NASSAU, BAHAMAS — The Opposition is raising concerns over the deal announced on Thursday between 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 previously under consideration by the former FNM administration, which involved a deal solely between Shell and the government — one in which the jetty and regasification terminal would have been owned and operated by a public entity for the benefit of the Bahamian people,” stated Opposition leader Michael Pintard.
Pintard further criticized the Davis Administration for introducing a third party—FOCOL—without following the legally required transparent bidding process. “Instead of maintaining the same deal brokered with the former FNM government, the Davis Administration has presented an entirely new arrangement,” Pintard continued. “Where is the legally required transparent bidding process to bring in a private operator? Why is FOCOL being awarded a multi-year, multi-million-dollar lucrative deal outside of the provisions of the Public Procurement Act, which requires such contracts to be put out to tender?”
The Opposition leader also voiced concerns over the government’s privatization efforts, particularly regarding Bahamas Power and Light (BPL). “The ongoing dismantling and privatization of BPL by this PLP government continues to transfer hundreds of millions of dollars of BPL assets and tens of millions in annual revenue to politically connected private business interests,” Pintard said. “What’s worse is the government’s refusal to make these agreements public or explain why only a select few are benefiting from the sale and outsourcing of critical public assets that should belong to all Bahamians.”
Pintard also questioned the Prime Minister’s role in allowing private interests to dominate the energy reform process. “The Prime Minister has yet to explain why he allowed private interests to control the energy reform process, ensuring they reap inordinate profits at the expense of the Bahamian people,” Pintard asserted. “A responsible and fair-minded government would have pursued options that allow Bahamians to be material beneficiaries of all the necessary investments in the energy sector.”
Pintard outlined several key questions Prime Minister Davis must address: “What is the term of the deal? What specific role does FOCOL play? What price did the government negotiate for LNG, and what will be the resulting fuel price per kWh charged to the Bahamian people? Will the Bahamian people benefit when LNG market prices decrease? What is the cost of the tolling arrangement negotiated for transporting the gas from the terminal to the power plants, and who will own the pipelines that will carry the gas?”
In his remarks at the LNG terminal signing, Prime Minister Philip Davis acknowledged the ongoing challenges of high electricity costs, outdated infrastructure, and a debt-laden BPL. “Utility-scale solar projects are on track for Abaco, Andros, Eleuthera, Exuma, New Providence, Long Island, and San Salvador,” Davis said. “This process is being driven by several Bahamian companies leading the way to our renewable energy future. We are also modernizing the power grid to improve reliability and reduce costs. And with the signing of this agreement, we are embracing cleaner energy with the development of the first LNG terminal at Clifton Pier. Phase one is set to begin before the end of this year.”
He continued: “We see the integration of LNG into our fuel mix as a major step in the right direction, moving away from ‘dirtier’ fossil fuels like diesel and oil, which will significantly lower our carbon emissions. LNG is also typically cheaper and less volatile in price than diesel and oil. By building this new industry, we anticipate significant economic impact, including job creation. In short, this agreement is a vital component of our energy reform and economic development plans.”
The project is expected to create jobs for Bahamians, with phases one and two costing nearly $200 million. The terminal construction is a joint venture between FOCOL and Shell, including the regasification and fuel storage facilities. A government special-purpose vehicle will be responsible for purchasing the LNG from Shell and reselling it to power generators. Prime Minister Philip Davis stated that the agreement is a key element of the government’s energy reform plans.
