More than a month has passed now since Prime Minister Perry Christie returned from Beijing, China, and despite initial reports that he would name the company chosen to manage the Bahamas Electricity Corporation (BEC) upon his return from China, no announcement has been made to date. And now, according to comments from Bahamas Electricity Corporation (BEC) Executive Chairman Leslie Miller, the administration's delay in completing the deal is having a material cost. Without the deal in place, BEC cannot move forward with its plan to provide power for Baha Mar when it opens next month.
The plan could cost up to $200 million, Miller said. In fact, after Christie's return from Beijing, the decision to announce the company selected was again put on hold, this time until after the Caribbean Energy Security Summit hosted by U.S. Vice President Joe Biden in Washington, D.C. at the end of January. At that meeting, the prime minister said he had been given the assurances he needed about the integrity of one of the shortlisted companies and that an announcement was imminent.
Following Christie's return from D.C., Guardian Business revealed that PowerSecure International, Inc., - which some insiders said had supposedly topped the shortlist may already have been awarded the contract, given Deputy Prime Minister Philip Brave Davis' statement that a company had been selected - is facing two separate class action lawsuits filed in U.S. district court accusing the power management company of securities fraud. It appeared then that Christie had delayed the announcement until he was given assurances of the company's integrity - which were reportedly given by U.S. Secretary of State John Kerry, among others.
Still, no announcement has been made. As noted, Miller's assertion - made in the context of discussing BEC's plans to provide sufficient power for the mega resort scheduled to open on March 27 - underlines the cost of the Administration's delay.
Miller said, "Right now are waiting now for the Prime Minister and the Cabinet to give approval to whomever that partner is going to be that will be responsible for the management of BEC. We have plans for a new [128 MW] plant at Clifton, which will give us more than sufficient power to enable us to undertake that investment, which is going to be about $185-200 million, including the transmission lines to move that power from Clifton up town. That's a major investment that will have to be made jointly between the board and the new management of BEC. So until the government finalizes a agreement with whoever they're going with, that sort of puts us in a corner."
Observers had assumed that Christie would use the occasion of the mid-year budget debate to announce the company selected to manage BEC, but he opened that debate without addressing the matter at all.
In 2013, the government announced a restructuring and at least partial privatization of BEC. In the beginning, the proposal was to split the company into two wings: one for power generation and the other for power distribution. Christie later decided that the focus ought to be on dealing with BEC's $450 million "legacy debt" and abandoned the idea of breaking BEC up, instead choosing to pursue a management agreement with a company that could deal with the debt. Christie and Davis have both identified the Nassau Airport Development Company (NAD) as the model for this path.
At one point, it was believed that China State Construction and Engineering Company (CSCEC) - the parent company of Baha Mar/British Colonial Hilton investor China Construction America - was the front-runner. However, once the terms of the deal changed and the Christie administration focused on management and debt restructuring, CSCEC appeared to lose interest. Cayman-based Inter-Energy was the other shortlisted company.
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