Dear Editor,
Executive Chairman of the Bahamas Electricity Corporation (BEC) Leslie Miller and the Progressive Liberal Party (PLP) government are both determined to follow through with their pledge to offer a 10 percent discount in light bills to BEC customers in the not too distant future. The chairman has also vowed to reconnect 7,000 disconnected customers. According to Miller, 50 percent of these customers owed less than $2,000.
Earlier in the year, Miller projected a loss of a staggering $50 million for the current year to end September 2013 for the struggling government-owned corporation after announcing that BEC had lost $12 million in the first quarter. However, he has since then revised that figure to $22 million, which in my view is still a massive loss. BEC suffered a net loss of $18 million in 2012.
Miller has announced several initiatives that his government hopes will save BEC tens of millions of dollars annually. It is hoped that these cost-saving measures will then be passed on to consumers. Not surprisingly, BEC imports 99 percent of its petroleum products. The government will exempt BEC from excise tax payments on its fuel imports, which is projected to save the corporation in the neighborhood of $35 million a year.
Miller has locked horns with the Bahamas Electrical Workers Union over the government's decision to implement a shift system for BEC workers in order to decrease the huge overtime payments workers were raking in for years. In 2012, BEC paid out over $11.8 million in overtime alone. Clearly there will be inevitable factors beyond the government's control with respect to the price of oil on the international market, notwithstanding Miller's pledge to reduce the electricity bills of consumers.
As of July 28, 2013, the price of a barrel of crude oil was pegged at $104.70. The Organization of Petroleum Exporting Countries, better known as OPEC, has been accused of manipulating oil prices. In 2012, OPEC countries earned $982 billion in oil export revenues. That's a mere $18 billion short of $1 trillion. For what it's worth, the world has become an oil glutton in the past several decades. Currently, the government owes Shell West $86 million. In 2012 alone, the government spent a whopping $386 million on fuel. As a classical capitalist, I am opposed to the state meddling in the affairs of the private sector. I don't believe governments were meant to be competing with their citizens in the private sector. When you look at it, the government has lost hundreds of millions in corporations such as BEC, Water and Sewerage and ZNS.
The government will never recoup the money it has lost on these corporations. Sooner or later, the government must bite the bullet and sell these unprofitable corporations. In the meantime, the government should give serious consideration to the outstanding proposal of FOCOL Holdings and its principal, noted businessman Franklyn Wilson. According to the July 25 edition of Tribune Business, FOCOL, along with the Canadian electricity giant EMERA and the Finnish engine and turbine manufacturer Wartsila, have proposed to construct a 100 megawatt multi-fuel power plant in New Providence, on land owned by FOCOL. Wilson says that this plant, which will be managed and controlled by Bahamians, will save the government in excess of $100 million annually.
The plant will be able to utilize a variety of fuels, which will be a crucial factor in reducing the cost of electricity for consumers. According to Wilson, the trio of aforementioned companies will construct the plant at no cost to the government, under a build/own/operate arrangement. Wilson views this proposal as a win-win for everybody. I agree. FOCOL Holdings, in my view, has given the government an offer it just cannot refuse. Under such a generous proposal, the government cannot lose. If this venture fails, the government will suffer no loss, as it is not being asked to contribute one farthing towards the proposal. On the other hand, if it succeeds, the government will save at least $100 million annually. Think about it: This means that the state would save $1 billion in a mere decade. The government could then use those savings and service its $5 billion national debt.
I think it was Albert Einstein who once said that insanity is doing the same thing over and over again and expecting different results. Successive governments have tried the same thing over and over again at BEC, and look where it has gotten us? The Christie administration should by all means accept the proposal that has been put on the table by FOCOL and its two partners and run with it. After all, what does it have to lose?
- Kevin Evans
Click here to read more at The Nassau Guardian
