NASSAU, BAHAMAS – Democratic National Alliance Leader Arinthia Komolafe yesterday called the government’s Electricity Rate Reduction Bond (ERRB) a “bail out” that will only increase the burden on the working class.
The government last week tabled an Electricity Rate Reduction Bond Bill (ERRB), 2019, which will allow BPL to restructure more than $320 million in inherited debt, and secure more than $350 million in new funding to address longstanding issues.
The legislation makes clear that BPL’s customer base will be relied upon to service the bond issue.
“The assault on the shrinking middle class and further increase in the burden on the working class continues,” said Komolafe in a press statement.
“It is crystal clear that the Free National Movement (FNM) government is now officially tone deaf to the cries and concerns of the struggling masses.
“Our people are finding it difficult to make ends meet with a regressive Value Added Tax (VAT) which has significantly increased the cost of living and doing business in The Bahamas. The ousted Progressive Liberal Party (PLP) imposed this tax at 7.5% and their successor FNM government increased the tax to 12% but that is not all.
She continued: ‘The PLP anticipated and planned to introduce the Rate Reduction Bond (RRB) during their last term and the FNM is now in the process of placing an additional $650 million on the backs of taxpayers to bail out a Bahamas Power and Light (BPL) in crisis.”
“After enduring the worst summer of blackouts in recent memory and witnessing scandal after scandal within BPL, the Bahamian people will have to bear the cost of years of mismanagement, cronyism, nepotism and corruption of this utility. We still don’t have answers on the firing of the former BPL Board, the Shell deal, Wartsilla contract, investigations of political interference and how we will recoup the $95 million from Shell.”
The purpose of the ERRB 2019 Bill is to establish a legal framework for the organization of the Bahamas Rate Reduction Bond Limited (BRRBL) and the issuance of rate reduction bonds that will be secured by the property or other assets of the BRRBL for the sole purpose of indirect payment and satisfaction of the rate reduction bond financing liabilities.
The Bahamas Rate Reduction Bond Ltd, is the special purpose vehicle that will be responsible for issuing the bonds and making investor interest payments.
Komolafe said: “The creation of a new entity for the RRB is the FNM’s version of Resolve Bahamas which was created by the PLP to bail out Bank of The Bahamas after years of mismanagement. How long will the Bahamian people be called upon to address the failures of the PLP and FNM?
“Why are we being asked to spend more money on BPL without any parallel plan to restructure, reform and reorganize the entity for greater efficiency and effectiveness? It is unbelievable that the same people that created the crisis are being entrusted with an additional $650 million to spend as they wish.
“The same BPL Board and management is being empowered by Parliament to incur hundreds of millions of dollars in debt that we and our children will have to pay back.
The DNA leader stressed her party remains the only political organization to propose a “comprehensive and diverse energy reform plan” that features public empowerment.
Komolafe said: “The suggestion that an increase in our electricity is an alternative or better option to increase in taxes is hogwash and nonsensical. Such commentary assumes that we have a real alternative to BPL for our power supply. This is absolute insanity.
“We maintain that it is time to get serious about renewable energy and explore alternative forms of energy generation which favor the environment such as solar, hydro, waste and wind. Consumers must not be penalized for embracing solarization and assisting with the reduction of our carbon footprint as well as the movement away from fossil fuels.