Cooper slams rate reduction bond legislation as ‘insidious’, “ill timed” and “ill intentioned”

Cooper slams rate reduction bond legislation as ‘insidious’, “ill timed” and “ill intentioned”
Exumas and Ragged Island MP Chester Cooper

NASSAU, BAHAMAS – Opposition Shadow Finance Minister and Progressive Liberal Party (PLP) deputy leader Chester Cooper yesterday slammed the Electricity Rate Reduction Bond Bill 2019 as an “insidious” piece of legislation that was not only “ill-timed” but also “ill-intentioned”.

During his contribution to debate, the Exuma and Ragged Island MP told Parliament the legislation would only “cause further, unnecessary pain on the Bahamian people”.

“This a tax and borrow on the backs of the Bahamian people government,” said Cooper.

“If the VAT-hike were not enough, the BPL bond will be the cherry on the top. This is a government that speaks of the people’s time yet finds every excuse to punish the people.”

“You made no mention of the rate reduction bond in your Fiscal Strategy Report and its potential impact on economy or the cost of living…no public education. No previous public disclosure.

“BPL has yet to say what the extra $350 million is for,” he continued.

“The Bahamian people are being asked not only to settle BPL’s legacy debt as the previous rate reduction bond was designed to do. But the Bahamian people are being asked to recapitalize BPL’s new generation when we had no idea until today what they’re talking about.

He added: “What generation? Is there not already a new plant set to open next month? When was a new deal with Wartsila struck? Has the government not already ordered new generation for Blue Hills?”

Cooper argued the poor and middle class were getting “steam-rolled” with others were receiving tax breaks and having taxes rolled back.

He went on to question the plan of the current BPL board for more reliable and cleaner energy.

“On August 17, 2018, the minister of works said in the Cabinet Office that the number one priority of the new BPL board was to finalize the memorandum of understanding with Shell,” he said.

“The MOU with Shell was signed in November 2018 by this current board. Shell was supposed to build 220-megawatts of generation from an LNG plan at no cost to the Bahamian people. Now, the Bahamian people must pay. Are we all to forget what was said and what took place?

“Where has this new board and this government demonstrated any competence with regard to the running of BPL? Where is the accountability of this administration with regard to BPL?”

Cooper also questioned what the interest rate would be on the bod offering.

“The five ‘Cs’ of credit are character, capacity, capital, conditions and collateral. Lenders use these together to evaluate the creditworthiness of potential borrowers. They also look at the plan,” he said.

“No one is going to give anyone $650 million without all of these aligning. No one is going to give anyone $650 million without a business plan in the first instance. So, if BPL is showing foreign investors a business plan, would it be so kind as to share it with the Bahamian people?

“Why are the Bahamian people paying for this when we don’t know what the rate will be, definitively how long it will last? We don’t know what the interest rate will be.”

He added: “If it is one percent, which we know it will not be, because it will be non-investment grade status, that represents $6.5 million extra per year on the backs of the Bahamian people. Why should we pay it when we are unclear how BPL procures its equipment or its fuel? Why is all of this something the Bahamian people should pay for?”

Cooper pointed to a “startling” lack of transparency.

“We would like to know, for instance, the status of the legacy debt holders. We would like to know who, aside from Citibank, advised on this bond offering,” he said.

“We would like to know how much the government as a shareholder “loaned” to BPL since the current administration took office. And we’d like to know why this amount has not been allocated as subventions under expenditure to truly reflect the government’s deficit spending.”