Works minister: PLP passed defective rate reduction bond bill

Works minister: PLP passed defective rate reduction bond bill
Minister of Public Works Desmond Bannister (FILE PHOTO)

NASSAU, BAHAMAS – Minister of Public Works Desmond Bannister yesterday defended the new Electricity Rate Reduction Bond Bill (ERRB) 2019 as an attempt to improve on “defective” legislation passed by the former administration.

Bannister called opposition criticisms of the bill “dishonest”, adding the Progressive Liberal Party did a lousy job when it passed the existing ERRB in 2015.

He said the government plans to withdraw the 2015 act in its entirety.

Bannister said: “One of the reasons we are amending the law that they passed is to try and improve the situation for the Bahamian people.

“The whole idea behind the way we are amending the law is to make an improvement on essentially a defective law that they passed.

“They passed the law into 2015 to create a rate reduction bond that is defective.”

He said: “It’s defective because it can’t pass the test on any modern bond markets, nobody is going to invest in it in the way they passed the law.

“In fact we are going to withdraw the whole act that they passed and bring an entirely new rate reduction bond act, but anybody that made that statement is being dishonest.”

The public works minister was responding to criticism levied by PLP Deputy Leader Chester Cooper at a recent branch meeting.

Cooper said the bond an “affront” to the Bahamian people, warning it could drive the country into another recession.

Bannister said: “If Cooper had done his homework, he would have appreciated that the PLP introduced the rate reduction bond into law in The Bahamas.

“It is still the law, they passed it in 2015. What the government is trying to do is clean up what they have done, because they did such a lousy job on it and we are trying to improve what they have done. T

He added: “The rate reduction bond was passed in 2015 under the PLP so Cooper is being disingenuous, and anyone who made those comments is being dishonest.

At the PLP branch meeting, Cooper called the 2019 bill a “new BPL tax’.

“I don’t like this new BPL tax. It is an affront to Bahamians and could threaten to drive us into another recession,” Cooper said.

He added: “How could they possibly think higher bills makes any sense? I guess it’s the people time.”

The EERB legislation, which will replace a similar act passed previously by the former Christie administration, provides that the bond fee paid by consumers can be adjusted at a minimum semi-annually to ensure that the collection of such fee will produce sufficient revenues to pay all ongoing financing costs as the same become due and payable.

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.