The Bahamas Chamber of Commerce and Employers Confederation (BCCEC) claims the government will face "a blame game between all parties involved, huge cost overruns and massive litigation" unless it awards a contract for the responsibility of generation needs to an entity with an "impeccable track record".
Commenting following the latest announcement by KPMG (Bahamas) regarding the Bahamas Electricity Corporation (BEC) reform process, the chamber also expressed disappointment with the government for continuing to "remain so secretive" with regard to information about BEC, saying the KPMG (Bahamas) release on the reform process "leaves as many questions unanswered as it answers".
Last Wednesday, KPMG (Bahamas) stated that the government now plans to create a new company, owned by BEC, into which the assets and operations of BEC will be transferred. The company will have two divisions - one for transmission and distribution and one for generation. Generation may be "split" from this company at a later date, said the company.
It added that negotiations will now be entered into for a management agreement, which will cover issues such as optimization of existing assets, installation of new "dual fuel" generation capacity and fuel supply agreements.
Suggesting that the government has entered into a "final negotiation" phase with a short list of bidders, KPMG (Bahamas) said it is intended the process would conclude by November.
No further information was provided on who the remaining bidders are, or on their proposals.
In a statement, the BCCEC questioned the announcement, claiming it left much to the imagination. The organization has, to date, been critical of the secrecy surrounding the BEC reform process, suggesting a decision so important should not be made without greater information sharing and input from the wider private sector.
Speaking yesterday via the statement, the BCCEC called on the government to ensure it negotiates with "a respected and highly experienced company".
This, it suggested, would be one which would "own the entire process from design to operations, one who has built and continues to operate numerous plants successfully and with whom it can demand accountability and a lower costs of electricity, as benchmarked in the BCCEC Oxford Economic Study (22 cents per kilowatt hour)."
If the government opts to move forward with a company offering a price higher than this, the people of The Bahamas "will deserve a detailed explanation", added the chamber.
It added: "The private sector and many others are interested in a transparent process that clearly articulates what the ultimate cost of electricity will be to the consumer; that electricity will be provided on a more reliable basis than it has been in the past; that environmental issues are addressed; that Bahamians will be involved in the construction and operation of the facility; that Bahamians have the opportunity to invest in any new venture; and that government-owned monopolies that are not competitive, efficient and or profitable are sold to companies that are experienced in running them in this fashion.
"Anything less is unsustainable long term and risks pushing the country, businesses and citizens into greater economic hardship. The country, nor its businesses or people, are in any financial position to get this process wrong. It is imperative that competitive electrical prices are attained in the very near future in order to foster GDP growth, reduce unemployment and reduce our national debt."
Last week Guardian Business learned that the government has yet to select a "preferred bidder" in the Bahamas Electricity Corporation's request for proposal process, but has narrowed the field to four in a move which has excluded a U.S. bidder - Caribbean Power Partners - whom the U.S. government had vigorously supported and whom the chamber had partnered with on a report.
That report, which demonstrated its bid, could provide major cost savings and a huge growth boost over the 25-year life span of the project.
China State Construction and Engineering Corporation is among the four remaining bidders, however Guardian Business has been informed that the government is sensitive to the potential risks - both in terms of its relationship with the U.S. and otherwise - of handing the nation's control of its power generation to a foreign state-owned entity.

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