By NEIL HARTNELL
Tribune Business Editor
The Bahamas will suffer “immense problems” if Bahamas Power & Light (BPL) closes 2019 in the same condition it is now, a prominent businessman has warned.
Sir Franklyn Wilson told Tribune Business it was impossible to see the state-owned utility monopoly, and its electricity costs, “getting any worse” than they are now, estimating that its struggles were costing The Bahamas a “conservative” $10m per month.
Arguing that it was “so obvious what needs to happen” to transform BPL, the Arawak Homes and Sunshine Holdings chairman said it came down to “executing” changes that had been recognised as critical since the last Ingraham administration.
Focusing on The Bahamas’ economic prospects in 2019, Sir Franklyn added that it would be similarly “bad news” if the Minnis administration continues to find itself holding the Grand Lucayan resort come year-end.
And he expressed hope that the private sector, aided by ongoing US economic growth momentum, would find a way to “overcome the shortcomings in government” and “political immaturity and divisiveness” among The Bahamas’ leaders.
With high electricity costs continuing to burden businesses and households alike, Sir Franklyn told Tribune Business: “I can’t see BPL getting any worse. If BPL a year from now is not significantly improved, the country’s problems will be immense.
“I believe a year from now that BPL will be more efficient, have more capacity and not just be costing so much of the country’s money on its inability to execute on what so obviously needs to happen.
“Going back to the time of Michael Moss as executive chairman (to end-2012), there’s not been much discussion on what needs to happen at BPL. It’s been a question of how and who. BPL needs more capacity, and it’s costing time and money by not getting it done,” he continued.
“We’re in this wonderful position where we’ve identified the specific things that can be done. These are things we can check off the list and, if they are done, one would expect the overall effect to be favourable for the country.
“It’s so obvious what needs to happen. It’s pure execution; there’s no philosophy here. It’s getting it done. Every month it takes for BPL to do these things costs the country $10m a month; $10m goes down the pike. I’m being conservative in saying that. The country can sustain it, but it’s not in the country’s interest to sustain it.”
BPL electricity bills spiked towards the end of 2018 due to a combination of global oil price rises and the series of fires at its Clifton Pier Power Plant. The latter knocked out 60 Mega Watts (MW) of its most efficient generation capacity and forced BPL to rely heavily on its Blue Hills power plant, which uses more expensive fuel.
The state-owned utility was effectively caught in the “perfect storm”, with backlogged maintenance and aged, poorly maintained equipment further exacerbating its woes. BPL’s New Providence customers are also likely to see a major improvement in energy costs until 2021-2022, when Shell’s new multi-fuel power plant becomes operational.
In the short-term, the utility is aiming to reduce costs via the proposed Rate Reduction Bond (RRB) that is intended to refinance around $600-$650m in legacy obligations - including $350m in bond and bank debt; an $100m unfunded pension deficit; and numerous environmental clean-ups stemming from past oil spills.
Sir Franklyn, looking beyond New Providence, added: “I hope the Government will find someone they can virtually give the Grand Lucayan to provided they agree to inject capital and do things. If a year from now the Government continues to own that hotel that will really be bad news for the country.”
Turning to his 2019 “wish list”, the Arawak Homes chair added: “I pray for 2019 that we are less self-destructive, that we are able to build cohesive communities in the country, and the political leadership shows far greater maturity.
“I think that today the political leadership is not showing the political maturity in the interests of real, sustainable national development. It is my hope that the private sector do things that overcome shortcomings in the Government.
“I think we are destroying ourselves because of the immaturity of our political leaders by governing the country on the basis that half the people don’t count, and only half of the people are needed to run the country.”