments were that he was not sure if Wells did anything wrong.
What else are we to conclude about this matter?
Many people following this issue are left wondering whether Christie and Davis are even on the same page.
If Christie already asked Wells to resign, why the DPM still needed an explanation from Wells to make a determination on the matter is indeed perplexing.
Should the powers that be reach a clear conclusion that Wells indeed erred, Wells has an opportunity to demonstrate to the nation and create a clear separation between this new generation of politicians and the old, tone deaf generation of politicians, and take public responsibility for his error.
He has made it clear to us that he is prepared to resign from his position to preserve the integrity of the Westminster system.
That action would send a clear message to those in and outside of government that there are those amongst us who have honor and who do have respect for this system, which we are nurturing and building every day.
We have recently seen a litany of officials flaunt their positions in the face of conflicts of interest and questionable behavior on their part.
We trust that Wells does not fall victim to this. This would be a refreshing first step for us.
LOI
The letter of intent signed by Wells is a three-page document.
We have been unable to confirm who drafted it.
It states clearly that the agreement is "between the parliamentary secretary to the minister of works responsible for the Bahamas Electricity Corporation for and on behalf of the government of the Commonwealth of The Bahamas, of the one part, and Stellar Waste to Energy (Bahamas) Ltd.".
It states that the project developer has prepared a full proposal for the design, construction and operation of a waste-to-energy plant.
The expected delivery date for the plant is July 1, 2016.
The project includes a substation and connecting transmission lines from the plant to the grid now located on John F. Kennedy Drive.
The actual cost, configuration and performance of the waste-to-energy plant will be validated by an engineering feasibility study to be performed by SWTEB.
Stellar intends to sell the produced electricity output to the government under an exclusive agreement for a period of 25 years.
The LOI also requires Stellar to submit an acceptable proof of funding in the initial amount of $40 million, by way of a loan offer, which satisfies the government that it is in a position to begin the completion of a front end loading study.
As noted by PS Higgs in his opinion, paragraph six of the document makes clear the intention for SWTEB being entitled to compensation (to be agreed) from the government of The Bahamas should, the government fail to proceed with the power purchase agreement (PPA).
However, in paragraph seven, the PPA is subject to SWTEB obtaining National Economic Council (NEC) approval to invest in The Bahamas.
The company was to apply for NEC approval after signing the document, Higgs noted.
According to the document, the LOI is valid for 12 months, unless extended by mutual consent of the parties releasing the other from their respective obligations, if for any reason the project does not proceed and the intended project is terminated as a result.
"Both parties will bear their own expenses and opportunity costs incurred, if any, and to indemnify the other party from any claims whatsoever in this regard, with any expenses disbursed up to date of termination being forfeited," the LOI states.
Future
With the waste-to-energy project now shrouded in controversy, its fate is uncertain.
Asked last Monday if he spoke to officials from Stellar Waste to Energy, Davis said no and added that he did not intend to.
We are unsure whether that statement portends a doomed project.
We note that KPMG, the government's key advisor in the energy reform process, has confirmed that Stellar was told last year that its proposal was not approved to progress to the second phase of the energy reform process.
Simon Townend, head of advisory for KPMG (Bahamas), said the decision with respect to SWTEB's proposal was taken after it, like all bidders, was "assessed on a wide range of financial, technical and other appropriate criteria".
This has raised more questions about the signing of the LOI.
As there has been no explanation from Wells or the prime minister or deputy prime minister, it is not known by us, who, if any authority figure, gave Wells the green light for the signing.
There is widespread public perception that the parliamentary secretary signed the document only after receiving an indication from his superiors that the government had agreed to move in this direction.
But there is no confirmation that this is the case.
For the prime minister, there are multiple issues at play here.
There is the political issue.
His request for Wells' resignation then his ensuing silence when Wells did not resign plays into the perception that he is a weak and indecisive leader.
There is also a seeming conflict between the prime minister and his deputy. That has left room open for speculation on a power struggle between the two.
Then there is the issue of the integrity of the energy reform process and how this matter might threaten that.
As with other similar national controversies, Christie's failure to swiftly and clearly address the Wells saga is creating a distraction the government could do without as it approaches the mid point of this term.
Click here to read more at The Nassau Guardian
