‘DEAD IN THE WATER’: Davis’ public lashing effectively kills BPL’s rate reduction bond, says minister

Halkitis: But the loan, which is coming due, still has to be paid

NASSAU, BAHAMAS — Economic Affairs Minister Michael Halkitis said yesterday that Bahamas Power & Light’s (BPL) rate reduction bond (RRB) is effectively “dead in the water” given Prime Minister Philip Brave Davis’ scathing criticism of the process during an address in Parliament on Wednesday.

Speaking on the issue at a press briefing at the Office of the Prime Minister yesterday, Halkits explained: “There is a loan related to the rate reduction bond that comes due very soon. When you have a loan or any debt obligation with less than one year in maturity, it becomes a current liability, meaning it’s due.

“We have to find a way to deal with it. The rate reduction bond is supposed to retire the loan. We have to find a way to deal with the loan that is becoming due. That becomes a current obligation of the government.

“Either you have to go out and refinance it, or you have to find the money to pay the people back.”

This, Halkitis said, is reflected in the budget. 

Davis on Wednesday slammed as “totally disgraceful” BPL’s (BPL) “floundering attempt” to secure the RRB. While delivering a 2021/2022 supplementary budget statement in Parliament yesterday, he noted that more than $20 million has been spent with still no bond placement after four years.

“I am advised that, due to the delays in the offering, issuing the bond now would increase electricity costs by as much as 20 percent,” said Davis.

“During a time when many Bahamians are still rebuilding their communities from Hurricane Dorian, at a time when many persons are still unemployed due to the impact of COVID-19, at a time when many Bahamians have little or no financial recourse, a 20 percent increase in the cost of a basic necessity such as electricity simply cannot be justified.

“To add insult to this injury, the cost to-date facing this pot of gold at the end of the proverbial rainbow, the cost associated with this floundering attempt to obtain the bond, I am advised, is far in excess of $20 million.”

When asked whether the government will greenlight the RRB Halkitis said: “I think you can take from his comments that that is dead in the water, to use a colloquialism.”