MONDAY, JULY 4, 2016
business@tribunemedia.net
Govt sought BPL fix in 12-months By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net
THE Government wanted Bahamas Power & Light’s (BPL) manager to guarantee its facilities would match the operational standards of comparable energy utilities within a year of taking over, Tribune Business can reveal. A draft copy of the management agreement between BPL, the Bahamas Electricity Corporation’s
(BEC) operating subsidiary, and PowerSecure shows that the Government wanted the latter to fulfill some challenging criteria in return for a guaranteed $2 million per year. In particular, the Christie administration and BPL Board wanted the Carolinas-based provider to bring all BEC’s legacy generation and transmission and distribution (T&D) equipment up to a reliable level of performance within 12 See PG B10
Year for PowerSecure to bring up to standard Draft deal gave Board power on disconnections Also had authority on rates, redundancies
Bahamas facing downgrade threat within two months By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net
THE Bahamas faces the prospect of a fresh credit rating downgrade within the next two months, after Moody’s was stunned by data showing two consecutive years of recession. The Wall Street rating agency announced on Friday that it was placing the Bahamas “on review” for a potential downgrade, due to both its unexpected economic contraction and further deterioration in the Government’s fiscal posi-
Govt urged: ‘Change air cargo fines today’ By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net
Bahamian courier: 25% C10 fee ‘ridiculous’
THE Government has been urged to “amend right away this Monday” the new and increased Customs sanctions on air cargo operators, a Bahamian courier company branding them “ridiculous”. Alan Burrows, proprietor of Tropix Express and Tropix Air, told Tribune Business that the fines introduced with the 2016-2017 Budget showed the Government had little to no understanding of the air cargo and logistics industries. He added that last-minute changes to cargo manifests via the Customs C10 form had been made virtually impossible by the 25 per cent “processing fee” that
Says courier licensing forms not ready And shows Govt doesn’t understand sector will now be levied on the value of the relevant cargo. Suggesting that such a fine would deter “emergency” shipments to the Bahamas, Mr Burrows also hit out at the Government’s failure to properly consult the industry on the changes. He revealed to Tribune Busi-
Reform progress ‘a lot slower’ than Bahamas desires By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net THE Chamber of Commerce’s chairman yesterday admitted the Bahamas’ economic and fiscal reform process was moving “a lot slower” than desired, as he called for unity to ward off a threatened downgrade. Gowon Bowe urged all the political parties to “work hand in hand” to present the Bahamas “in the most favourable light” possible, after Moody’s placed this nation’s credit rating on a two-month review. With the Bahamas facing a downgrade of its sovereign creditworthiness to possible ‘junk’ status by end-August, Mr Bowe acknowledged that the constant revisions to its GDP growth and fiscal numbers had done the country no favours. “All of the rating agencies are going to be cognisant that the fiscal balance and deficit have been projected out a further year from where it was,” he told Tribune Business. This newspaper last week revealed how the Government had pushed back the timeline for eliminating the GFS deficit by three full fiscal years to 2018-2019. It had originally projected that the ‘red ink’ would be over by the 2015-2016 fiscal year, but has been forced to revise these projections after it became apparent that the pace of consolidation was much slower than desired. See PG B10
Chamber chair urges unity on downgrade threat Calls for all political parties to work ‘hand in hand’
GOWON BOWE
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ness that while Customs did call a meeting to discuss the new and increased fines, it was unaware of their magnitude at that stage. And Mr Burrows that the C71 forms for couriers to fill out to obtain a licence from Customs “don’t exist yet”, and have not been signed off by Prime Minister Perry Christie. “I think it’s going to affect the docks more than anywhere else,” the Tropix proprietor told Tribune Business of the changes. “No one is going to put in a C10 for 25 per cent of the value. That needs to be amended right away. It needs to be done by Monday next week [today]. They should sit down and have a proper meeting, and understand the effect of them [charges.]. “You can’t put in charges See PG B9
tion. Moody’s move appears to have been sparked by Prime Minister Perry Christie’s affirmation of official Department of Statistics data showing that the Bahamian economy contracted by 1.7 per cent in 2014, following a 0.5 per cent shrink in 2014. This contrasted sharply with previous positive growth estimates by both the Government, itself and the International Monetary Fund (IMF), prompting Moody’s to determine that the Bahamas is “unlikely” to hit its 1.5 per cent GDP See PG B8
Moody’s spooked by negative growth revision Concern on increasing ‘debt accumulation’ And ‘effectiveness’ of government policy Nation faced possibility of two ‘junk’ cuts
Govt ‘oblivious’ to fiscal, economic woe By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net THE Democratic National Alliance’s (DNA) leader yesterday accused the Government of being “oblivious” to the Bahamas’ economic and fiscal woes, describing the latest downgrade threat as “scary stuff”. Branville McCartney warned of “daunting implications” should Moody’s carry out its threat to possibly cut the Bahamas’ sovereign creditworthiness to so-called ‘junk’ status by the end of August. Conceding that a rating downgrade was likely given the Bahamas’ current fundamentals, Mr McCartney told Tribune Business the situation would deter both foreign and local investors, who would feel there was “no light at the end of the tunnel” to See PG B4
Bran blasts ‘out of touch’ administration Turnquest: Moody’s action a ‘wake-up call’ Fears ‘devastating effects’ on Budget
BRANVILLE MCCARTNEY