Mr. Speaker
As I rise again to honour the constituents of Cat Island, Rum Cay, and San Salvador, I declare my absolute support of the Budget communicated by our Prime Minister, the Rt. Honourable Member for Centreville on 25th May 2016. I am satisfied that it is faithful to this Government’s reform plan and its agenda for a modern Bahamas in fulfilment of our Charter for Governance.
I thank the Prime Minister and the Minister of State in the Ministry of Finance, who is the Member for Golden Isles, for their work, which over time, has secured a consistent reduction in the Government’s GFS Deficit. Under their guidance, this Government has delivered on the fiscal consolidation plan that has yielded concrete improvements in the public finances of our nation.
Mr. Speaker
This Government has been driven over the past four years by the fundamental pursuit of change that will eventuate in better possibilities for the coming generations. We know that our people demand and deserve a better future for themselves and their children. It is therefore, our responsibility to ensure that all of our efforts here move us toward a decidedly better future.
As our leader pointed out in his Communication last Wednesday, ours is an agenda for a modern Bahamas – modern in terms of governance and economy, and in terms of social programmes and public infrastructure.
The Constitutional Referendum
Mr. Speaker
We live in a democracy…a very healthy one at that. This was demonstrated last week when our constituents took on their extraordinary roles as legislators in the Constitutional Referendum. Many still do not understand the power of that role, which is usually left to those who occupy this Place of Privilege. The volume and tenor of the referendum’s result, I believe, projected the electorate’s cynicism toward all politicians.
Mr. Speaker
The amendment proposals were essentially good ones. The result, though we accept it, was not an easy swallow.
I take the view that it was a message to everyone here – on both sides of the divide. With the apparent support of the Opposition, we fulfilled a commitment to bring the referendum. Our commitment, however, could not foreshadow the outcome. But, that is another matter.
I thank the people of The Bahamas, particularly those of my constituency, for yet again demonstrating to the world that we are a peaceful people. Indeed, we have an incredible electorate.
Mr. Speaker
Our constituents deserve our thanks. There are very few countries around the world that undergo contentious and complex election processes without incidents of violence. We have a lot for which to be grateful. So, in gratitude, I encourage all of us to revise our steps to ensure that we continue forward, upward, onward, together to a modern Bahamas.
Fulfilling the Commitments of Our Charter
Mr. Speaker
It is often said that the only constant in life is change. Change is the essence of development. We must, therefore, embrace change as an essential. Our comprehensive change agenda, which is documented in our Charter for Governance has guided our efforts since coming to office.
Our Charter is the yardstick against which this Government should be measured. The truth is, our world may change, but the importance of integrity does not. Integrity is preserved only by the efforts taken to ensure that your commitments are met.
When the Progressive Liberal Party drafted the Charter, we did not take lightly the commitments we made to The Bahamian people. That is why, at every instance, I have endeavoured to ensure that my Ministry keeps its tenets in view.
As I have done at my contribution to each of these annual exercises, I again renew my Ministry’s commitment to do all that we can to assist Government to keep on track to eliminate the primary deficit and foster the ideal of value for money as an adjunct to fiscal prudence.
We are intent, as far as is possible, to secure private sector involvement in building roads, bridges, airports and other structures – the physical underpinnings of a modern Bahamas that will lead to better quality services, lower cost services and enhanced value for Bahamians.
Staff Appreciation
Mr. Speaker
My Ministry’s efforts toward the change agenda for a modern Bahamas is well-documented in our nation’s history. We see capital and maintenance investment in all of our islands. The works that my Ministry supervises has been taken for granted over the years and are significantly under-appreciated.
Many of my Ministry’s staff do all that they can to ensure that the Public Service is a stimulating, proud and lively organism. As professionals, they could be doing so much more to enrich themselves as private practitioners. They choose to sacrifice of themselves for nation building. That is laudable in today’s world.
Today, I thank them and salute the administrators, engineers, architects, quantity surveyors, inspectors, other professionals, and their assistants, who plan and supervise the built infrastructure of our Bahamas.
I encourage those who go far beyond the call of duty on a daily basis to never stop giving the best of themselves just because others do not give them credit. In the end, we are all a better people because of what they do.
Builders’ Services
Mr. Speaker
The Budget Communication announced significant tax reductions or exemptions on quite a number of products. These incentives are very important in an economy that indicates a contraction of the construction industry.
Statistical reports from my Ministry’s Building Control Division for the first three quarters of the 2015/2016 fiscal year indicate a decrease in building applications approvals, reflecting a 24% decrease or $101.3M decrease in construction value. Notwithstanding, building permit fees for that same period totalled $864,207.03, an increase of 8.4% over the same period of the previous year.
Mr. Speaker
Studies have demonstrated that tax relief is an extremely important economic stimulus. In fact, the University of California study of this model[1] found that a dollar of tax cuts raises gross domestic product (GDP) by about $3, more than twice the effect of a dollar increase in government spending.
This is even more significant in an economy that so heavily depends on importation of consumer items.
It is very good news, therefore, that customs duties are significantly reduced for supplies required for building construction and improvements. These include:
· Alarms systems and alarm systems parts;
· Marble, travertine, granite and other stones;
· Parquet flooring;
· Crown moulding;
· Shower heads, sinks, basins;
· Joint compound, rebar, bar joists;
· Roofing tiles;
· Toilets, tubs, and plastic flooring.
While tax reductions are good, duty free is infinitely better! Contractors and consumers alike welcome the announcement of the elimination of the customs duty on items like:
· Plywood;
· Cement and lime;
· Sheetrock;
· Doors;
· Hardiplank, nails, roofing rails; and
· Asphalt shingles.
Mr. Speaker
Lowering the tax burden on businesses, particularly small business, and self-employed entrepreneurs is especially important because small businesses account for most of private-sector employment and create much of the new jobs for our young men, in particular, when it comes to construction.
Mr. Speaker
The approval process for construction is cumbersome, labour-intensive, and needlessly expensive to the customer.
Currently, a customer has to submit several copies of a plan – each to go to various agencies of Government for consideration, wasting time for circulation and money for printing.
To address these challenges it is intended to introduce an electronic plan-processing solution that will have the capability to greatly impact the efficiency and security of the processing of building permit applications.
The software tool will have tremendous impact on improving the efficiency and access to individual file data to both the administration and the public. This, I am sure, is welcome news to all who require the services of the Building Control Division.
Mr. Speaker
While I have engaged the subject of construction, I am very pleased to advise that the Construction Contractors Bill, 2016 has been finalised. This Bill has had a long road to legislation.
Just last week, though, we secured a final amendment, which was advanced by the Bahamas Contractors Association. My Ministry is assured of their support for the Bill and have advanced it for the approval of Cabinet to lay on the table of this House for debate.
My Ministry has also advanced to Cabinet, its draft of the Planning and Subdivisions Bill, 2016, which I have previously foreshadowed laying on the Table of this House. This Bill seeks to repeal and replace the Act that came into force in 2010.
While the new Bill has been the subject of contention to some; the same should know that the current legislation and my Ministry have been the subject of much criticism by the courts, citing noncompliance with a number of the unworkable provisions of the Act.
When the new Bill is tabled and its content justified, I look forward to bipartisan acceptance.
Summary of Budget
This year, my Ministry’s Capital Budget allocation is $124,614,000; that is, a bit more than $12.6 million over last year’s allocation. While this figure remains short of my Ministry’s requirement, we are committed to ensure that every dollar is properly expended for the building of a modern Bahamas.
On the recurrent side, the significant decrease in allocations reflect the transfer of administration of the staff of Roads and Parks to the Beaches and Parks Authority.
Cat Island, Rum Cay, and San Salvador
Mr. Speaker
As I consider the Family of Islands to account for my Ministry’s stewardship, I begin with my constituency of Cat Island, Rum Cay, and San Salvador.
Mr. Speaker
The residents and island of Rum Cay are recovering the ravages of Hurricane Joaquin. Again, we are in the Hurricane Season and I encourage all residents of The Bahamas to get themselves in a state of preparedness for any storm that may visit.
Joaquin severely damaged the public dock and the Sir Milo Butler Park. The sea surge destroyed about 85% of the rock wall that lined the boundary of the cemetery on the sea side.
Fortunately, the public roads wore the storm well. Last month, an engineering consultancy contract was awarded for the design of a new or refurbished docks in Rum Cay, San Salvador, and Acklins.
With the post hurricane remediation works, plans for the Health Clinic have been delayed. Construction documents are awaiting a Bill of Quantities.
Despite this delay, works are expected to begin before year’s end as part of the infrastructural upgrades to complement the introduction of National Health Insurance (NHI).
Rum Cay All Age School was undergoing major renovations prior to the storm. These renovations should be completed well ahead of the next school year.
Rum Cay will also be beneficiary of a new Government Complex, which will house the Police, Local Government Administrator, and Post Office at a cost of $600K.
Mr. Speaker
In San Salvador, works are nearing completion to ensure that every home damaged by Hurricane Joaquin is repaired or replaced.
The primary school was also damaged. While the summer break will offer some reprieve, we expect construction of a new primary school to commence within the coming weeks.
In speaking to the subject of the primary school, it is imperative for me to mention here, the exemplary service and retirement of the school’s former principal Mr. Paul Turnquest, who served The Bahamas for more than 40 years in the field of education.
Mr. Turnquest began his teaching career at San Salvador Teacher’s College at the age of 16; thereafter serving the islands of Long Island and Exuma. To San Salvador, he has remained a remarkable leader, mentor, role model, community builder and friend – faithful to God, church, family and his students. I thank him for his service.
Mr. Speaker
The project to rehabilitate the airport at San Salvador enlarged in scope following Hurricane Joaquin to cause the elimination of the modular building that existed prior to Joaquin. With the input of Club Med and the international airlines, the construction of a full concrete structure is nearing completion and was operational to coincide with the reopening of Club Med.
Apart from that, my Ministry has rehabilitated over 10 miles of the Queen’s Highway on San Salvador and constructed over 3,000 feet of seawall.
Mr. Speaker
During my contribution to the midyear budget debate, I expressed thanks to Ms. Melony Roach, BEC, BTC, and WSC for their urgent work to restore relevant services to the residents of San Salvador and Rum Cay. Today, I again add my thanks.
Mr. Speaker
My Ministry will construct a new state-of-the-art primary and secondary school on twenty acres of shared land in an area known as the Harbour Yard.
Work has already begun on clearing the site on which the two new schools will sit. The current primary school is located on a temporary site and used four trailers to accommodate school facilities. During the passage of Hurricane Joaquin, three of those four trailers were severely damaged as were other parts of the school.
The current site also lacks an integrated functionality as all of the buildings were stand-alone and presented mobility challenges during adverse weather.
The new primary school, which will be a state-of-the-art school, will replace the current school, which is located in Cockburn Town. It will include a computer room to accommodate 25 students, each with dedicated workspace and laptop; a library; a music room with special acoustic features; art room; a sick bay; study rooms; administration block; public waiting area; public and staff restrooms; and sports facilities for basketball, softball, track and field and tennis.
The current primary school has a complement of 100 students. When the new school is completed, it is anticipated that it will be able to double its capacity and boast special architectural features, such as connected, covered walkways to all classrooms and building spaces; roof finishes of architectural shingles; and hurricane resistant windows and doors.
Cabinet has already approved a contract for this project and the same should be executed within the next two weeks.
For Cat Island, Mr. Speaker
Comprehensive infrastructural developments are afoot. We have constructed over 4,500 feet of seawall and carried out sand seal repair works to the roadway throughout the island and works are ongoing.
We are cooperating with the Ministry of Health to complete assessments of the health infrastructure for the island. Government has already approved the issuance of a contract to demolish the Clinic at Orange Creek and construct a new one and also for a new clinic at Old Bight.
The other clinic at Smith’s Bay has been targeted for upgrading and a contract will issue shortly. These upgrades also assist the process of Health System Strengthening in preparation for NHI.
The Police and technical officers from my Ministry have already agreed a site for the Police Station at Arthur’s Town. Plans are being finalised and works will begin shortly.
Additionally, Government has agreed to issue a contract to Woslee Construction for the new airport terminal and runway rehabilitation at New Bight.
Mr. Speaker
Smith’s Bay’s packing house upgrade is nearing completion to facilitate farmers’ benefitting from participation in BAMSI. A site is being decided for a processing kitchen to allow them to process their produce to add to the value of their product. The refurbishment of the Smith’s Bay Dock has also been approved and works have commenced. Additionally, the Bennett’s Harbour Dock will be dredged and completed with breakwater to retard silting.
Grand Bahama
I move to Grand Bahama.
Mr. Speaker
The Minister of Grand Bahama was expansive in his articulation of the works that have been done and are ongoing there. Good on-time progress has been made in the construction of a new state-of-the-art Police Fire Station at a contract amount of just over $6.1M.
We are also supervising the contract with All Bahamas Construction for design/build remediation to the Fishing Hole challenge. All Bahamas has provided an engineering innovation to withstand normal to extreme environmental conditions, with minimal negative impact on the settlement of Queen’s Cove while providing for the environmental preservation and restoration of communication between the Hawksbill Creek and the Freeport Harbour.
We are also working toward a solution for the serious coastal erosion and loss of highway being encountered at Smith’s Point. In fact, Smith’s Point Seawall Project will commence this month at a cost of $4.9M.
Repairs to the Garnet Levarity Justice Centre at a contract sum of just over $230K at Freeport are progressing.
Abaco
Mr. Speaker
I turn to Abaco.
The North Abaco Port project derives from concessional loan funding from the China EXIM Bank. The finance agreement included some $3.9 million for design build components of the project to be awarded to local sub-contractors. Works are in-hand and have the support of the BEST Commission. The projected completion date is January 2017.
Mr. Speaker
With the most recent construction of the Air Freight Terminal Building at a cost of $5M, the Marsh Harbour International Airport complete.
Abaco is now the beneficiary of a critical addition to its infrastructure to include the upgrade of all roads in Marsh Harbour, Dundas Town, Murphy Town, and Sandy Point settlement roads, representing an investment of around $23M.
As well, my Ministry is also supervising the renewal and resurfacing of major roads and sea defences in Abaco, including Elbow Cay and Green Turtle Cay, at a cost of over $21.5 million.
Other major projects supervised by my Ministry in Abaco are:
· Moore’s Island Dock at $1.5M, which is in the Design Phase; and
· Bolstering of the sea defences at the Hope Town Teachers Residence at $230K
· Sandy Point Mail Boat Dock at $1.5M
Andros
Mr. Speaker
I move to Andros.
My Ministry executed a contract with Bethell’s Trucking in February of last year for roadworks in North Andros. The works will facilitate critical operations between BAMSI and the San Andros Airport, over some 9.7 miles of the main road. Roadworks for the remainder of North and Central Andros are taking a phased approach to include the paving of the main and settlement roads and upgrade of the water distribution mains in Mastic Point and Nicholls Town. The roads projects are estimated at $27M. The projected projects and price tags beyond the current scope total another $20M.
BAMSI
Mr. Speaker
The BAMSI project has advanced significantly and is funded, in large part, from my Ministry’s budget. The following summary is provided in respect of the buildings and supportive infrastructure for the project.
Main Buildings:
The Administration Building is at 98% Practical Completion. The contractor, Brokell Construction Co. Ltd., is completing punch list works. Building Control Inspections are ongoing.
The Campus Cafeteria is at 93% Completion. The Contractor, Sydmar Construction Co. Ltd. is completing finishes and M.E.P (that is, mechanical, electrical, and plumbing works), inclusive of Air Conditioning and Fire Protection Works.
In respect of the Cluster of Classrooms, which is at 99% Practical Completion, the Contractor Maudlyn Investments Ltd., will shortly complete Change Order Works. Building Control Inspections are being finalised.
The Lecture Theatre is at 20% Completion only. My Ministry suspended this contract with Gimp Construction Services Ltd., to allow for re-design of the project to expand the building’s use. My Ministry is expected to complete those revisions shortly.
The Maintenance Building is complete, but due to change of use, enhancements and MEP works are being tendered for completion.
Accommodations
The Female Dormitory is at 75% Completion. The contract with Andarco Construction Co. was determined and my Ministry negotiated a new contract to complete Building & MEP works with Contractor De’Vision.
The Male Dormitory, which was destroyed by fire was demolished by Gaitor’s Trucking. The contract with Paradigm Construction Co. was determined. Diamond Consultants were engaged to prepare construction drawings for a new Co-Ed Dormitory; and the project is now being prepared for tender.
All of the Renovations of Houses (eight in total) are at 100% Completion.
There are four other structures that will serve as accommodation for faculty. Each is two-storied with one bedroom and are at various levels of completion.
There are three one bedroom villas that will serve as accommodation for married students, each at varied levels of completion as well.
Infrastructure:
BAMSI has proposed an intricate network of interior roads. Cabinet has approved the project to formalise them. Funds are now being sourced from the Ministry of Finance to carry out the works.
A Contractors Tender List for the water and wastewater infrastructure and plant for sewerage treatment is being prepared. Meanwhile, water supply wells with pump & pressure tanks have been installed to the eight renovated houses, the maintenance building; and wells, pumps, pressure tanks and double septic tanks to the cluster of classrooms and administration building.
B.E.C. has commenced pole installation for temporary electricity. A contract to secure all materials equipment (including long-lead items) and complete the electrical power infrastructure for Phases I and II of BAMSI has been issued.
Finally, IT Consultants Proficient Business Services is presently completing a design proposal to meet the complex information and communications technology requirements for the project.
Mr. Speaker
With that brief overview, it is clear to see that my Ministry is making progress with BAMSI. Yes, the path to the present has been convoluted; but we press toward the finish. We have a core of young professionals who have resolved to see this project completed at a standard to which we can all be proud.
Unfortunately, ours is an environment where too many of us are always looking for errors or for someone to make an error. They are always seeking to criticise. We are not minding the noise of the market. We have too much to do. We press on.
Mr. Speaker
Other significant works that my Ministry has supervised or will supervise follow.
In Andros
· Dredging of the Mars Bay Dock at South Andros at a contract sum of more than $1M is scheduled for completion this month.
· Dredging for the Docks at Fresh Creek and Lisbon Creek will commence at completion of the Mars Bay Project.
· The Behring Point Dock was completed at a cost of $290K.
· The project to complete the primary school at Lowe at a cost of $6.1M was approved by Cabinet.
In Long Island
· New Terminal Building is being designed.
· Repair to the Clarence Town Dock is 95% complete.
· Repairs of Clarence Town Ramp and Seawall are to commence this month.
· Tender Documents are complete for the Salt Pond Dock.
On Eleuthera
· Dredging of Mouse Sound Channel at Spanish Wells was complete in May 2016.
· The $2.7M Three Island Dock Rehabilitation Project is complete.
· Construction works at the North Eleuthera High School at $2M continues.
· Renovation of the Administrator’s Residence at Rock Sound is 30% complete.
In the Exumas
· Repairs to the Georgetown Dock commenced last month; and repairs to the Regatta Dock, Exuma are set to begin this month.
· The George Town Culvert was replaced and being finished with asphalt surfacing.
· Last month, an engineering consultancy contract was awarded for the design of a new dock in Staniel Cay.
· The project to reconstruct the Little Exuma Culvert was completed in October last year.
· Project works for the Barretarre Dock have been approved by Cabinet.
· The Farmer’s Cay Dock was completed at a cost of more than $400K.
· A Letter of Intent has been issued to for refurbishment of the George Town Dock and works should begin shortly.
· Repairs to the Administrator’s Office is 90% complete.
In Acklins
· Salina Point Seawall was completed at contract sum of just under $134K.
· A contract was executed for refurbishment design of the Spring Point Dock at $89K.
Reconstruction of roads in North and South Acklins, including hurricane repair work is currently underway at a total cost of $30 million,
In Mayaguana
Reconstruction of roads including hurricane repair work at a total cost of $6.7 million is at 95% complete.
In Crooked Island
· Preliminary designs have been produced for the refurbishment of the Landrail Point Dock.
On Ragged Island
· The breakwater and harbour for the mail boat and Defence Force crafts are complete. This project dovetailed into the programme of the Defence Force contracts for the Sandy Bottom and Inagua Bases.
In New Providence
· 500 linear foot of concrete seawall at the Western Esplanade was completed August 2015.
· The Adelaide Village Road Bridge was replaced in July 2015.
· The maintenance contract of the Paradise Island East Bridge commenced in February 2016 and is planned to be completed in December 2016.
· Structural Repairs of the Churchill Building will be completed in June 2016.
· Structural Repairs of the British Legion Building on Baillou Road are complete.
· Projects to improve the educational system of The Bahamas include:
o Continuation of Phase III of the project for the expansion of C.H. Reeves at $2M
o Completion of renovations to the former St. Bede’s Primary School, now Sister Annie Thompson Preschool, at $3M.
o Completion of renovations to the former Our Lady’s Primary School, now Marjorie Davis Special Needs School, at $3M.
o Construction of the Claridge Primary Preschool is 75% complete at a contract sum of $700K
o Negotiations are ongoing to secure a contract for the construction of 4 classrooms at the primary school at Elizabeth Estates at a contract sum of $1.3M
o Renovations at the former AndyGar Preschool is $500K are substantially complete.
o The redevelopment of A.F. Adderley is imminent with the construction of a state-of-the-art 25 classroom facility at $15M.
Mr. Speaker
Other works in New Providence include:
· Renovations to Bolam House for the offices of Ministry of Tourism at $9M are expected to be complete by year’s end.
· Renovations to Detention Centre at $2M to include the dormitory, kitchen and dining areas are nearing completion.
· Works are 53% complete for renovation to various roofs of buildings at the Bahamas Correctional Centre at contract sum of just under $500K.
· Repairs have been effected to public parks including Garden Hills Park and Windsor Park.
· The Pothole Repair Programme is been added for my Ministry’s agenda. The repair programme is progressing very well. My Ministry has spent in excess of $1M to render most major roads pothole free. The recent spate of rain has, of course, presented more challenges. While the Ministry’s inspectors are constantly looking for road defects, the public can assist our efforts by contacting 302-9700.
Mr. Speaker
Phase I of the Big Pond Park Development Project on Blue Hill Road is now complete. Phase II is underway. You will recall that this project is tied to the New Providence Road Improvement Project. The later use of the park as a venue for enterprise and recreation are phenomenal. The park in the heart of our urban community says that nothing is too good for the average Bahamian.
Mr. Speaker
Other capital works including renovations, have been foreshadowed by client Ministries and give good reference to how this Government is on course to meet the change agenda set out in our Charter.
Urban Renewal
Mr. Speaker
People are infinitely more important than things. We said that while we campaigned for office in opposition and the same holds true for us now. That is why I am always happy to turn my attention to Urban Renewal.
Mr. Speaker
Our Charter mandates that Urban Renewal 2.0 “to provide information and knowledge of all services and take prompt and affirmative action where necessary to ensure that all citizens of The Bahamas live in a safe and peaceful environment where all the basic necessities of life are accessible and attainable.”
This powerful, purpose-driven initiative addresses moral, social, and economic issues such as poverty, unemployment, crime and criminality, and the fear of crime and criminality.
Its programmes address children and youth-at-risk; the elderly; the indigent; poor and inadequate housing; public health and educational deficiencies; and the disenfranchised and marginalised.
Mr. Speaker
Urban Renewal recognises that man is a composite being comprised of spirit, soul, and body, and has designed its outreach and programmes to transform the whole person.
In this regard, the programmes of Urban Renewal encourage residents to take ownership of their streets, neighbourhoods, and communities, making decisions in their best interest, shaping their development and charting their destiny.
The Small Home Repairs Programme is a signal initiative of the Urban Renewal Programme. It has had tangible results within a relatively short period, rehabilitating the physical environs within urban and traditional communities.
From November 2013 to the end of this fiscal period, the Urban Renewal Commission would have completed repairs to over 1,000 homes within all 23 constituencies in New Providence.
Mr. Speaker
Over one thousand (1,000) homeowners are rejoicing that this Government has seen their plight, heard their cries for assistance, and has delivered.
To go even further, Mr. Speaker
More than a thousand individuals have been employed to effect repairs, and that number represents local contractors and tradespersons: carpenters, masons, plumbers, tile layers, painters, electricians; also semi-skilled persons, all assisting in the Small Home Repairs Programme.
To date, the Government has invested almost $10 million in the Small Home Repairs Programme. This represents a significant economic injection into inner city communities, and a sizable employment of small local contractors and tradespersons.
We have resolved in Urban Renewal to have repaired some 3,000 houses in urban and traditional communities by the end of the 2016/2017 fiscal year.
Bahamas Power and Light Company, Ltd
Mr. Speaker
A modern Bahamas is dependent on energy reform. I now draw attention to another milestone accomplished in the history of The Bahamas…the Bahamas Power and Light Company, Limited (BPL).
By the time we came to office in 2012, the FNM had placed our Bahamas in such a difficult state, a reduced standard of living had become the “new normal”. More and more Bahamians suffered from a level of unprecedented economic hardship.
By our Charter, we committed to initiate a plan to lower the cost of electricity in The Bahamas. Not only did we initiate that plan, we delivered!
For an example, I bring to you the situation of one of my staff members. Up to 2010, she was able to run a central air conditioning unit in her home. After that, electricity costs became so high that she had to discontinue use of her central unit. By 2012, she was paying up to $800 per month for electricity without central air conditioning. $800 per month!
The same staff member came to me last week to say that she got her electricity bill. She has not bothered to run her central air conditioning unit anymore, but she runs a ductless unit every night. Her bill was $133.69. She said that she called the company to verify that it was in fact her full bill. From $800/month to $133.69!
Mr. Speaker
This administration, since taking office, deliberately set about to totally reform the electricity sector. We amended the Electricity Act to allow for the creation of BPL and enacted the legislation to free the company of legacy debt and provide for rate reduction bonds.
At its creation, BPL took over the assets of the Bahamas Electricity Corporation and brought in a world-class operator, PowerSecure. BPL has a Board which is comprised of able Bahamian professionals from diverse backgrounds and two (2) members designated by PowerSecure.
PowerSecure has recently been taken over by a $45 Billion company, Southern Inc. By extension, therefore, BPL has at its disposal, the best possible partnership and technical expertise.
As its first mandate, the Board considered and approved a robust Financial and Business Plan. This will pave the way for raising $600M in the market place on favourable terms without Government Guarantee. Moreover, this will allow the Government to be freed from the Guarantee it has given on about $250 Million loan. BPL is finalising its mandate with world-class banks who will take it to the market.
The BPL Business Plan, which is to be updated annually, PowerSecure includes the following cost of service components, New Providence generation, transmission and distribution, Family Islands, customer services, renewables, financial strength, and financing.
Cost of Service
Mr Speaker
In 2012, BEC’s blended cost of service was $0.44/kWh. Customers are already enjoying marked reductions in their cost of service. A significant portion of the reduction comes from fuel savings.
According to BPL’s business plan, further savings are expected from more efficient generating assets, improved maintenance of existing assets, economic dispatch initiatives, fuel mix optimisation, more favourable fuel rates, and the divesting of BEC’s legacy debt.
Discussions are now being held to develop a new tariff structure, to avoid reductions in staff, institutionalise a system of “pay as you go”, and to forgive customer debts and to put lights back on.
A prepaid system is expected to substantially reduce bad debt expense, while providing customers with greater control over the timing and frequency of payments as well as energy usage.
PowerSecure’s generation plan for New Providence centres on improving reliability, lowering generation cost, and upgrading the transmission and distribution system, particularly to improve operations at Clifton Pier, which is much less expensive in terms of fuels and repairs.
As BPL moves toward its objective, 80 MW of temporary rental units will be deployed to Blue Hills to meet interim needs while Clifton Pier assets are upgraded and new capacity is installed.
Given the frequent and inconvenient power outages in New Providence, this is an urgent requirement.
For the Family Islands PowerSecure’s plan expands to replacing inefficient generators with high-efficiency generators, enhancing the capacity for emergency preparedness, and introducing solar capacity, beginning at Long Cay, Crooked Island and Salina Point, Acklins.
PowerSecure plans a gradual approach to the Government’s renewable energy self-generation (RESG) initiative, with a pilot programme ahead of full devolution.
Mr. Speaker
PowerSecure proposes an organisational structure in which BPL’s CEO will be supported by direct reports responsible for administration, legal and regulatory affairs, customer service, operations and generation, and finance and accounting.
The CEO has already identified three Bahamians for the executive team and the executive recruitment exercise continues. BPL will adjust to the changing business needs that result from efficiency and process improvements in the business plan as well as contain costs.
The business plan will position BPL as a fully stand-alone, self-sustainable entity. The rate reduction bond will allow BPL to start life debt free and will further remove the $240 million guarantee from the Government’s debt burden.
BPL plans to seek an additional $100 million of debt financing in FY2017/2018 to fund subsequent phases of its plan and anticipates that BPL will be able to realise favourable terms due to its significantly improved creditworthiness, with a target rating of at least BBB (S&P) and A (Fitch).
BPL expects to be able to fund all other operations and initiatives through cash flows and meet about half of the Capital Expenditure from the profitability.
Water and Sewerage Corporation
Mr. Speaker
I move to the Water and Sewerage Corporation, where the best news has been our continued savings in respect of non-revenue water (NRW) losses.
The NRW programme has realised a reduction in losses from nearly 7M gallons per day (Migd) to less than 3Migd. Over 2.5Billion gallons have been saved to date. This volume of water would cost $15M to produce.
With knowledge gained, WSC staff has been targeting Family Islands NRW reduction with success in various locations but especially in Waterford, South Eleuthera where water purchases from the desalination plant were cut by 50% saving about $0.3M annually.
Mr. Speaker
The Wastewater Master Plan for New Providence is completed. The design and bidding documents for sewerage works are prepared for tender.
As well, the $41M Loan programme has been approved by Caribbean Development Bank to address water improvement works in the Family Islands of Cat Island, Crooked Island, Eleuthera, Long Island, San Salvador, and South Andros.
The CDB loan programme also includes two projects in New Providence. Contracts valued at more than $4M were awarded and construction commenced for new water supplies in Pinewood, Coral Lakes and Boatswain areas of New Providence. The total investment is estimated at close to $7M inclusive of well testing and decommissioning, and yard pipework to accommodate public supply.
The WSC remains committed to continual infrastructure upgrades in the Family Islands with commissioning of
o new desalinated water supply and distribution systems in Abraham’s Bay, Betsy Bay, and Pirates Well Mayaguana; and
o a new desalinated water supply in Simms, Long Island
Mr. Speaker
Water quality issues continue to challenge the WSC in areas of New Providence with old cast iron infrastructure. This requires continued investments to replace these pipes along with additional water treatment enhancements to reduce corrosivity.
While we have made tremendous gains in respect of NRW, losses are still high and will require further investments in replacement of inferior plastic pipes.
In this regard, the WSC will continue its reduction of NRW efforts in New Providence and Family Islands to realise at least another 1.5 Billion gallons are expected to be saved in NP during the next fiscal year.
WSC launched an aggressive Customer Win Back campaign in October 2015. This campaign aims to capitalise on ample water supplies and consistent improved pressures to regain the confidence of former customers and to attract new customers.
Since the beginning of March 2016, tenants are also able to apply for their own accounts so that safe potable city water is readily accessible to them.
Mr. Speaker
Draft legislation now rests with the AG’s Office to reform the sector allowing URCA to assume responsibility for economic regulation of water as it has with telecommunications and more recently with electricity. This will cause URCA to have the robust oversight intended from its creation.
The Straw Market Authority
Mr. Speaker
The Straw Market Authority (SMA) continues to work with service providers to ensure that the markets operate in the most efficient manner and are first class facilities.
Mr. Speaker
The Authority is also making in-roads by systematically addressing vendor attrition as a consequence of death, retirement, and transfers around the markets. The training programmes for staff and vendors have been enhanced and are continuing.
Mr. Speaker
The World Famous Downtown Straw Market, which is relatively new, is in a serious state of disrepair. Urgent works are being carried out to avert disaster, particularly during the hurricane season.
The Authority will also work in conjunction with BAIC and the various handicraft associations toward the development and implementation of the use of natural Bahamian materials in souvenir and craft items.
Bahamasair
Mr. Speaker
I now move to the national flag carrier, Bahamasair.
Mr. Speaker
I take this opportunity to point to the unprecedented support that the current administration has given to the National Flag Carrier of the Bahamasair.
Mr. Speaker
Within six months of coming to office in 2012, $1.8 million in overdue increment payments were made to the AAAWU (Airport Airline and Allied Workers Union) and BALPA (Bahamas Airline Professional Pilots Association). These contractual obligations were three years in arrears.
In 2012, Industrial Agreements between Bahamasair and four associated trade unions were expired for more than three years. During the past year, new agreements were executed, and $1.6 million in retroactive increments and salary payments were made.
In 2013, a third Boeing 737-500 jet aircraft was purchased for Bahamasair in order to facilitate increased passenger demands and enhance charter opportunities.
In November 2014, Cabinet made the conscious decision to replace Bahamasair’s aged fleet of Dash-8 aircraft with brand new state-of-the-art ATR turboprops.
o Cabinet approved a $120M loan to facilitate this purchase. This decision is in keeping with the government’s commitment and the airline’s mission statement which is to provide safe, reliable and economic air service throughout the Bahamas and internationally.
o This new fleet of aircraft, which is a mix of 50 and 70 seat aircraft, allows for a $5M reduction in maintenance cost during each of the first three years of operation, reduces fuel consumption by 7%, and increases seating capacity by 2200 per week over Nassau, Freeport, Fort Lauderdale and West Palm Beach without having to increase frequency.
On Wednesday of this week, Bahamasair will introduce twice weekly service between Freeport and Orlando using the new ATR aircraft. This is in keeping with the government’s mandate to the Board for increased airlift into Grand Bahama.
Bahamasair is now considering pioneering direct service from California to the Bahamas for a while, and I am awaiting their proposal.
In 2012, Bahamasair’s annual deficit was $25,543,570. This year’s forecasted loss is $11,838,247. The deficit for the next fiscal year which begins on July 1st is budgeted to be $18,521,603 which includes $7,524,784 in payments towards the $120 million ATR loan.
Presently, Bahamasair’s 45 year old aircraft maintenance facility is undergoing major repairs at a cost of $2.8 million. This project is being supervised by Engineers from the Ministry of Works, and all payments and stages of work are subject to approval by these individuals.
Yes, Mr. Speaker
The airline is poised to provide much improved customer services. The introduction of the new ATR fleet will improve on-time performance, improve revenues, reduce fuel, passenger compensation, maintenance costs and overtime.
Bahamasair commits to continue its initiatives to:
· Enhance the airlines impeccable safety record.
· Improve customer experience through staff training, better communications and management’s visibility.
· Reduce expenses through fuel management, increased maintenance in-house capability, outsourcing certain ground handling activities, which has become common within the airline industry. This requires serious consideration towards redeployment of staff affected.
· Improve revenue stream through better pricing and passenger load management strategies; and
· Adjust to international and domestic routes networks.
Apart from the aforementioned, management has taken steps to improve inventory management on schedule services through the introduction of a revised pricing strategy that will facilitate
· More competitive fares structure
· Improved responses to demand patterns
· Improving yields and revenue growth across domestic and international networks.
These initiatives aim to attract markets such as local and international sports, religions and educational activities.
Mr. Speaker
Bahamasair continues to play a very important role to protect, maintain and grow airlift into and throughout the Bahamas. Bahamasair ensures that there is always uninterrupted airlift between the Family Islands and the outside world. The airline serves as an insurance policy for tourism.
Bahamasair makes direct input into the public treasury for duties, stamp tax, business license, fuel tax, airport tax, departure tax, etc.
Bahamasair purchases services from government agencies year round, particularly, Nassau Airport Development Company (NAD) for landings and rent ($1.6M), Customs and Immigration ($2.2M) combined at Nassau.
Conclusion
Mr. Speaker
This Government is on the road to success. We have taken faith, hard work, belief, courage, and above all persistence for the journey; and we are taking bold and calculated decisions to sustain us.
Looking forward to a bright future, I wholeheartedly support the resolution on behalf of the people of Cat Island, Rum Cay, and San Salvador.
