Former Minister of Finance Peter Turnquest said last week during a radio interview that the current administration’s disposal of the Bahamas Power and Light (BPL) rate reduction bond (RRB) is a tragedy, revealing that when there were previous attempts to float the bond alongside the government’s own bond, there was no appetite in the financial markets to receive both.
Last week, Minister of Economic Affairs Michael Halkitis said the RRB, which the former administration hoped to have placed by the end of this year, is dead in the water. His comments came after Prime Minister Philip Brave Davis revealed during his supplementary budget presentation that the administration viewed the bond as bad for the Bahamian people, contending that it would have the effect of raising electricity bills by as much as 20 percent.
Davis said during that budget speech that the issue of placing a bond to eradicate BPL’s old debt obligations and finance capital works projects at the power company, has dragged on too long.
Turnquest, who made his remarks while a guest on Morning Blend Business on Guardian Radio, agreed that the bond issue took too long to materialize, given the work that needs to be done to improve power distribution in the country.
“They are correct. This matter has dragged on for way, way, way too long,” Turnquest said.
“It never seems to be the right time to launch that bond. Everybody is trying to get the best bond rate possible.
“We have to recognize that market conditions determine what the bond is going to float at and you have to decide whether that rate is acceptable in the general scheme of things, or whether we’re going to continue to push this burden onto the central government, which has to find the revenue, which it only can find through borrowing or tax to fill the financing needs that BPL had and continues to have.”
Turnquest said true reform at BPL requires a lot of money for the upgrade of the transmission and distribution lines. He contended that even if the country switches to a more environmentally friendly fuel, like liquefied natural gas (LNG), the same problems experienced by BPL’s customers will persist.
“So, investment is needed. The only question is, considering everything that is available, where we get the money from and what rate are we going to pay.”
The post Turnquest: Rate reduction bond dragged on for way too long appeared first on The Nassau Guardian.
source https://thenassauguardian.com/turnquest-rate-reduction-bond-dragged-on-for-way-too-long/
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