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TUESDAY, OCTOBER 11, 2022
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‘Swimming against tide’ on $400k BPL bill hike By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net A LOCAL manufacturer is “swimming against the tide right now” with Bahamas Power & Light’s (BPL) fuel charge hikes set to increase its 2023 electricity bill by around $400,000 year-overyear to more than $1m. Walter Wells, president of Caribbean Bottling, the Coca-Cola producer, told Tribune Business “it’s like we’re getting hit on all sides” following the state-owned energy monopoly’s confirmation that its fuel charge - which typically accounts for 50-60 percent of customer bills - will increase by up to 163 percent next year compared to the current rate in order
• Coca-Cola supplier: “We’re being hit on all sides’ • Major resort to see $10m-plus energy cost surge • ‘Perfect storm’ for producers’ cost competitiveness to repay government subsidies and debts owed to its Shell fuel supplier. “The reality is the potential impact through the next 11 months to August is in the range of $400,000,” he disclosed of the effect on Caribbean Bottling’s electricity costs. While declining to give a figure for the company’s
total new power bill, he added: “It’s obvious that if that is what the increase is it will be over $1m. “It has a significant impact, and the ability we have to mitigate some of that.... we’re kind of swimming against the tide right now with the inflationary increases. The raw material imports are going up on an almost
daily basis. It’s like we’re getting hit on all sides. Every month it seems like something else is increasing.” Mr Wells said price competitiveness is critical for Bahamian manufacturers to fight-off rival imports that typically enjoy lower production costs. BPL’s fuel charge increases threaten to upset this delicate balance, and he explained: “What makes manufacturing work here is the Government gives us concessions to be competitive against imported goods. “If local inflation increases continue, it may make us uncompetitive against like import products. That’s the danger, and that’s the balancing act we try to manage on a daily basis. I can
Moody’s doubles down on ‘We will pay the price’ until ‘overly optimistic’ forecasts crime controlled By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net TOURISM leaders are warning The Bahamas “we will pay the price” unless rising crime is brought under control while branding last week’s downgrade by the US ROBERT SANDS as “a warning sign we must heed”. Robert Sands, the Bahamas Hotel and Tourism Association’s president, told Tribune Business this nation needs to focus on “the big picture” and realise that “everybody is a victim” of criminal activities - not just tourists, but Bahamians and residents as well as local businesses. Speaking after the US State Department last Wednesday issued a warning to all American travellers to “exercise increased caution in The Bahamas due to crime”, he urged the entire society to work together and “get crime under control as quickly as possible”. “We cannot put a price tag on correcting this. It has to be corrected otherwise we will pay the price,” Mr Sands told this newspaper following the surge in murders and other violent crimes that appears to have sparked the US downgrade. “We need to be thinking big picture and working collectively to get this under control very quickly. “The US has a four-tier advisory level. We came out of the top tier, and are now in the second tier. It’s a warning signal, and we must act quickly, positively and strategically in putting in place recommendations and solutions to help all
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By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net
MOODY’S has doubled down on concerns that the Government’s Budget revenue forecasts are “overly optimistic” and that its debt servicing payments will be higher than projected due to the rise in global interest rates The credit rating agency, fresh from downgrading The Bahamas deeper into so-called ‘junk’ status over concerns the Government may be unable to access the debt financing it requires, also suggested that the Davis administration’s plans to restrain public spending “will weigh on growth” and thus slowdown economic expansion. Issuing its latest ‘credit opinion’ on The Bahamas just one day after cutting the country’s credit
rating ‘B1’ from ‘Ba3’, Moody’s reiterated previous concerns and misgivings voiced over the Government’s 2022-2023 Budget projections by suggesting “additional revenue measures” - coded language for new and/or increased taxes - may well be needed to hit its goal of eliminating the annual fiscal deficit by 2024-2025. “The economic recovery is a key driver of fiscal consolidation in fiscal 2023. A continued uptick in tourism inflows will drive the recovery at the same time as construction and foreign-led investment projects ramp up. These factors, in addition to increased tax collection supported by the reintroduced Revenue Enhancement Unit, underpin the Government’s expectation that recurrent revenue
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BAMSI’s $7m investment targets 30% import slash By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net THE BAHAMAS Agriculture and Marine Science Institute (BAMSI) is aiming to invest $7m in a series of “greenhouse parks” designed to cut imports of vegetable staples by 30 percent. Senator Tyrel Young, the Institute’s executive chairman, told Tribune Business the investment is a key element in efforts to “plant the seeds” for the revival of Bahamian agriculture by facilitating and empowering local farmers via the
provision of technology and raw materials. Explaining that BAMSI was targeting “the low hanging fruit”, in terms of focusing on market niches where Bahamian farmers can oust imports and seize significant market share, he added that besides vegetable crops it is also focused on driving this nation to full self-sufficiency in egg production by 2025. Although local producers presently have “less than 1 percent” share of the Bahamian egg market, Senator Young described the neartotal reversal of this position as
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only sell what I produce if it’s less expensive than it costs someone to go to Florida, bring it in and pay import duties on. That’s the balancing act I face on a daily basis.” Bahamian resorts, supermarkets, wholesalers/distributors and manufacturers are likely to be the industries hardest hit by the fuel charge increases unveiled by BPL last week. The magnitude of the increases, which the Government is hoping will be relatively shortterm and confined to a 12-13 month period, will leave most if not all businesses in a position where the rise in costs has to be passed on to consumers, with staff
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BPL fuel hikes ‘slap in face’ for Family Islands By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net FAMILY Island Chamber of Commerce heads have branded Bahamas Power & Light’s (BPL) fuel charge hikes “a slap in the face” as they now have to pay more for unreliable electricity supplies that frequently suffer outages. Daphne Degregory-Miaoulis, Abaco’s
Chamber of Commerce president, told Tribune Business that increases of up to 163 percent compared to the present 10.5 cents per kilowatt (kWh) rate “add insult to injury” when some 30 percent of the island’s homeowners cannot connect to BPL because their post-Dorian properties are not deemed sufficiently worthy to have power restored.
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