Too many questions still unanswered

Friday, March 8, 2019

EDITOR, The Tribune.

I can only sum up the current affairs of BEC/BPL, as a fiasco. According to the BPL union leader, there are too many unanswered questions surrounding this new power plant deal. BEC, a company once profitable enough to provide loans to the government, has operated in the red for over 20+ years. Their downfall is a direct result of greed (e.g. BEC/Alstom bribery), political interference and incompetence from political appointees. Under this administration, it seems nothing has changed.

So here we have it, another company received a contract from the government and yet again, without it going to tender. This smells like another back-door deal, where the technocrats, the operators and Union of BEC are never consulted. To add further insult (similar to the Oban signing), a foreigner sat next to government officials and said (indirectly) that Bahamians are not competent enough to run the new power plant. So, I ask why all the secrecy?

Considering the government’s lack of transparency, I decided to research the company and the engines they produced.

a. Jan 2019, (Reuters) – “Finnish ship technology and power-plant maker Wartsila said it would shed 1,200 jobs, six percent of its workforce, to save 100 million euros a year by the end of 2020”. This is not looked at as a serious financial issue.

b. The company produces one tri fuel engine, the Wärtsilä 50DF and one dual fuel engine, the Wärtsilä 34DF.

c. I also did a price per megawatt comparison between an Australian based power company and BPL. Both companies will be using Wärtsilä’s 50DF, tri fuel, four-stroke engine that runs on light fuel oil (LFO) or heavy fuel oil (HFO), and can switch over from gas to LFO/HFO.

Australia:

In 2018, Wärtsilä was chosen to supply a 211 MW Smart Power Generation plant, comprising 12 Wärtsilä 50DF dual-fuel engines, to the customer, AGL Energy Limited, of South Australia. The order with Wärtsilä, is valued over 100 M€ or $111.86 million dollars. Not knowing the details of this contract, it’s easy to assume this company is purchasing each generator for an average $9.3 million dollars (each generating average 17.5MW of power or $530,000 per MW)

Bahamas:

BPL to receive 7 tri fuel (light fuel oil, heavy fuel oil and Gas) high-efficiency engines from the Finnish technology group Wartsila. These engines will provide BPL with 132-megawatt power at the Clifton Pier Plant. The estimate cost of the new power plant is $95 million dollars. Not knowing the details of this contract, it’s easy to assume BPL purchased each generator for an average $13.5 million dollars (each generating average 18.8MW of power or $718,000 per MW)

With my limited knowledge of the industry, I have few questions.

i. What is the Total Overnight Capital Cost?

ii. Why does it appear we are paying $200,000 more per Mega Watt than Australia, especially for the same type engines? Australia paying $111 million for 12 engines, vs our $95 million for 7 engines.

iii. Why are we paying for these engines and not Shell that was picked to build our power plant under their agreement with the government?

iv. Why is the government still seeking to use Bunker C or Heavy Fuel Oil?

v. Why are we still installing internal combustion engines?

KISHON R TURNER,

Nassau,

March 7, 2019

Comments

TheMadHatter says...

Kishon, you are an anomaly here. Asking questions? Thinking? How dare you !!!! The Govt works very hard to ensure that Bahamians remain dumb and stupid with D+ averages. Obviously you managed to slip thru the cracks and somehow obtain an education and for some reason not carry that education away for use by Canada or USA.

Don't worry. Im sure they are redoubling their efforts and will ensure that fewer and fewer people like you are created. Intelligence is a threat to the system.

May God continue to guide you and protect you good sir.

Posted 9 March 2019, 8:35 a.m. Suggest removal

DDK says...

Excellent questions and research, Mr. Turner. Now if only we had some answers.....

Posted 9 March 2019, 11:55 a.m. Suggest removal

ThisIsOurs says...

This hit out at me from the article

"*here we have it, another company received a contract from the government and yet again, without it going to tender. This smells like another back-door deal, where the technocrats, the operators and Union of BEC are never consulted. To add further insult (similar to the Oban signing), a foreigner sat next to government officials and said (indirectly) that Bahamians are not competent enough to run the new power plant. So, I ask why all the secrecy?*"

Especially troubling as Darnelle Osbourne's chief complaint was unsubstantiated requests for approval of contracts.

It's clear to me that the govt is getting bad advice from someone to whom they have given explicit unquestioned trust.

Mr Turner asks whether another company has gotten a backdoor deal with no tender. And worse yet a company that was apparently in trouble in January.

Does anyone notice a pattern? GIBC let go half it's staff about three weeks ago. The following week the DPM announced that GIBC was in charge of THE GOVERNMENT'S training initiative (?????) GIBC didn't come to the Bahamas to operate a training centre how did they get the contract and who else knew about the RFP? Can we get a breakdown on how many students they have and what courses they're teaching them, numbers per course and length of courses.

It's like the government is trying to save an initiative that was ill thought out and improperly planned from the start.

Remember the CEB bill draft? When I read it I said to a friend this sounds like a non-legal college student wrote this for a term paper. That was "my opinion. Then at last years business outlook I heard Mrs Whitehead(? believe that was the lady's name) a seasoned lawyer repeat the same thing. Poorly drafted. You have to wonder, how did such a poorly drafted document get past an entire legal department and the AG???? And how many lawyers in Parliament who voted for that thing without objection? How many senators, the Bill passing gatekeepers, reviewed and didn't request a complete review?

My personal belief, someone is out of their depth and offering advice directly to the PM on a wide range of issues. The PM having a propensity not to trust anyone who doesn't agree with him 100%, not having a depth of knowledge on a wide range of topics and not given to analytical thinking, does whatever these people suggest.

Where are the parallels between the BEC fiasco and the tech hub?

Posted 10 March 2019, 6:20 a.m. Suggest removal

That "D" Average to which we are so fond of referring reaches many 'high' places, as does the corruption.

Posted 11 March 2019, 12:55 p.m. Suggest removal

Bahamianbychoice says...

Installing engines of this magnitude requires studies and proper site preparation, hence the date provided by Shell NA. Given this, how then can all be in order to receive these new engines this quickly. How can BPL have the protection and distribution repaired and improved to receive these new engines and the power generated? If not properly repaired and site ready...will there not be ongoing challenges in delivering the power?

This then leads me to ask the question the Engineers involved at BPL in this decision, which I believe at a minimum are the CEO, COO, Rollins and I believe there is an Engineer on the new board. Are any of these person recognized by the Engineering Body in the Bahamas? Which ones have power generation experience?

Did the previous terminated Board Directors not voice their concern about involving other companies in this process? Wasn't their concern kickbacks?

Why is the PM not insisting on proper studies and transparency with such an important and impactful issue for the Bahamian people??

Posted 11 March 2019, 1:05 p.m. Suggest removal

"Why is the PM not insisting on proper studies and transparency with such an important and impactful issue for the Bahamian people??" LOADED QUESTION! Are there any polite answers?

Posted 11 March 2019, 1:31 p.m. Suggest removal

Also, if funds were diverted to purchase these engines..funds I believe from re-financing through loans..are any loan covenants broken? How will this reflect on the country if this indeed has happened. How will the protection and distributions improvements now be funded in time for the new engines to be brought online?

If covenants have been broken...then it begs the question...what financial experience in these kinds of matters does this new board have? Is this Board prepared especially given the last Board felt funds could not be used for such an exercise. Bahamian people deserve better clarity on this.

The MOU will now be changed, how will the costing going forward be with Shell NA?