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News Article

October 01, 2014
Miller defends Rodney Smith

Bahamians should not condemn Dr. Rodney Smith for asking for a $400,000 annual salary as president of The College of The Bahamas, Bahamas Electricity Corporation (BEC) Executive Chairman Leslie Miller said yesterday.
"People are only hitting out at him because he's a black Bahamian," said Miller, when asked his opinion on Smith's request.
"If it was a damn white foreigner, I'm sure you wouldn't get all this fanfare. That's typical negroes. A black man is only worth so much."
He added, "Would it have been the same if it was some white foreigner out of Canada, the U.K. or the U.S.? As a country, we need to grow and get real.
"He's trying to be productive and we're trying to persecute him. At least he's working for it right and not making it in overtime.
"I wish him the best. I hope Bahamians would ease up off the man and appreciate him for what he's bringing to the institution. He was there before. The [presidential search] committee chose him over anyone else. So now remunerate him according to his ability and get the job done."
Miller said considering that presidents of other universities in the United States take home nearly half a million dollars annually, Smith's request is reasonable.
"I have no problem with the man making whatever it is he is entitled to make based on salaries elsewhere," he said.
"It will shock Bahamians the [number] of people in this country who are making more than $400,000 a year and probably doing less than what this man is expected to do."
He added that there is nothing wrong with the government announcing Smith as its choice for COB president before locking down a contract.
"Normally you get the position first and then you negotiate the salary," he said.
"First of all, he has to be good enough for you to want him right? Once that happened, then you can discuss salary."
Smith left COB in 2005 amid a plagiarism scandal.
As COB searched for a new president, Smith applied and was shortlisted along with three other candidates months ago.
In August, Minister of Education Jerome Fitzgerald announced that Smith was selected for the position.
Free National Movement (FNM) Chairman Darron Cash has said the government should not reappoint Smith.

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News Article

March 20, 2013
Roberts reports 1M lost in copper theft

Businesses and government agencies are reporting major losses as a result of rampant copper theft.
Super Value, the country's largest supermarket chain, has lost approximately $1 million over the last five years, according to its owner Rupert Roberts.
"Copper theft is a serious problem in the country. Within the last five years, I have easily spent $1 million in equipment replacement and down time. These thieves at different times have disabled most of our stores, Wulff Road, Baillou Hill Road, Golden Gates, Mackey Street, Robinson Road. Copper theft even delayed the opening of our Quality Markets location in South Beach by at least a month or two," he explained.
During a press conference yesterday, Roberts stressed that copper thieves have been disrupting businesses, homes and government agencies like the Bahamas Electricity Corporation (BEC), Bahamas Telecommunications Company (BTC) and ZNS by ripping out equipment made of or containing copper.
He said copper theft over time has become a cost to both merchants and consumers, similar to payroll or rent.
While Roberts maintains he has never sent any staff member home as a result of copper theft, it is becoming increasingly difficult to absorb these losses.
"When thieves steal store equipment, it has the potential of closing the store for months, putting 40 to 50 employees out of work. Also, if the disruption is not caught in time, you can lose up to $250,000 worth of perishables for lack of refrigeration. When that happens, there is also the need to replace thousands of dollars of Freon, which they release into the environment when they cut or break the tubing," Roberts explained.
"We have never sent a member of staff home as a result of copper theft. We try to find other duties and not send people home in any circumstances no matter what happens to us. That never enters our mind to send them home. But if a store is completely disabled for three months, we would have to consider sending them home."
Leslie Miller, BEC's chairman, also confirmed that despite the corporation being outfitted with cameras, guard dogs and security officers, it continues to register major losses from cooper thieves.
"People cut wires from our plants on a weekly basis. They will take rolls of wire about six inches in diameter and just take as they please. You can't stop a thief; you can only slow them down," he said.
Miller, who also owns several businesses, including Mario's Bowling and Family Entertainment Palace, added that he has been a victim of copper theft on more than one occasion.
"This situation with copper theft has gone on for far too long. Just a few months ago, some partners and I decided we were going to open up the old Robin Hood location with a new name - Save Mart. We were getting the financing in place. One morning we arrived on site to get some people involved on the project and we found that every piece of copper was stolen. Air condition units were stolen as well. That replacement cost was in excess of $200,000 but they probably got less than $5,000 for the goods," he told reporters.
Other businesses like Bahamas Food Services (BFS) also reportedly lost thousands of dollars, when $85,000 worth of copper was stolen from a 20-foot container.
Miller and Roberts are calling on the government to implement a permanent ban on the exportation of copper.
"If we don't stop them from exporting copper, businesses are going to be closed down because it is affecting the ordinary lives of Bahamians that work in these enterprises," Miller said.

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News Article

March 28, 2013
Lyford Cay 'likely' to support coalition

The Lyford Cay Property Association is "likely" to become a member of the Coalition to Protect Clifton Bay (CPCB).
As exclusively revealed by Guardian Business in February, the association announced that the government appears "inclined" to grant Peter Nygard a lease of accreted land surrounding his property at Nygard Cay. It now seems that members of the community have taken their opposition to the next level.
"I think it is likely we will become a member. The environmental issues effect Clifton and our community,"said Philip Dunkley, head of Lyford Cay Property Association.
"We have looked at everything they have put together. It seems like something we should support."
Support for the coalition is also forming in other property circles.
Franon Wilson, president of the Bahamas Real Estate Association (BREA), said he did not wish to comment specifically on Nygard's case.
However, speaking in general terms, anyone that expands property beyond what was legitimately paid for should be kept in check by both the private and public sector.
"The bottom line is people should go out and inspect. If you go past a certain point and expand beyond your bounders, then that has implications," Wilson told Guardian Business. "There are things you can and can't do. And that is one of the things you can't do."
Back in February, a letter to members of the Lyford Cay Property Association stated that the government "may be inclined to accede to Mr Nygard's application" in the near future.
It went on to note that government indicated it would become more vigilant to prevent any future reclamation of lands.
The issue has been in and out of the courts in recent years.
According to a statement of claim filed in the Supreme Court on April 6, 2011, Tex Turnquest, then director of the Department of Lands and Surveys, informed Nygard that the government expected him to reinstate the coastline of the property to its condition at the time of the 1984 deed, when he first purchased the western tip of Lyford Cay.
Nygard's attorneys have argued, however, that additional land formed as a result of the gradual and imperceptible deposit of materials from the ocean onto land.
The fashion mogul sought a declaration that the lands have become part of the freehold property.
Recent statements by the Lyford Cay Property Association could indicate that the issue is swinging in Nygard's favor.
The coalition, however, appears ready for a fight.
"You can be sure the coalition will be active," Dunkley added.
Fred Smith, a top attorney with Callenders & Co, has joined forces with the coalition for legal support. The alliance could indicate that the coalition is prepared to fight any ruling on the property.
Dunkley pointed out that the Nygard issue is not the only problem for Clifton Bay. The Bahamas Electricity Corporation has long been criticized for poor environmental standards at one of its main power plants in the area.
From the air, a sheen of oil can reportedly be seen on most days along the coast and heading out to sea.
In a recent trip to The Bahamas, Robert F. Kennedy Jr. threw his support behind the coalition as it relates to the pollution coming out of Clifton Pier and its destruction to the reef system.

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News Article

March 26, 2013
BEC and the government's debt position

The Bahamas Electricity Corporation (BEC) is in crisis. It has a quarter of a billion dollars in debt the government has to back, it may lose $50 million this year and it is unable to provide enough power to keep the lights on in the high-demand summer season.loyment problems.

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News Article

March 25, 2013
Island-wide power outage

THE BAHAMAS Electricity Corporation experienced a power outage affecting the entire island of New Providence this afternoon, according to the untilty's public relations officer Arnette Ingraham.

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News Article

September 25, 2014
Cash: Christie should be the last to talk about the environment

Free National Movement (FNM) Chairman Darron Cash said yesterday that Prime Minister Perry Christie should be the last person to talk about climate change or the environment.
Cash was responding to Christie's recent climate change address before the United Nations (UN) in New York.
"We give him credit for that symbolic gesture; it was a step forward; the words sounded great on the world stage," Cash said in a statement.
"However, here at home, the prime minister's actions or in this case, inactions, speak louder than words."
Cash pointed to environmental concerns raised during the dredging related to Resorts World Bimini's Superfast ferry.
"On top of this, the sustained fires at the public dump and the related school closures and health problems point to a government asleep at the switch or intentionally turning a blind eye to environmental destruction," he said.
"These blemishes on the Christie record were noticeably absent from the UN speech."
During his speech, Christie called on the leaders of developed countries to honor their commitment to provide $100 billion yearly to combat climate change, adding that The Bahamas expects its "fair share".
Christie also called for the acceleration of the Green Climate Fund (GCF) so that funds can be disbursed by next year. The GCF is a mechanism that is used to transfer money from the developed world to the underdeveloped world.
Cash said Christie's ineffectiveness in ensuring order and focus in regards to the Bahamas Electricity Corporation's (BEC) long-term mission and structure, diminishes his credibility on energy reform and environmental matters.
Cash added that the government's "lackadaisical response to the recent spate of major oil leaks sends a clear message of lack of seriousness".
A significant amount of oil washed onto Adelaide Beach on September 11.
Transport and Aviation Minister Glenys Hanna-Martin has said the ministry suspects the oil may have been discharged from a tanker that was out to sea. She said a team from the Department of Environmental Health quickly responded to the spill to ascertain its impact on the environment.

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News Article

November 10, 2011
BEC STILL EYEING 5M 2011 PROFIT

By NATARIO McKENZIE

Tribune Business Reporter

nmckenzie@tribunemedia.net

THE BAHAMAS Electricity Corporation (BEC) should make around $5 million in net income for its just-closed 2011 financial year, its chairman yesterday saying the improvement on the less than-$1 million yield in 2010 showed it was headed towards recovery.

"I expect there to be a slight improvement in profitability over what we saw last year. I expect a profit to the order of $5 million," Michael Moss said.

"I don't have numbers yet to see if it's going to be in line with that expectation, but certainly I expect it to be more than $1 million. The road to recovery has started."

Mr Moss added: ...

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News Article

November 09, 2011
Roberts hits out at Moss and FNM over BEC

Chairman of the Progressive Liberal Party (PLP) Bradley Roberts said yesterday the claim that the PLP mismanaged the Bahamas Electricity Corporation (BEC) is nothing but propaganda.
Roberts said it is the Free National Movement (FNM) government that is mismanaging BEC.
On Monday, Chairman of BEC Michael Moss said in a statement that the PLP mismanaged the corporation during the years it was in office.  He provided a summary of a 2006 financial report which showed BEC's finances were troubled.
Moss said that he was responding to repeated claims by Roberts that the corporation's finances were sound under the Christie administration.
Roberts said Earl Deveaux and Phenton Neymour (the ministers with responsibility for BEC) "were both sound asleep at the wheel during the record oil price crisis" when oil was at $147 per barrel, and allowed the corporation to fully absorb customs duty and stamp tax on BEC oil imports which the corporation was unable to bear as a result of the sharp spike in oil."
He said this is the major reason BEC finds itself "with one foot on the banana peel and the other in the proverbial grave."
Roberts said, "After realizing the seriousness of their folly, the Free National Movement set out on a plan to lay the blame of the serious damage caused by their own failure to pass on the cost of the sharp increase in oil prices, with the shameless bogus claim that the reduction in rates in 2003 was the reason."
Roberts said that in 2003 both the FNM and PLP were on one accord regarding the rate reductions at BEC.
He said the FNM government engaged a number of consultants to justify blaming the 2003 rate reduction for BEC's financial woes.
"These reports and the associated cost were never tabled in the House of Assembly despite repeated requests by the Official Opposition," he said.
But Moss gave other reasons for BEC's troubles.
He said, "The ill-advised and ill-conceived rate reduction imposed on BEC under the watch of the PLP chairman set BEC squarely onto a progressively deteriorating financial spiral."
Moss said Monday that the rate increase introduced in 2010, that restored BEC's tariff to about the same position it was 18 years ago, has stopped the massive hemorrhaging at BEC.
But Roberts said, "The FNM's record of massive mismanagement of BEC has manifested itself with the constant blackouts during the past three summers resulting in damage to consumers' appliances and equipment.
"As a result of mismanagement, the FNM imposed higher electricity rates on the backs of struggling Bahamians."

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News Article

April 04, 2013
Police called to second day of BEC protests

POLICE were called to the Bahamas Electricity Corporation's headquarters yesterday morning after protesting union members barricaded themselves inside the Baillou Hill Road compound, blocking customers from entering.

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News Article

March 27, 2013
13.8M plaza rises in Abaco

A new $13.8 million shopping plaza just outside of Marsh Harbour has created around 75 construction jobs and promises to generate many more by its opening in November.
The Central Pines Shopping Centre & Business Complex, owned by the Teachers and Salaried Workers Co-operative Credit Union Limited, is now leasing out up to 20 spaces in the facility. The 50,000-square-foot plaza consists of five interconnected buildings, a stand-alone bank and an office complex.
Ashley Glinton, the president of Woslee Construction, said the Central Pines area is growing rapidly and should be a center of robust economic development in the coming years.
"Abaco is growing very fast and I think this will certainly help the community grow. We just finished the government complex right near by," he told Guardian Business. "We are up to around 75 workers and I can say they are nearly 100 percent from Abaco."
Glinton added that Woslee is placing the roof on the complex and it's on schedule for the November opening. It is the largest project for Woslee on the island.
Anthony Rolle, the building manager at Central Pines, told Guardian Business yesterday that the search is on for tenants.
The complex will include a supermarket, movie theater, pharmacy, dental office, doctor's office, shoe store, clothing stores, fast food restaurants, liquor store and outlets for paying bills from Bahamas Electricity Corporation, Water and Sewerage or Cable Bahamas.
"We have a list of names, and if they all come through then we will be fully rented. I will be looking at taking deposits to ensure their commitment going forward," according to Rolle.
The building manager agreed that the new plaza is well positioned to take advantage of community growth. In addition to the government complex, he said that a high school and primary schools are also "not too far away".
He said the township is only a two- or three-minute drive from Marsh Harbour proper.
While Rolle was reluctant to assign any specific employment figures to the development, space for at least twenty businesses, including a supermarket, could easily equate to well over 100 jobs.
"It really depends on the tenants and how many employees they would hire. We are seeking three major anchors - a food store, fast-food restaurant and hardware store," he explained.
Marsh Harbour has been the source of increasing investment in recent years. The new Leonard M. Thompson International Airport has been under construction for several years after the original contract was signed under the previous administration.
Since then, the Progressive Liberal Party (PLP) has expressed concern on the length of the runway and the quality of construction. The new international airport is reputedly due to have a grand opening, however, sometime this summer.
The government recently stated that Marsh Harbour is the third busiest travel hub in the country.
Guardian Business understands a new hospital is also under construction and should open in 2014.

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News Article

April 13, 2013
Energy savings for all Bahamians

The cost of electricity in The Bahamas is a significant economic burden. This government has promised to lower rates, but when and how?
The Bahamas Hotel and Tourism Association (BHTA), tired of waiting for government action, has taken a step forward to combat high energy costs by initiating energy audits.
While the organization should be praised for the initiative, other Bahamian businesses and homeowners cannot afford both the cost of an audit and its recommendations. The health of the overall Bahamian economy requires greater efficiency, not just in the tourism industry.
The government should lead by example and conduct a transparent energy audit and retrofit of its own buildings. Such an exercise has been promised during its tenure, but when? Perhaps, the government finds it difficult, like the Bahamian businessman, to afford the audit and recommendations under the burden of rising debt and electricity costs that hold it hostage.
Finding the money to spend to ultimately save is elusive to many Bahamian businesses.
An energy audit is a detailed inspection of a building's energy use over time to determine measures for greater efficiency resulting in cost savings. Energy efficiency is avoiding energy consumption in the first place. Efficiency is more than just turning off lights; it is a progressive reduction in energy needed to power basic appliances.
The Energy Star program started in 1992 is perhaps one of the most recognized labels for a product meeting efficiency thresholds. Products carrying the Energy Star label typically use 20 percent to 30 percent less energy. Consumer demand coupled with U.S. regulations has fostered innovative methods to make appliances more efficient year after year.
The government must expand duty exemptions for such products to encourage Bahamians to buy newer more efficient appliances at reasonable prices. Already, hybrid vehicle owners enjoy significant duty and gasoline savings over traditional all fuel vehicles. Most importantly, Bahamians must be able to afford the upfront costs to benefit from future cost savings.
The previous government offered a CFL lightbulb and solar hot water heater giveaway to qualified applicants. Such initiatives are important educational tools and should continue to be encouraged.
Our high cost for electricity is the primary driver for investing in some form of energy efficiency be it an energy audit or Energy Star product. But The Bahamas should also welcome greater efficiency to ease the burden of supplying power to an expanding population.
BEC is a corporation. It makes money by supplying power, and reducing demand will result in lost revenue. But if we can stabilize energy production and operation of our existing infrastructure, service interruptions will likely decrease.
The government has indicated it is performing an energy assessment to determine the right mix of energy production methods. With over 40 alternative energy proposals, the government is right to turn to expert advice. But with OPEC not likely to lower the cost of oil any time soon, Bahamians would welcome some respite from high electricity prices sooner than later.
In the meantime, businesses and homeowners welcome winter's cooler temperatures and a break from running high-cost air conditioners.

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News Article

March 31, 2011
BEC 'will be privatised'

By NEIL HARTNELL

Tribune Business Editor

The Bahamas Electricity Corporation (BEC) "will in the medium to long run be privatised", joining its Bahamas Telecommunications Company (BTC) counterpart, a consultant's report recommending that competition be introduced into the Bahamian power sector through Independent Power Producers (IPPs) supplying a mix of renewable and conventional energies.

A report on strengthening the Bahamian energy sector, produced by German consultants Fichtner, suggested that competition be created by separating electricity production from its transmission and distribution to end-consumers, given that the latter was likely to be a 'natural monopoly' ...

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News Article

October 21, 2014
Neymour claims govt wasting money on Clifton oil leak investigation

Former Minister of State for the Environment Phenton Neymour yesterday suggested that the government is wasting money on the international consultants who were brought in to determine the parties responsible for the latest oil spill in waters in Southwestern New Providence.
Neymour insisted that the Bahamas Electricity Corporation (BEC) is the source of the leak. He said the government should use its money to address oil leak sites at BEC's Clifton Pier Plant.
However, BEC Executive Chairman Leslie Miller said while BEC is partly to blame, it is not the only entity that is culpable.
"The oil is not only BEC's," Miller said.
"When the analysis was done, it proved that you also had jet fuel oil."
There has been increased concern about the contamination at Clifton after several reported oil spills in the past several months.
Two weeks ago, the government engaged consultants from Coastal Systems International Inc., which is a U.S. environmental firm, to determine the source of the recent oil spill and to recommend remedial clean up.
When The Guardian visited Clifton last week, oil was spilling over BEC's waste oil tanks and into trenches that lead into the sea.
Neymour accused Miller of covering up the cause of the oil spills at Clifton Pier.
"You can see the level of contamination that exists at BEC and their failure to even attempt to clean it up or even conceal it," he said pointed to trenches that were saturated with oil.
"This is oil that the Bahamian people are paying on their fuel surcharge every month, that they are pouring into the ground. This is clearly a dereliction of duty of both the minister of environment and the chairman."
He said he suspects that millions of gallons of oil have been lost and suggested that authorities are not doing anything to stop it.
"They should immediately take action and admit to the Bahamian people what is going on," Neymour said.
However, Miller said the government is preparing to clean up the Clifton area. He said the consultants from Coastal Systems International Inc. are preparing an initial report, which would detail the action that needs to be taken to prevent future spills and to clean up the area.
Miller denied that he or anyone from the government is covering up oil spills.
He also pointed out that oil spills were also reported when Neymour was minister under the previous administration.
Neymour said when he was minister he directed BEC to establish an oil spill response unit and put in place other appropriate prevention measures.
Earlier this month, Dorsett revealed that BEC's containment booms at the Clifton Pier Plant have not been as effective as they should be.
"The BEC containment booms were not preventing all of the fuel emitted into the marine environment from spreading," he said. "It also appeared that fuel was being discharged from one of the outfalls."
Miller added that BEC recently ordered new containment booms to replace the ones that have been ineffective.
Dorsett suggested that once investigations are complete, "... No one is going to be off the hook when it comes to doing what is right, whether it is BEC or private stakeholders."

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News Article

March 23, 2013
BEC to provide free electricity for CARIFTA

After reporting that the Bahamas Electricity Corporation (BEC) lost nearly $13 million in the first quarter of this fiscal year, BEC Chairman Leslie Miller said yesterday the corporation will provide electricity, free of charge, to the upcoming CARIFTA games at the new Thomas A. Robinson stadium.
"The electricity cost for the three-day event is expected to be in the neighborhood of $60,000," he said at a press conference at BEC headquarters.
"BEC has agreed to absorb the entire cost of electricity consumed at the stadium during this time.
"The Bahamas Electricity Corporation realizes the tremendous burden that electricity costs have on not only residents and businesses, but to other nonprofit organizations, including those in the sporting community."
Miller said the cost of electricity should "never be a hindrance to the success of any event that is meant for the Bahamian people".
When asked how this gift will affect BEC, Miller said, "BEC is a multimillion-dollar entity with assets totaling almost $1 billion; $60,000 is not a whole lot of money with regard to BEC.
"Remember now, we are providing electricity and this electricity would be provided at our cost so obviously our direct cost would be cheaper than what would normally be charged to say a commercial entity.
"The Bahamian people are providing this gift because BEC is owned by the people of The Bahamas so this is their gift to CARIFTA.
"It's not our gift; it's their gift. The Bahamian people own the corporation."
During a recent contribution in the House of Assembly, Miller said BEC could lose in excess of $40 million to $50 million this year.
He said the corporation must tighten its belt so that it, along with other corporations, could sustain themselves without having to go to the government.
The CARIFTA games are scheduled to start March 29.

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News Article

October 06, 2014
Structuring a legacy debt model for BEC

The reliability and cost of electricity generation in The Bahamas is vital to the local economy and, in our view, a matter of national importance. It is for that reason that we feel compelled, from time to time, to express a point of view on any policy changes which might adversely affect the economy, no matter how well-intended those changes may be.
The proposed energy reform process, specifically, the legacy debt that surrounds Bahamas Electricity Corporation (BEC), has been a topic of much discussion lately. It is our considered opinion that there are at least two important points that are in need of further in-depth and objective analysis before proceeding any further. The first is the reported suggestion by the prime minister of deferring a decision on BEC until late December 2014 in order to give more time to address the legacy debt issue. The second and closely related issue is the recommendations by Simon Townsend, spokesman for the financial advisors, KPMG, for tackling the legacy debt. Townsend and KPMG are apparently in favor of having BEC issue a rate reduction bond which, in their view, should receive a positive reception in the capital markets, including any banking institutions that would be interested in investing in the bond.
In that regard, we are strongly of the opinion that it would be a grave mistake to take the approach of dealing with the legacy debt of BEC before dealing with the fundamental issue of power generation. In other words, it is a heroic and unrealistic assumption to believe that over $450 million of BEC's debt can be repackaged at better rates in today's market, given some of BEC's current challenges, such as:
o The electricity rates that are regarded as too high by households and businesses resulting in non-payment of electricity bills and an extraordinarily large accounts receivable at the corporation.
o BEC's technical and financial performance over the past several years has brought the company close to the point of bankruptcy and the type of strong revenue performance necessary to pay the legacy debt is not currently possible in BEC's present state.
o Potential lenders in the capital markets would most certainly take into account the less-than-stellar performances on the technical and financial sides and accordingly be wary of the risks associated with new debt offerings by BEC, especially when coupled with no new proven savings to the customers.
Matters to consider on the legacy debt issue
1. Under the new proposal, BEC/government would be attempting to raise the cost of power by 2.5 to four cents per KWH to pay for the legacy debt even before developing and implementing a plan to deal with power generation. It is unlikely that people who aren't paying their bills now would begin to pay at higher prices and also having to factor in the VAT when that becomes operational.
2. The legacy debt is likely to be set up in a non-standard revenue bond, which means it will be paid on a priority basis with no provisions for deferred payments. Those payments to the bond investors are pulled from the general revenue account even before BEC gets paid. When you factor in declining revenues due to fewer people paying and then to deduct this debt payment, it means that there is even less money available for subsidizing BEC. Any attempt by the government to increase the subsidy would adversely affect its fiscal position and place it at odds with the international financial agencies.
3. Despite the suggestion by KPMG, the financial advisors, that there is an appetite for BEC's proposed bond issue, it is more likely that the investors buying the debt in the capital markets are going to look at the issues outlined above and against the background of BEC's historically poor performances. Investors will either not buy the bonds or demand higher rates of interest. The capital markets are efficient; investors will demand a premium (via higher interest rates) for the risk of investing in a BEC bond.
In our experience, it is not unusual for some loan arrangers or financial advisors to be less than frank with a potential client in order to secure the services contract. Quite often, there are promises of very attractive terms and interest rates and then, at the last minute, the arranger informs the client that the market is not reacting the way they thought it would and the interest rate needs to go up and the term needs to be shortened. At that point the client, which would be BEC and the government, would have too much time, money and political capital invested to back out.
The recommended way forward to structure a legacy debt model
1. Firstly, there must be a demonstration that the corporation will make the necessary changes to effect efficient management and to ensure that its financial and operational performance going forward would be both successful and reliable.
2. Secondly, after improving operations, demonstrate concretely that costs will come down sufficiently to ensure a significant discount to the ratepayer, even after the cost of the legacy debt is added to the bill.
3. Thirdly, demonstrate that any technical improvements, including the acquisition of new equipment, will be configured in such a way that will ensure the long-term, continued success of BEC's operation and commitment to energy reform.
In summary, the proposal to deal with the legacy debt before fundamental restructuring at both the managerial and technical levels at BEC is a high-risk proposition that is likely to fail. Although some reference to the success of the Nassau Airport Development (NAD) model was alluded to, we offer a word of caution. The BEC proposal is much different from the NAD model in the way new revenue streams are applied. Under the NAD model the passenger facility charge is used primarily for debt repayment. Passengers must pay the bill in advance when they buy their tickets and the ticket price is competitive with regional airports. Rate charges at BEC are already beyond that charged by regional counterparts. A successful restructuring at BEC must include lower charges to consumers, improved efficiency and a clear path to profitability.
o CFAL is a leading independent investment and advisory firm based in The Bahamas with a long and proven record of stability and integrity across all economic climates. Its experienced team of advisors provides sound, informed and innovative financial planning solutions for institutions and individuals, including a full range of financial services that include investment management, pension management and administration, brokerage services and corporate advisory services.

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News Article

April 04, 2013
Workers may be jailed if rules broken

UNION chiefs at the Bahamas Electricity Corporation could face fines of up to $10,000 or be jailed for two years if they breach labour rules on industrial action, the Government threatened last night.

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News Article

February 01, 2014
DPM: BEC deal to be finalized this month

Deputy Prime Minister Philip Brave Davis said yesterday the government expects to finalize the Bahamas Electricity Corporation (BEC) restructuring exercise by mid-February.
The deal was previously expected to wrap up at the end of January.
However, Davis, whose portfolio includes BEC, said he is satisfied with the progress made to date.
The bidding process, which will lead to the overhaul of the energy sector, is being managed by KPMG (Bahamas).
Davis said the five companies that remain in the running to become part of the overhaul made their final submissions to support their bids and pricing proposals yesterday.
"Once we would have had a look at the issues that were raised with them on their pricing tenders they will be evaluated during the course of next week," Davis told The Nassau Guardian.
"And the following week we intend to sit down face-to-face with each one of them and hopefully that will take three or four days."
Following those meetings, the prospective companies will be reviewed in Cabinet before a decision is made, Davis said.
KPMG announced in October that six bidders had advanced to the next stage of the BEC request for proposal, having been asked to submit pricing proposals.
While there has been no official disclosure, The Guardian understands the bidders at that stage included Malaysia-based Genting Group; state-owned China State Construction and Engineering Corporation; Cayman-based Inter Energy, U.S.-based PowerSecure, and Caribbean Power Partners.
BEC will be split into a transmission, distribution and customer billing entity and a semi-privatized power generation company.
The move is hoped to improve efficiency and reduce the cost of electricity.
While no Bahamian bidders are involved in the process, Davis said the shortlisted companies are interested in including Bahamians in an "equity and ownership" arrangement.

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News Article

June 30, 2014
Silent treatment

There is a kind of madness taking grip in this country on certain matters relative to governance, the functioning of our institutions and the things we as Bahamians are asked to accept.
Nowhere has this been more on display in recent weeks than in the developments that flowed after The Nassau Guardian disclosed that Executive Chairman of the Bahamas Electricity Corporation (BEC) Leslie Miller and his family-owned business owed the corporation $250,000.
Miller, of course, is not the only person who owes the corporation. There are also many businesses that owe substantial sums, we are told.
We revisit this matter this week because it is no doubt Miller's hope and that of the government that it will go away.
But it remains a matter deserving of attention.
Prime Minister Perry Christie and Deputy Prime Minister Philip Brave Davis, who has ministerial responsibility for BEC, continue to remain silent after confirmation from BEC that its policy was violated when cashiers accepted a cash payment of more than $10,000 on the bill.
BEC's policy is that no cash payments are to be accepted over that amount.
Sources within the corporation confirmed that $100,000 was paid in cash.
This has not been denied by Miller or any government official.
Asked to confirm whether the payment was made in cash, the deputy prime minister told us, "I don't know how it was paid. I just know $100,000 was paid."
When we raised this matter again with Miller last week Sunday, he was annoyed that we were still pushing the point.
In a stunning statement to The Tribune, Miller said, "money is money".
The newspaper said Miller informed that he was also unaware of BEC's policy not to accept more than $10,000 cash because many "businesses have done it before".
"Money is money," he reportedly told The Tribune. "I didn't know what the policy was. If they came to my business and gave me money, paid me in cash, I would thank them again and again.
"Institutions in this country have done this before. These are petty things (that are) causing the Bahamian people to be sidetracked from what is really happening at the corporation and all the good that is being done.
"The people that are attacking me and my family are nameless, but I have a name and they are coming for me. I do not need them to like me, my record speaks for itself."
What Miller does not understand is questions relating to that $100,000 are legitimate questions.
This does not represent an attack on him or his family.
The implications of this matter being swept under the rug may be great.
It is not accepted business practice to deal in large sums of money, hence the BEC policy.
The chairman's statement that he did not know what the policy is, is startling.
The prime minister and the deputy prime minister should not accept this as an explanation.
And we the people should not accept the deputy prime minister's statement that he does not know how the money was paid.
It is the chairman's obligation to know the corporation's policies, and it is the DPM's obligation to look into the matter of this payment.
If we say we are serious about protecting the reputation of our jurisdiction, then we must at all times adhere to the highest international standards as they relate to financial transactions.
The world is watching. What signal is the government sending to the international community?
To be clear, we make no suggestions on the source of the $100,000 paid to BEC.
But we do question our disregard for standards relating to the handling of large sums of money.
This is not a petty matter.
We expected Leslie Miller to react in the manner in which he acted.
Miller is a well-liked politician who has endeared himself to the common man.
But he has attracted controversy during his years in public life and has created one embarrassing situation after the next for Christie.
At the start of the first Christie administration, Miller, who was then a minister, fueled a firestorm over firings at the Bahamas Agricultural and Industrial Corporation (BAIC).
He was later caught up in multiple other controversies.
We are reminded of a statement an American diplomat attributed to Prime Minister Christie in 2005.
"Some ministers, were brought into the Cabinet because of their qualifications; others, like Minister Miller, were included in an effort, at times unsuccessful, to keep an eye on what they're doing," Christie allegedly said.
We wonder now whether Christie, by his silence, is seeking to avoid a fall-out with Miller over that $100,000 cash payment, and the fact that the chairman owed the corporation so much money while demanding other businesses stay current.
We raise this issue again this week to say again that our general lack of adherence to standards and the prime minister and deputy prime minister's silence are appalling.

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News Article

November 28, 2011
BEC 'SMELLS LIKE A ROSE'

By NEIL HARTNELL

Tribune Business Editor

THE Bahamas Electricity Corporation (BEC) has been left "smelling like a rose" by its Grand Bahama counterpart, which produced data showing the former's electricity tariffs are "very, very competitive" when measured against the Caribbean.

While its own regional comparisons show Grand Bahama Power Company is in the middle of the pack, ranking sixth most expensive out of a 12-strong utility sample for customers using 600 kilowatt hours (kWh) during September 2011, BEC is ranked number three, behind only Aruba and Barbados.

Grand Bahama Power Company's total charge for those consumers was $227.58, compared to $206.2 for BEC, l ...

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News Article

April 04, 2013
Jail threat to BEC staff

UNION chiefs at the Bahamas Electricity Corporation could face fines of up to $10,000 or be jailed for two years if they breach labour rules on industrial action, the Government threatened last night.

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News Article

November 10, 2014
Shaping a legacy

With the Christie administration at the halfway point of this term in office, Prime Minister Perry Christie is facing a tight timeline in shaping his legacy and achieving big things in this term.
For him, 2015 will likely be a defining year. By the end of next year, Christie will need to say whether he intends to retire after this term or whether he plans to lead the Progressive Liberal Party (PLP) into an election for a fourth consecutive time.
For this government, the challenges, as we know, are many. A lot is riding on the effects of the value-added tax (VAT) rollout come January 1. The new tax will increase the cost of living on a population already stressed and stretched.
But the government, faced with mounting debt, has said it has no other choice, as not implementing the tax would have an even more detrimental impact in the medium term.
Last week, the ratings agency Standard & Poor's (S&P) maintained the country's credit ratings in its latest research update, but warned that, should the government's implementation of VAT not yield the projected results, future downgrades could be expected.
VAT will push the cost of living higher. For those already finding it difficult to pay their bills, the challenges will be greater.
While Baha Mar promises a significant economic boost after its scheduled opening next spring, the company's decision to lay off near 200 of its workers from the Crystal Palace hotel on Friday was the kind of news the government did not need at this time.
The company expects to add several thousand permanent jobs, however.
If the Christie administration can cause a significant dent in unemployment, it could be on its way to another term in office.
But, of course, there are no guarantees.
When the PLP lost the election in 2007, unemployment was 7.9 percent.
The latest numbers, released in July 2014 for a survey conducted in May, showed that more Bahamians were unemployed in 2014 than in May 2012 when the PLP returned to office.
But the rate of joblessness in The Bahamas declined from 15.4 percent recorded last November, to 14.3 percent in May 2014.
In the face of ongoing economic challenges, the prime minister has remained optimistic.
But many people do not now share the prime minister's optimism for better times in the near future.
Disillusionment
As we have reported multiple times, Christie has been fighting against a rising tide of disillusionment among many of his party's supporters and the wider Bahamian population.
There is the sense that things are not happening quickly enough. Many people are not feeling better about what is to come.
If people are not as patient as the government would wish, it should not be surprising to anyone.
Ahead of the 2012 general election, Christie declared that he was "spreading the PLP message and vision for hope and change to all our brothers and sisters".
So far, he has failed to deliver on many of his party's bloated promises and his vision for hope has also failed to materialize.
The government's much-touted mortgage relief program was a stillbirth; its National Health Insurance Plan "within the first year" (as articulated by the now Minister of Health Dr. Perry Gomez) was also dead on arrival, as were other promises.
We have yet to see the jobs boom that the PLP made so many voters believe would happen in the near term, and we have yet to feel any safer under the Christie administration.
In the final rally before the 2012 election, Christie said he had been all over the country talking to voters and "they are angry and afraid about [then Prime Minister Hubert] Ingraham's failure to lead on crime; they are angry about the 500 murders."
Today, there is still anger about crime and about Christie and the PLP's failure to deliver.
Last week, the murder count hit 100.
An emotive issue that was used by the PLP to woo voters, crime still remains the most serious of national concerns.
The greatly heralded Urban Renewal 2.0 has been short on results thus far.
As the government struggles with the crime problem, it has placed renewed focus on tackling illegal immigration.
While it faced criticisms on its recent crackdown in this regard, the government gave many Bahamians a sense that on an issue of critical national importance, it was getting it right.
For too long, we have not had the sense that any administration was serious about addressing this problem. We at least feel some sense of that.
But the future will determine whether there is consistency in carrying out the immigration laws.
Despite anger from the Haitian community over the enforcement exercises, we must not lose focus on addressing illegal immigration in a comprehensive and sustained way.
This, of course, means that the focus ought not just be on undocumented Haitian immigrants, but all undocumented foreigners in The Bahamas.
Energy reform
Ahead of the 2012 election and while in office, Christie has expressed big ideas.
He has, for example, promised to break the Bahamas Electricity Corporation into two -- an entity responsible for power generation and another to deal with customer service.
Christie has noted that the high cost of energy is one of the biggest threats to businesses in The Bahamas.
Consumers are also burdened, and are eager for the government to deliver on its promise to lower the cost of electricity in the country. The Bahamas Electricity Corporation's fuel charge has substantially driven up electricity bills.
If Christie can effect energy reform and significantly reduce BEC bills, this would be a major and unforgettable achievement.
Indeed, energy reform is among the key issues that could lead to another PLP term in office.

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News Article

April 03, 2011
5bn energy savings goal

By NEIL HARTNELL

Tribune Business Editor

THE Bahamas could save a collective $5 billion by implementing energy efficiency and renewable supply sources within the Bahamas Electricity Corporation's (BEC) service area, a government policy paper has projected, with alternative energies targeted to produce 30 per cent of all power by 2030.

The National Energy Policy Committee's second report, completed in September 2010, concluded that by pursuing a combination of energy efficiency measures and increased use of renewable power sources, reducing the Bahamas' almost 100 per cent dependency on fossil fuels, "a sustainable energy matrix can be achieved by 2030".

This matrix, the ...

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News Article

October 15, 2010
BEC MIDDLE MANAGERS GO BACK TO WORK

By MEGAN REYNOLDS

Tribune Staff Reporter

mreynolds@tribunemedia.net

MIDDLE managers at Bahamas Electricity Corporation returned to work yesterday as negotiations over a new industrial agreement got under way.

The Bahamas Electrical Utility Managerial Union (BEUMU) at BEC's Baillou Hill Road office, reportedly walked off the job on Thursday, prompting a statement from BEC management.

But BEC general manager Kevin Basden denied there had been any industrial action, claiming union members had only left their desks for a lunchtime meeting.

"There was no industrial action," Mr Basden said.

"We are willing to negotiate with all of our employees and maintain an amicable rel ...

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News Article

November 25, 2014
BEC should not give extravagant contract to its workers

We just went through the worst summer in recent memory in New Providence when it comes to power outages. Many homeowners and businesses lost equipment due to the situation. Many were enraged because family life and commerce were constantly being disrupted. The problem was equipment failure, for various reasons.
This poor service also costs a lot. Customers of the Bahamas Electricity Corporation (BEC) pay for usage and a fuel surcharge. The surcharge is usually three times the usage cost.
Despite the high rates for electricity, BEC is a failed corporation. It has $450 million in legacy debt. The government has to stand behind its loans. BEC's Executive Chairman Leslie Miller has said the corporation stands to lose $30 million this year.
In this context, the Bahamas Electrical Workers Union (BEWU), the representative of BEC's line staff, is in a battle with the corporation and the government over a new contract.
The full scope of the proposed contract is unknown, but Miller recently told The Nassau Guardian that he called a special board meeting to examine it and expressed several concerns. Those concerns included union demands regarding lump-sum payments and rostering, according to Miller.
BEWU President Paul Maynard has said there could be industrial action today over the impasse between the union and BEC. The electricity started going off yesterday.
At times, Miller has been intemperate with his words regarding BEC's workers. He was correct, however, when he said BEC cannot give employees what it does not have when it comes to these negotiations. He has asked the union to be "a little more reasonable, consider the plight of all Bahamians, and stop being so selfish".
The government and BEC should not offer the workers an extravagant deal. In fact, with BEC being a failed state entity that is losing money there is a need for the new deal to cut back on what was given before. No worker should expect more money and benefits when the entity paying the salaries is bankrupt.
The government has pledged to restructure BEC and allow increased private participation in the energy sector. The final decision on sector reform, however, has not been announced. Change is urgently needed, as BEC and its high rates and poor service are inhibiting economic growth.
The union should accept that the corporation is in a poor financial state. It should be reasonable and not seek more than BEC can bear - and it can bear no more when it comes to salaries. The government and BEC should also hold the line and work toward reducing costs at the corporation in order to bring some relief to BEC's financial situation.

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News Article

April 20, 2013
BEC and the government's debt position

The Bahamas Electricity Corporation (BEC) is in crisis. It has a quarter of a billion dollars in debt the government has to back, it may lose $50 million this year and it is unable to provide enough power to keep the lights on in the high-demand summer season.
Successive political administrations have made all kinds of decisions over the last decade that have brought BEC to its knees. The dysfunctional state of the corporation is now increasingly having harmful effects on The Bahamas.
The high cost of power produced by BEC serves as a large across-the-board tax on Bahamians, increasing the cost of goods and services. The summer blackouts inconvenience businesses and homeowners. And now BEC's debt burden could hurt the country's credit rating.
Moody's is warning the government that rising debt held by public sector corporations such as BEC could hurt the country's rating going forward. According to its latest credit opinion, The Bahamas retains its negative outlook due to the difficulty in achieving fiscal consolidation necessary to stabilize debt and increase revenue in the short term. A failure to reverse the recent trend of rising debt will place downward pressure on the country's future rating, the report added, particularly with the "crystallization" of liabilities held by BEC.
The Bahamas' bond rating was downgraded to Baa1 from A3 last December.
The government says it has 60 energy proposals before it and it is in the process of reviewing those proposals. One of those proposals is from SGI Global Holdings Ltd. It is represented by attorney John Bostwick and thinks a power barge concept makes far more sense than any of the other energy proposals before the government.
Executives from the firm have drafted a proposal arguing it could slash the average cost of electricity from $0.40 per kilowatt-hour to $0.28 per kilowatt-hour (kWh) in the first year if allowed to enter the marketplace. In year seven, the international firm says it could reduce the cost of electricity to $0.25 per kWh.
At some point, the government has to make a decision on the "major change" it will create in the local energy sector. The status quo is a barrier to economic growth, an annoyance to the public and it harms the Bahamian credit position.
If private firms are able to enter the market and assist the government by providing energy at lower rates than BEC, why not quickly move to allow private firms to assist?
We are at the end of the first year of this Progressive Liberal Party (PLP) term. It went by quickly. Despite all the talk thus far about BEC and energy, under the PLP BEC continues to spiral. A paradigm shift is needed in the Bahamian energy sector.
If the PLP waits too long to decide on this change The Bahamas will be further harmed, more money will be wasted and the change desired may not take effect until after the next general election, as energy plants take time to set up.
We hope the Cabinet understands that success in bringing down the cost of power is as much a priority now as our crime and unemployment problems.

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News Article

April 03, 2013
BEC statement on actions of Bahamas Electrical Workers Union

Nassau, Bahamas - In
response to the withdrawal of labor of the members of The Bahamas
Electrical Workers Union (BEWU), The Bahamas Electricity Corporation
advises its customers in New Providence and the Family Islands that it
has contingency measures in place to ensure that any action on the part
of the union does not severely impact the Corporation's operations.

BEC
further informs the public that the action of the junior employees of
the Corporation is illegal and; therefore, in breach of the industrial
relations agreement and is in direct contravention of the labor laws of
The Bahamas.The Corporation encourages the BEWU that, as with any
employee related matter, to employ all

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News Article

April 05, 2013
PM 'will not allow union to hold gun to his head'

PRIME Minister Perry Christie said yesterday he will not allow Bahamas Electrical Workers Union executives to "hold a gun to his head" and force him to make swift decisions that may not be in the best interest of the Bahamas.?Mr Christie was responding to members of the BEWU who, for the past three days, have been demanding the immediate firing of Bahamas Electricity Corporation Executive Chairman Leslie Miller and the end of the rostering system at the corporation.

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News Article

June 07, 2013
BEC discounts for those who pay off arrears

A staggering 90 per cent of BEC residential customers are in arrears worth a total of some $26 million, according to Bahamas Electricity Corporation chairman Leslie Miller.

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News Article

October 14, 2010
BEC STAFF WALK OFF JOB

INDUSTRIAL unrest spread across the capital yesterday, with unionised BEC workers walking off their job.

Members of the Management Union of the Bahamas Electricity Corporation reportedly staged industrial action at their headquarters on Blue Hill Road.

BEC Chairman Michael Moss said: "I have heard that there may have been a demonstration at the compound however, I have not been able to confirm that as yet as I've been tied up at ZNS."

Union officials also could not confirm details of the strike.

Late last night, BEC released a statement which read: "The corporation has held recent discussions with the union's executive team. During the last meeting, additional information ...

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News Article

March 31, 2011
BEC managers demonstrate

Almost 25 middle managers of the Bahamas Electricity Corporation staged a lunchtime protest in front of BEC’s Tucker Road head office yesterday, as tensions continued to mount over a number of job related issues.
President of the Bahamas Electrical Utility Managerial Union (BEUMU) Ervin Dean said if their demands are not met by executive management they would have to escalate their actions.
Dean said while they would not resort to sabotage, executive management will start to see some “things happening” unless BEC agrees to adhere to the union’s industrial agreement, properly compensate the workers and rescind changes that were made to their pension plan.
The uni ...

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