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Advertisers Dupuch & Turnquest & Co.
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BEC meets development demands and prepares for privatization
Providing electricity in an archipelago of 700 islands, 28 of which are inhabited, is a challenge. A recent boom in business has increased demand and Bahamas Electricity Corp. is working diligently to anticipate coming needs.
Bradley S. Roberts, acting general manager of the Bahamas Electricity Corp., reported that in the last six months, BEC has added a 30-megawatt, slow-speed diesel engine at a cost of $60 million to increase its generation capacity. Currently, a total of 278 megawatts is being produced at two separate generation stations by seven slow-speed diesel engines, nine gas and one steam turbine. The maximum demand on hot summer days is 174 megawatts with the least amount, 130 megawatts, being used on winter days.
According to Roberts, the new slow-speed diesel engine will run 90 percent of the time for the next 20 years and burn a lower grade of fuel more efficiently. BEC currently spends more than $50 million per year on fuel but with increased, more efficient capacity, it expects to spend less.
The Atlantis project on Paradise Island, a mega resort development by Sun International costing more than $500 million, is using 15 megawatts, or half of the newly available capacity. For this reason, plans are to add another 30-megawatt, slow-speed diesel engine within the next 20 months.
“A development like Atlantis has a total effect on the economy. It has lowered unemployment and revived the economy generally. It has had a multiplying effect. There has been growth in the financial sector and an increase in commercial and business construction. Everything seems to be improving and thriving,” said Roberts. “Fortunately, we take all of this into consideration and are always planning ahead. We have a development program and are increasing and updating our facilities annually.”
Promoted to acting general manager in October, Roberts, an engineer by training who has spent 39 years with BEC, 20 of them in an executive capacity in charge of areas such as generation, distribution, operation, maintenance and infrastructure, has seen BEC transform as it prepares for privatization.
Roberts reported that six years ago, BEC did a preliminary privatization study that outlined the options for implementing privatization, finding a strategic partner, finding local investors who might be interested and dealing with staffing questions, among other issues.
Out of that study, other recommendations were made as to how the company might improve its efficiency to anticipate the privatization process. “If we run the organization more like a private company, when that time comes, the distribution and the problems will be minimized. We felt the strategy that we needed to employ, privatization or no privatization, was to keep the cost of electricity down as low as we can for the consumer, making sure at the same time that the quality is continually improving,” he said. A kilowatt-hour currently has a base rate of 16 cents and a small surcharge that brings the total cost to about 17.5 cents. That price makes The Bahamas very competitive with other Caribbean islands.
To lower costs, BEC is outsourcing some of its non-essential functions, such as grounds keeping and construction and has overhauled its staffing. Attrition has been used to lower its number of non-essential staff. While the company once employed 1,100 people, it now employs 993. This cutback has been done at the same time as BEC is providing service to more islands.
Roberts explained that in preparation for the privatization, a major electrification project was completed in 1998, bringing electricity to all the inhabited islands in the Bahamas. The project was a government mandate and was done in two phases with Phase One completed in the early ‘90s. Phase Two, which included upgrading and extending systems, was completed in 1998 and cost more than $46 million, part of which was funded by the Inter-American Development Bank. BEC currently operates in 28 different locations throughout the islands with the exception of three: Grand Bahama, which has its own power company; Inagua, where Morton Salt Co. provides power; and Spanish Wells.
The electrification project was a promise that the government of the Bahamas had made to its citizens before BEC could be privatized. Now that it has been completed, “we are waiting for the government to tell us it is ready to start the privatization process,” stated Roberts.
According to all indicators, privatization of BEC should occur as soon as privatization of the Bahamas Telephone Corp. is completed.
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Table of Contents The Bahamas: An established tourism and tax-free financial services center experiences a renaissance |
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