By NATARIO McKENZIE

Tribune Business Reporter

nmckenzie@tribunemedia.net

THE cash-strapped Bahamas Electricity Corporation (BEC) is currently owed $143 million by the Bahamian private sector, its chairman said yesterday, adding that it was sinking further into financial problems.

During his contribution in the House of Assembly on a $250 million loan refinancing for BEC, Leslie Miller said: “The money being guaranteed by the Bahamas government is not for new financing but, rather, the extension of existing facilities already extended to BEC through its lenders.

The necessity for refinancing began at the birth of the original loan in October 2009. At that time the only option available to BEC was a three-year loan that required a government guarantee, due to the poor financial state of the Corporation. Three years years later, the Corporation must refinance its existing debt to its lenders.”

Mr Miller added that $200 million will go towards the refinancing of existing facilities, while BEC was also indebted to the tune of $35 million over payments to Shell Western to cover a substantial fuel balance. The remaining $15 million from the $250 million bond will be used to cover financing fees and other loans already extended to the Corporation.

Revealing the depths of BEC`s financial struggles, Mr Miller said the Corporation had suffered a $26 million loss in 2009. It then generated a minuscule profit of $200,000 in 2010, which the chairman said resulted from a decision to defer several major projects, including the maintenance of generator units.

Mr Miller said BEC continued to suffer further financial losses in 2011, noting that necessary overhauls alone cost the Corporation $10 million. “In the 2012 fiscal year, BEC would have lost in excess of $18 million,” he added, noting that the inability of customers to pay their bills on time has resulted in serious cash flow problems.

“BEC continues to struggle with non-payments by the private sector. The amount (owed) in 2009 was $91 million, in 2010 it was $118 million, in 2011 it jumped to $148 million. 2012 saw a slight decrease to $143 million which is now owed to BEC,” said Mr Miller.

Commenting on BEC’s escalating fuel costs, Mr Miller said: “In 2009, BEC’s total fuel bill was $201 million. In 2010, the figure jumped to $277 million. In 2011 it went to $358 million, in 2012 it went to $384 million. These escalating increases in fuel costs are significantly hampering the ability of BEC to meet its obligation, and hampering the people of the Bahamas from paying their BEC bills.”

Mr Miller added that that a small BEC user in January 2010 received a bill for $162.72. “The fuel surcharge was $63.77. In 2011, in January, their bill was only $143.38 cents, but they paid BEC $89.10 for fuel surcharge. In 2012, the bill increased to $174, but they paid $120.84 in fuel surcharge. That’s enough to cause someone to raise hell as to why we pay BEC more and more for fuel surcharge while we try to decrease the use of our appliances every day,” said Mr Miller.

“One of the major supermarkets in January 2010, their total bill was $34,000, the fuel surcharge was $14,000. He then put in apparatus to use less electricity, the proper bulbs and what have you. In January 2011, the bill again was $34,000. However, the fuel surcharge went from $14,000 to $22,000.

“That’s why you find that the cost of food is so expensive. He has to cover his costs by increasing the costs to consumers. In January 2012, his bill increased to $43,000, but his fuel surcharge went from $21,000 to $30,000, same use of electricity, same building,” said Mr Miller.