By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

THE Prime Minister last night said “the fundamentals of the deal” to outsource Bahamas Power & Light’s (BPL) management are agreed amid pledges the deal will take the utility to a “gold standard”.

Philip Davis KC, speaking in the House of Assembly during the mid-year Budget debate, said the agreement’s details - including the financial, contractual and other obligations that the Government and chosen private sector partners will have to each other - are still being worked out as he urged the Opposition, critics and the Bahamian people to “stay tuned”.

“The fundamentals of the deal are in place, but the actual arrangements, the hardcore deal of the provisions - obligations on our part, obligations on the part of the other - they are still being worked out. You don’t go and tell the world what you’re trying to do. At the appropriate time it will be known what’s the full arrangement,” Mr Davis said, explaining why no further details have been provided.

Based on what has been disclosed thus far, the Government is mulling whether to split BPL into three separate entities. Two new companies would be created under this structure - one responsible for power generation, the other for transmission and distribution (T&D), which covers all the utility’s poles, wires and substations.

Kyle Wilson, the Bahamas Electrical Workers Union’s (BEWU) president, has confirmed that Pike Corporation and its subsidiary, Pike Electric, headquartered in the Carolinas are the frontrunners to take over BPL’s T&D business based on his meeting with Jobeth Coleby-Davis, minister of energy and transport, and her adviser, former BPL chief operating officer, Christina Alstom.

Meanwhile, several sources have suggested that Shell, which under the Minnis administration won the bidding process for out- sourcing New Providence’s base-load generation via the development of a new 225 Mega Watt (MW) power plant at Clifton Pier, may be a contender to take over generation again.’

This may possibly be in partnership with BISX-listed FOCOL Holdings, which is presently engaged in a $25m rights offering and could be tapped to participate in supplying liquefied natural gas (LNG) to BPL’s Clifton Pier plant. Sir Franklyn Wilson FOCOL’s chairman, and Dexter Adderley, its president and chief executive, both declined to comment.

BPL, as Bahamians now know it, would be left responsible for the back office - customer service, billing, collection. Mean- while, Mrs Coleby-Davis also gave little away in terms of details on the BPL deal while setting out her’s and the Government’s vision for the utility during her mid-year Budget presentation.

“We must fix BPL. We must rescue this sector. We have a plan, and we believe that our plan is transformative and market leading,” she asserted, adding that this involved reduced electricity prices, more reliable supply and the use of cleaner and more environmentally-friendly fuels.

Besides the ongoing bidding processes to supply 100 Mega Watts (MW) and 60-100 MW of solar and other energy forms on the Family Islands and New Providence, respectively, Mrs Coleby-Davis said the Government was focused on ensuring BPL has 340 MW of New Providence generation assets to meet present demand and “and be in a better position to meet forecasted growth in coming years”.

“This requires replacing aged or obsolete generation, purchasing considerable additional new generation and introducing LNG to increase efficiency of the generating assets, lower the overall cost and reduce environmental impacts,” she added.

“Mr deputy speaker, ours is a multi-pronged approach aimed at the revitalisation and modernisation of BPL. These steps are essential, but BPL does not have the financial resources to execute the plan. Therefore, it is paramount that we attract capital and expertise where needed to ensure that we build a robust and resilient utility capable of servicing the Bahamian people for generations to come.

“Our goal is to select partners who are best in class and have the global reach to achieve that gold standard.... As we roll out our plan, Mr deputy speaker, we are aiming to see a reduction in electricity bills being felt gradually by our consumers by July 2024 and greater improvements in the reliability and resiliency of our energy sector by the end of year.”

That will be aided by the imminent end of BPL’s fuel charge glide path. Mrs Coleby-Davis also reiterated the Government’s previous pledges that BPL will not be privatised or sold, and that there will be no staff lay-offs or attempts at “union busting”.

Michael Pintard, the Opposition’s leader, meanwhile hit out at the seeming lack of “competitive bidding” for the BPL public-private partnership (PPP) structures. Noting Mrs Coleby-Davis’ assertion that the Government’s BPL plan is “transformative”, he added: “We certainly don’t believe that, but even if it is transformative it certainly isn’t transparent because we don’t know what the plan is.”

Arguing that BPL employees, stakeholders, the public and entities that may have been interested in bidding were unaware of the Government’s intentions Mr Pintard said: “The minister makes the point this is what the deal is not. My God, we hired them to tell us what the deal is, and so we are concerned. We are still not clear on what the nature of the arrangement is.”

The Marco City MP demanded disclosure of “a plan of action, including a timeline” and specific details on the Government’s objectives for BPL and the wider energy sector since cheaper, more reliable electricity is critical to sparking higher economic growth rates than the 1.1 percent GDP expansion projected for the 2023-2024 fiscal year in the mid-year Budget book.

Pointing out that the Electricity Act will have to be amended to accomplish the Government’s plans for BPL, Mr Pintard added: “The reason I believe the minister has not announced the details is because they have not yet worked them out.”

Mr Davis had earlier said energy reform was central to the Government’s plans to ease the cost of living crisis for many middle and lower income Bahamian families. “Prices are too high, interruptions to service are too frequent, and our aging energy grid cannot handle current needs, let alone growing needs,” he acknowledged.

“To create a successful 21st century economy, we need a 21st century energy grid. Transforming, modernising and upgrading our old, deteriorating energy infrastructure is a matter of real and serious urgency. At the same time, and as you will hear in more detail from the minister of energy, BPL’s financial condition is dire – saddled with legacy debts and unfunded obligations.

“To add to the complexity and challenge, we are moving to upgrade our grid to be more efficient and to accommodate renewable energy at the same time that many countries in the world are attempting to do the same, and waiting times for critical materials are growing. The wait times are long and getting more elongated,” Mr Davis added.

“Mr deputy speaker, we are not daunted by the complexity of these challenges. We have been moving forward on four fronts – solar energy for our Family Islands, solar energy for New Providence, LNG as a partner fuel, and the transformation of our infrastructure.

“These are all critical, and all inter-related – all necessary to lower prices, increase reliability, add cleaner energy, upskill and train BPL workers – and strengthen the financial position of BPL, so that we can carry out these transformative changes and meet our commitments to our Bahamian workers. In the coming weeks, we will be concluding complex negotiations and the RFP process....”