NASSAU, BAHAMAS – The Opposition notes with concern the deal announced today with Shell and FOCOL for the provision of liquefied natural gas (LNG) and the operation of a related regasification terminal.
This deal is far removed from the arrangement that was under consideration by the previous FNM administration, which contemplated a deal solely between Shell and the government – a deal in which the jetty and regasification terminal would have been owned and operated by a public entity for the benefit of the Bahamian people.
Instead, while pretending that this is the same deal that was brokered with the then FNM government, the Davis Administration has come up with a brand-new arrangement. This administration has brought in a third party – FOCOL – without going through the required transparent bidding process. Where was the legally required transparent bidding process to bring on a private operator? Why is FOCOL being handed a multi-year, multi-million-dollar lucrative arrangement outside the provisions of the Public Procurement Act, which requires contracts like this to be put out to tender?
With its ongoing open dismantling and privatization of BPL, this PLP government continues to hand over hundreds of millions of dollars of BPL assets and tens of millions in annual BPL revenue to politically well-connected private business interests. Worse, the government is refusing to make the agreements public, nor explain to the nation why only a handpicked few are allowed a chance to benefit from the sale and outsourcing of critical public assets that have always been owned by all Bahamians.
The Prime Minister cannot give a good explanation as to why he has allowed the energy reform effort to be hijacked by private interests who stand to reap inordinate profits at the expense of the Bahamian people. A responsible and fair-minded government would have instead pursued options that would have allowed Bahamians broadly to be material beneficiaries of all the necessary investments in the energy sector.
Key and critical questions the Prime Minister needs to answer are:
(i) What is the term of the deal?
(ii) What specific role does FOCOL play in this deal?
(iii) What price did the government negotiate for LNG, and what will be the resulting fuel price per kWh charged to the Bahamian people?
(iv) Will the Bahamian people benefit when LNG market prices decrease?
(v) What is the cost of the tolling arrangement negotiated to transport the gas from the terminal facility to the power plants, and who will own the pipelines that will transport the gas?
