BPL first assessment done, Abaco restoration bill to top $20 million and rebound may take months
#TheBahamas, September 6, 2019 — In a season where Bahamas Power and Light, BPL – the country’s electricity provider – is challenged to prove its consistent reliability, comes a new hurdle in the Abacos created by the region’s most horrific hurricane.
Little damage is reported in the south of the island, but central and north Abaco were decimated and the utility infrastructure was smashed in the fury of Sunday and Monday’s Hurricane Dorian.
“I’m very optimistic. I think, coming in from Sandy Point north to Wilson City, clearly we do see poles down but the majority of the infrastructure is intact. So it’s really good news for those in the south. We can get those poles – less than 100 of them – we can get those replanted, get the conductors back up and bring in some smaller generation assets and repower the south fairly quickly,” said BPL CEO, Whitney Heastie who led a 19-member delegation.
However, for areas like Marsh Harbour, Dundas Town and Murphy Town, the prognosis is dire.
“The recovery can start pretty soon if we start with the south, because they had minimal damage coming from the south. Central and North? We’re talking about months. Of course, there are provisions for outside help, but it’s going to be…I mean, some areas can take – in my estimation – some areas can take up to three, four months, or perhaps longer,” said Marvin Green, Assistant Manager of Distribution, BPL Abaco.
From the BPL statement issued on Thursday: After early assessments, Dr. Moxey said the initial budget estimate for recovery is somewhere between $25M to $30M. “We have infrastructure, we have resources we have to bring to bear and that’s the bill,” he said, adding that he had indicated to Minister of Works the Hon. Desmond Bannister that the assessment trips would result in an initial budget.”
BPL Chairman, Dr. Donovan Moxey and BPL CEO, Whitney Heastie led the delegation of 19 people on Wednesday (September 4) which had as its two main missions; assess the damages and locate BPL staff.
Chairman Moxey is optimistic about work in the south.
“The power plant has fared fairly well. There are one or two things that we do have to do in terms of cosmetic (corrections) but in terms of the engines, they’re all fine. They’re ready to go. The concern would be more around the load, because the engines’ minimum is more than the demand is right now,” he said.
Mr. Green said the damage caused by Hurricane Dorian, which is believed to have spawned tornadoes in addition to rushing, raging surge waters is far worse than hurricanes of the past, like 1999’s Hurricane Floyd.
“I never thought I would see something that made Hurricane Floyd look like child’s play. The winds – it was horrific. The weight and the force and the power of it. “Basically, right now, it’s hard to identify the landscape in some areas…because the structures that used to be there are no longer there. “Eighty to ninety percent of our infrastructure from Central Marsh Harbour going north is compromised. It’s going to be a long recovery.”
Many are saying Abaco in inhabitable, still Mr. Green reminded of the Caribbean region support which will take its cues from BPL when it comes to support.
The BPL statement: BPL has partnerships with suppliers, energy partners and even government agencies in the US, CARICOM and others – plus a network of former employees with skill sets we can use – and with the right complement of equipment and personnel, we believe we can bring South and even some parts of Central Abaco back to power within a month.
“So, it’s really good news for those in the south. We can get those poles – less than 100 of them – we can get those replanted, get the conductors back up and bring in some smaller generation assets and repower the south fairly quickly.”
A team from BPL returned to Abaco on Thursday to complete the assessment work. The electricity company explained it counts this hurricane restoration in Abaco as urgent despite the current objectives to boost capacity in New Providence.
“When you look at The Bahamas economy, Abaco is number three in terms of what it generates for the economy, so getting Abaco back up and running, there’s no question the government is committed to doing that as quickly as possible. “The good thing is, too, we have a lot of international support, and so we’re going to leverage all of that, everything we can,” Dr. Moxey said.
The initial BPL assessment team did not visit the island empty handed; food and water, health and medical supplies were delivered to BPL team members and their families.
Kamala Harris to meet with Caribbean leaders in The Bahamas
#USA, June 5, 2023 – Kamala Harris, United States Vice President will journey to Nassau Bahamas in June for a top level meeting with Caribbean leaders, marking the first time she will visit the region since occupying office in 2021.
According to the White House in a statement, the meeting will bring attention to a range of regional issues. Harris and the Caribbean leaders will continue talks on the shared efforts to address the climate crisis, such as promoting climate resilience and adaptation in the region and increasing energy security through clean energy.
Additionally, the statement informed that Harris’ trip “delivers on the Biden-Harris Administration’s commitment to advance cooperation with the Caribbean in pursuit of shared prosperity and security, and in recognition of the common bonds and interests between our nations.”
The June 8th meeting builds on and strengthens the U.S.-Caribbean Partnership to Address the Climate Crisis 2030, which was launched by the Vice President and Caribbean leaders in Los Angeles at the Summit of the Americas as further mentioned by White House Statement.
PM Davis ‘confident’ that Revenue Outturn will near $2.9 billion
By ERIC ROSE
Bahamas Information Services
#NASSAU, The Bahamas, May 30, 2023 – Prime Minister and Minister of Finance the Hon. Philip Davis said in the House of Assembly, on May 31, 2023, that public revenue receipts were strong over the nine-month period of July 2022 to March 2023, due to legislative reform, effective policy decisions, strengthened economic conditions and more efficient collection efforts.
“Analysis of the trends of the first three quarters of this fiscal year, and the years prior, suggest that the government is potentially set to exceed the $2.85 billion target set forth in the February 2023 Mid-year Supplementary Budget,” he said, during his Communication on Budget 2023.
“I am confident the revenue outturn at the end of the Fiscal Year 22/23 will near $2.9 billion.
Public spending has remained on track, and is well within the budgeted amount,” Prime Minister Davis added. “For this reason I am confident that expenditure at end of the Fiscal Year 2022/23 will almost reach the target of $3.1 billion set in the Supplementary Budget.”
He pointed out that the primary balance will, therefore, record a surplus of $68.4 million at the end of the fiscal year, a $54.8 million increase from the $13.6 million surplus projected in the supplementary budget.
“Likewise, the overall deficit is expected to improve to $520.6 million, down from the $575.4 million outlined in the supplementary budget,” he said.
Speaking of Government financing, Prime Minister Davis said that The Bahamas’ borrowing costs had begun to experience a downward trend in the previous quarter; but the cost of borrowing rose at the end of March 2023.
“At the end of the third quarter, the total average cost of borrowing for current outstanding debt had risen to an interest rate of 5.55 percent,” he pointed out. “This is notably higher than the previous year’s rate of 4.93 percent at the end of March 2022.
“This increase in borrowing costs is primarily attributable to the higher costs associated with external loan facilities.”
He added that, more specifically, the average interest rate for external financing had risen by 1.99 basis points, resulting in a rate of 5.55 percent as of March 2023, compared to the preceding year’s 3.56 percent.
“Throughout the past year, the interest rate policies of the major Central Banks have been restrictive, with a series of interest rate increases,” Prime Minister Davis said. “These adjustments have been primarily motivated by the escalation of inflation, and the resulting upsurge in interest rates has had an impact on the Bahamas’ external borrowing costs.”
He added: “However, the cost of borrowing in the domestic market has been declining over the past quarters.
Looking at it in more detail, we can see that:
- The average interest cost for domestic loans subsided by 27 basis points to 4.62 percent at end of March 2023, from 4.89 percent in the previous year;
- And the average interest cost for domestic bonds subsided by 3 basis points to 4.63 percent at the end of March 2023 from 4.66 percent in the previous year.”
Prime Minister Davis noted that those statistics affirmed the Government’s latest medium-term debt strategy, which aimed to shift its borrowing away from costly external commercial debt.
“Such debt has seen a sharp increase over the past five years, including recent interest rate hikes,” he said. “This strategic move will enable the government to once again rely predominantly on the domestic market to meet its financing requirements.”
Prime Minister Davis pointed out that, when considering the maturity of debt, or the average time it takes to repay the principal amount in the government’s debt portfolio, a longer maturity period led to a reduction in refinancing risk.
“In essence, prioritizing longer maturities is key to managing debt effectively,” he said. “And so another element of the government’s medium-term debt management strategy is the goal of prolonging the average maturity time of its debt.”
Prime Minister Davis said that, in the face of “unprecedented turbulence” in the global financial markets, the Government was able to maintain its average time to maturity.
“At end of March 2023, the average time to maturity has decreased slightly to 6.7 years, down from the previous 6.8 years in March 2022,” he said. “This variance is due solely to the external loan component, as the average time to maturity on internal debt has remained steady at 7.1 years.”
“This highlights the significance of maintaining a prudent approach to debt management, and aligning this administration’s practices with the government’s optimal debt strategy,” Prime Minister Davis added.
“It is imperative that we continue to exercise prudence in this area to ensure financial stability.”
(BIS Photos/Ulric Woodside)
PM states HCA model not working during budget debate
By ROBYN ADDERLEY
Bahamas Information Services
#FREEPORT, Grand Bahama, May 30, 2023 – The model of the Hawkbill Creek Act, the agreement between the Government of The Bahamas and the Grand Bahama Port Authority, is not working, said Prime Minister the Hon. Philip Davis during the opening of the 2023 Budget Debate on Wednesday, May 31 in the House of Assembly.
The island of Grand Bahama, he said, contributes 12 percent of the country’s GDP, however, there was a decline by 9 percent when compared to the previous year. Tourism, he said, increased in 2022 showing a growth in accommodation and food service.
“Unfortunately, the statistics show a prolonged decline in the Grand Bahamian economy. The evidence confirms the view of my government that the Hawksbill Creek economic model, which was meant to attract foreign direct investment, does not work.
“Furthermore, in our view, the government model of the Grand Bahama Port Authority must change, in order to realize the promise, growth and prosperity we all desire.
“Additionally, the Government of The Bahamas has serious concerns regarding the compliance of the GBPA and its related companies with the terms and conditions of the Hawksbill Creek Act, and its subsequent amendments.”
In the past, said the Prime Minister, administrations have attempted to address the issues however they appear to be “systemic and fundamental.” Decisive action will be taken, he continued, and a separate detailed announcement will be made at another time.
Prime Minister Davis mentioned that even though the GDP for several islands has experienced growth, Abaco and Grand Bahama have not done as well. Abaco, he said, saw a decline of 6 percent in 2022 with its contribution to the economy at 2.8 percent ranking the island as the third largest contributor.
“While there was a slight improvement in Abaco’s economy compared to 2019, it has yet to reach the levels seen before Hurricane Dorian. The decline in the economic activity is directly related to the slowdown in the real estate and construction sectors.”
He continued, “Declines in the real estate sector are directly as a result of a shift to higher intermediate consumption in 2022 from that of the previous two years. In terms of declines in construction, it should be noted that in 2020 and 2021, Abaco experienced significant recovery efforts in the form of debris removal, site preparation and building of damaged structures.
Such efforts bolstered the value added to the island’s GDP during those years. As those efforts wrap up, the industry saw a gradual decline as construction tempered to normal levels in 2022, resulting in a lower GDP.
Additionally, the Prime Minister said the Grand Bahama International Airport will be repaired, and a new healthcare facility will be built. Provisions have also been made for the continuation of an employment program for $4.7 million, along with the construction of a 50-meter swimming pool facility.
The House of Assembly has adjourned until Wednesday, June 7, when the debate will continue.
(BIS Photo/Ulric Woodside)
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