Former BPL procurement Chair speaks

Bahamas Power and Light Headquarters on Baillou Hill Road.
Nick Dean

Former BPL Procurement Chair Nick Dean is firing back at statements made by Minister of Works Desmond Bannister regarding his (Dean) and Darnell Osborne’s performance while serving on the now-dismissed BPL board.  In a statement released to the news media, Mr. Dean lamented that transparency and accountability should not just be catch-phrases that are thrown around to sway public opinion but should be part of everyday practice, especially where the public coffers are concerned.  He said that he is left to wonder whether, despite the fact that the former board members are highly qualified professionals, they were expected to simply show up once a month and serve as rubber stamps while the company and its staff suffered around them.

Mr. Dean specifically took issue with Minister Bannister’s allegation that the former chairman exposed New Providence to power outages by blocking the purchase of critical parts and that BPL was facing $10 Million plus loss after he (Dean) and Darnell Osborne refused to authorize the acquisition of equipment needed to restore ten percent of the utility’s Nassau generation capacity.  Mr. Dean says there were many deficiencies associated with the funding request and he could not in good conscience request $4 million to be spent on behalf of the Bahamian people with this deficient level of supporting documentation. In his statement, he repeatedly denies rejecting the funding request or refusing to authorize acquisition of equipment, as asserted by the Minister.  Mr. Dean says he simply requested that the CEO provide essential supporting documentation that could be combined with his funding request for presentation to the board.

Mr. Dean claims that the system of checks and balances was working exactly as required by the Procurement Policy and good corporate governance to safeguard BPL from questionable spending activities as well as to protect the board from having the disbursement of large sums of money come into question upon closer scrutiny in the future.  He opined that in an era where the Bahamian People are demanding heightened transparency and accountability, it is painfully ironic that when those principles are actually applied they are seen as being obstructionist and a hindrance.

Mr. Dean charges that the Minister curiously omitted key information in his statements, which he assumes was in error.   His response – to “assist” the Minister by “filling in the blanks” in a statement which follows.

PRESS STATEMENT

27thAUGUST, 2018

Anybody who knows me would concede that I am a very private individual.  I am not a politician but an ordinary citizen.  I have contributed in my own small way to my community and those around me. I lend a helping hand wherever I can and stay away from the spotlight and public fanfare.  Needless to say, I am distraught about this entire BPL debacle and the way that the Minister of Works has handled the situation.  Even though Mrs. Osborne, Mrs. Thompson and I have been treated most unfairly in this matter, I was resolved to just let the situation blow over so that I could move on with my life.

We were called upon to exercise restraint “for the sake of the country” by not making any additional public statements by PM Minnis.  We were promised that Minister Bannister had been given the same request and would abide by it as well.  To date, we have abided by this and have not issued any public statements beyond our original statement released last week to defend our reputations and to encourage the new board.  Needless to say, I was horrified to learn that not only did Minister Bannister continue his public onslaught, but he intensified and expanded it by dragging me into the situation with untrue and inaccurate accusations.  I am troubled by Minister Bannister’s lack of civility in this discourse.  In recent days I have remained silent and have been impressed by the considerable restraint exercised by Mrs. Osborne in light of the relentless public attacks she has endured at the hands of Minister Bannister.   As someone who has seen the truth of these matters from the inside, I found the Minister’s comments sad and unfortunate.  Mrs. Osborne has handled the situation with grace and dignity. Instead of the half-truths and sensationalism that has made headlines for the past week or so, the Bahamian People deserve to hear the truth.

To be clear I have no intention of publicly or otherwise trading barbs with Minister Bannister.  I wish him no ill will.  I am of the opinion that when our leaders fail, we fail.  In fact, I am eager for this to get behind him as well so that he can stop focusing time on us and focus his attention on the huge tasks of running the Ministry of Works and managing the new BPL board.  It is with great displeasure that I now find myself in the position where I must defend my professional reputation and integrity against recent attacks by the Minister.

I am confused that the Minister saw it fit to allege that the former chairman “…exposed New Providence to power outages by blocking the purchase of critical parts” and that “…BPL was facing $10 Million plus loss after Darnell Osborne and fellow former director, Nick Dean, refused to authorize the acquisition of equipment needed to restore ten percent of the utility’s Nassau generation capacity.”

Many questions arose after I read this statement.  Was it a case of the Minister seeking to willfully mislead the public by suggesting that Mrs. Osborne and I were intentionally trying to delay the purchase of necessary parts for some unknown reason? Was the Minister seriously suggesting that 10 percent of the utility’s (BPL) power generating capacity for new Providence was offline because we did not order parts for one diesel engine at Clifton Pier? Was the Minister seriously trying to suggest that Mrs. Osborne and I were single-handedly responsible for the power outages plaguing BPL and costing the Company $10 million? Was the Minister unaware that the engine that failed is only one of several engines at the Clifton Plant that were already offline and in need desperate of repair?  I could not decide if the Minister was intentionally being untruthful or if he was woefully lacking a fundamental understanding of how BPL or even the board (which he assembled) works.  He apparently was also ill-informed about the current condition of the equipment and machinery at the Clifton Pier Power plant.  I invite the good Minister to do as I have done and simply meet and speak with the very capable technical staff at the plant. I’m certain they would be happy to share with him the realities of plant operation and the current state of affairs at the facility.

The Act empowers the Board to “consider and approve matters relating to the acquisition and disposal of assets of BPL”.  Board members in discharging this statutory duty must exercise their business judgment in a transparent and fair manner through competitive bidding.

For clarification, matters requiring funding in excess of $1million are brought before the Procurement Committee.  As Chair of the Procurement Committee, I was responsible for reviewing the requests to ensure compliance with transparent, fair and competitive protocols and preparing reports to be put forward to the board for a vote.  It was not just up to me, or even Mrs. Osborne for that matter, to make the final decision either way.  These are matters that are decided by the Board.   To suggest otherwise is just plain dishonest.

To be clear, the incident to which the Minister is referring is about a turbocharger which failed on one of the engines at the Clifton Pier power plant. The Minister has curiously omitted key information in his statement.  I assume that this was in error and will assist him by filling in the blanks.

There were many glaring deficiencies in the turbocharger proposal that caused me to request additional information.  I will list only a few of the major deficiencies below:

(1) The engine in question failed on May 30, 2018.  At the time the Board was not informed of this failure.  In fact, I was not provided with a memo requesting funding from CEO Heastie until July 25, 2018.  If there was such a heightened sense of urgency regarding replacement of this item, why the two-month delay between the failure’s occurrence and when the request to replace the parts was made?  The good Minister should look to CEO Heastie for the answer to this question.

 

(2) The request for funding put forth by the CEO was supported by a single proposal from a company with which he already had a relationship.  Given the backdrop of controversy surrounding previous boards, I requested that he provide competing bids to ensure accountability, transparency, and fairness in the procurement process.  In fact, the CEO’s funding request was in violation of BPL Procurement Policy Section 6.a which requires funding requests over $100,000 to be competitively bid or be accompanied by an Executive Summary signed by the sponsoring director, Chief Financial Officer (CFO), Chief Operating Officer (COO) and Chief Executive Officer (CEO).  Neither of these submissions was made.  I did not reject the funding request on this basis.  I simply asked the CEO for competing bids or a statement, in compliance with the Procurement Policy, confirming that this was not possible.  I never received either.

 

 

(3) The CEO requested funding in the amount of $4 million dollars.  The proposal which he presented in support of his funding request totaled some €1.4 million Euros (Approximately $1.66 million Dollars). This raised some loud alarms in my head.  Even if the fund request was to replace the turbochargers for two engines as suggested in the funding memo, the numbers did not add up.  I did not make any accusations of fraud or anything sinister but simply chalked it up to be a matter of insufficient information being provided. I did not reject the funding request on this basis.  I simply asked for a full accounting of the funds being sought.

 

(4) The pricing in the supporting proposal was incomplete.  It was for parts only and did not include other costs, such as insurance, freight, and installation.  The absence of this information would have left BPL open to unacceptable risk with such a potentially large unknown factor after committing to the initial purchase. I did not reject the funding request on this basis.  I simply asked for a breakdown of all costs associated with the purchase so that we could make an informed decision.

 

 

(5)  There was no technical opinion from Sr. BPL technical staff providing support for the purchase of the part.  At this level of funding, it would be essential to have an opinion from the Chief Operating Officer (COO) or at least the Director of Generation in support of the purchase.   I did not reject the funding request on this basis.  I simply asked for an opinion from a Sr. Technical staff member to accompany the request.

 

(6) Within the funding request memo itself that was presented by the CEO, there was an option to repair the engine by replacing the damaged casings instead of purchasing two new turbochargers.  This was listed at a cost of $600,000 which is much lower than the $4 million being requested.  This option was adequately explored in the CEO’s request for funding.  I did not reject the funding request on this basis. I simply asked for a cost analysis of competing options.

 

 

(7) The time to make a decision was artificially short.  The plant had functioned since May 30 without the said engine in operation.  The proposal presented to me was dated July 24th, 2018 and sent to me on July 25th, 2018.  The proposal was only valid until July 31 and I was being urged by the CEO and newly appointed Executive Director Rollins to hurry up and make a decision.  I responded that at this level of funding it behooves us to ensure that our decisions are made properly. Furthermore, I was never given a good reason why the decision had to be made under such rushed conditions.  I was never provided an answer to the question of the cost implications of making the decision in eight days instead of seven.  Had I been provided with satisfactory supporting information I could have quickly put the request to the board for approval.  I did not reject the funding request on this basis.  I simply requested more time so that the interests of the Bahamian People could be properly served.

 

(8) Only one turbocharger (of a pair) on one engine at Clifton Plant failed on May 30. The CEO was requesting funding for replacement for both turbochargers on a second engine which was still in operation. The new turbochargers were purportedly more efficient than the ones they were replacing but were untested.  I did not reject the funding request on this basis. I simply suggested that we consider the option of phasing the installation such that we could evaluate the performance of the first pair of turbochargers before purchasing the second pair.

There were many more deficiencies associated with the funding request.  Suffice it to say that I could not in good conscience request $4 million to be spent on behalf of the Bahamian people with this deficient level of supporting documentation. It should be noted that at no point did I reject the funding requestor “refuse to authorize acquisition of equipment”, as asserted by the Minister.  I simply wrote a single response to the CEO’s request for funding asking him to provide some essential supporting documentation that I could combine with his funding request for presentation to the board.  I also sent my detailed response within four days of receiving the request for funding from CEO Heastie (compared to the two months it took to get the request to me in the first place).  In other words, the system of checks and balances was working exactly as required by the Procurement Policy and good corporate governance. This was to safeguard BPL from questionable spending activities as well as to protect the board (including CEO Heastie) from having the disbursement of large sums of money come into question upon closer scrutiny in the future.  Had CEO Heastie ever provided the information requested, I could have quickly assembled my report and presented it to the board for a vote.  I had not even made up my mind either for or against purchase of the turbochargers.  There was simply not enough basic information upon which to responsibly make that decision.

The Bahamian people can decide for themselves how they would like their money handled.  In an era where the Bahamian People are demanding heightened transparency and accountability, it is painfully ironic that when those principles are actually applied they are seen as being obstructionist and a hindrance.

To his credit, the Minister did an excellent job in assembling the original BPL board.  It included two accountants and a civil/structural engineer.  We are very detail-oriented people who pay close attention to numbers.  When those numbers do not add up, we ask questions.  Much to our dismay, this level of scrutiny and attention to detail apparently seems unwelcome in quasi-private corporations.  Transparency and accountability should not just be catch-phrases that are thrown around to sway public opinion.  They should be part of everyday practice, especially where the public coffers are concerned.  I am left to wonder whether despite the fact that we are highly qualified professionals, we were expected to simply show up once a month, eat the good board meeting food, and serve as rubber stamps while the company and its staff suffered around us. If that is indeed the case then, once again, the Minister did an excellent job by removing us from the board.  BPL has been plagued with generation issues for years.  That the Minister would suggest that all of a sudden Mrs. Osborne and I are the blame for power outages and BPL generation woes is bizarre and simply unfathomable.

During my brief tenure at BPL, I had the good fortune of meeting some of the staff at BPL.  I found them to be intelligent, committed and highly resourceful given the circumstances. They have worked miracles at times with limited resources and under very challenging conditions.  It was an honor to have served them even if only for a short while.

 

Despite the level of discourse surrounding recent events at BPL, this episode should be used as a teachable moment to seriously explore the mechanisms by which the BPL Board operates and to put more measures in place to minimize impacts from external interference and internal ambiguity.  In addition to the many physical upgrades required at BPL, I offered that company would benefit greatly from implementation of a company-wide quality management system (such as ISO 9001-2015) with clearly articulated policies and procedures. This would eliminate some of the subjectivity associated with decision making and would result in a more efficient and transparent operation of the company.  I had proposed this as one of my goals to achieve during my tenure as a director.

Again, I must remind the Minister that I am not a politician.  I did not sign up for this type of public abuse.  I did not seek out this appointment nor did I relish in it.  I only heeded the Minister’s personal request to me to give public service to my country and make my contribution to the Bahamian people.  I am a regular person, a husband, a father, a son, a citizen and a voter!  I am not even a member of the BPL board any longer.  The Minister should bear in mind that I do not work for him.  In fact, as an elected public official, he works for me. We have reached a new low in public discourse when elected officials see it fit to turn, unprovoked, on their own citizens in the manner in which the Minister has chosen to proceed. I trust that he will regain control of his actions and realize that what he is now doing is wrong, unacceptable and unbecoming of someone in his position.  I implore the good Minister to leave us alone and return to the ministerial business to which Prime Minister has appointed him to handle.

 

Mr. Nick Dean, Former Chair – Procurement Committee