Former Chairman Calls BEC 'Bloated'

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September 17, 2012

Former executives from the Bahamas Electricity Corporation (BEC) are calling the firm's 1,000-strong workforce "bloated" and are throwing their weight behind the elimination of overtime. Michael Moss, the previous chairman of BEC, and Dionisio D'Aguilar, former board member, agree with the current management that costs must be slashed at the public corporation to ensure its survival. But beyond the issue of overtime are a number of systemic issues that have been lingering for years.

The removal of overtime is just one step whereby the workforce should be reconsidered and perhaps reduced. "If you look at staffing numbers, I would say for the Family Islands they are ideal. Here, in New Providence, there is no question that it's bloated," Moss told Guardian Business. "BEC is about 20 percent overstaffed." Late last week, Leslie Miller, Moss' successor, announced that the reduction of overtime is an immediate necessity.

He estimated this segment costs up to $1 million per month. BEC employees are also paid the most compared to other public corporations or even government jobs. Michael Halkitis, the state minister of finance, said last month that the government needs to cut its annual expenditure to public corporations by approximately $40 million to help balance the books. "What we have to do is make them more efficient and deliver these services at a lower rate," the minister said.

Moss agreed with Halkitis that a major reason for overtime is a lack of efficiency and best practices at BEC. For example, the former chairman noted that, unlike modern utility companies, BEC does not perform "live line work", whereby repairs are conducted while keeping power on at homes and businesses. The result, he said, is the need to perform additional work either at night or on weekends.

"It is considered safe in the industry. I don't know why we don't do it. My board put in place for its introduction," he added. D'Aguilar, the president of Superwash, told Guardian Business that the public corporation simply does not operate in a best practices environment. Many of the operations are obsolete, and because of "government meddling", important changes never get made.

According to D'Aguilar, two assistant general managers were fired prior to the election for incompetence. The former board member told Guardian Business each worker was given $180,000 as severance. "And then they were rehired. Miller brought them back," D'Aguilar said. "It's a total mess. The whole system needs to change. It's a flawed business model. You just need to get the politicians out of it."

Moss added that chronic issues with maintenance is another reason for unnecessary overtime. He said much of his tenure was spent "catching up" on these issues. And now, that effort is being taken up by Miller and his board. Last week, he told Guardian Business that BEC plans to spend $300 million in the next couple of years to revamp and refurbish Clifton Pier.

The financing, according to Miller, will come form a combination of credit from the supplier and more borrowed funds from the government. "The government is not going to be able to borrow it," Moss felt. "And BEC's balance sheet won't be able to sustain it. But I wish them the best of luck." D'Aguilar also dismissed the possibility of such a large capital expenditure. He called BEC a "broken business model" and a "broken company". "We're at a point where we have an overpaid, overstaffed entity which doesn't perform. We only have ourselves to blame because we have allowed the politicians to grow it to where it is. There is no light at the end of the tunnel," according to D'Aguilar.

Click here to read more at The Nassau Guardian

News date : 09/17/2012    Category : Business, Nassau Guardian Stories

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