Pinder: Privatization efforts not driven by WTO
Guardian Business Reporter
Published: Oct 10, 2013
As the government moves towards accession to the World Trade Organization (WTO), Minister of Financial Services Ryan Pinder said there is nothing to suggest in those discussions that The Bahamas must privatize all of its utility companies.
Pinder stressed to Guardian Business that the government’s request for proposal (RFP) for companies to take over the Bahamas Electricity Corporation (BEC) functions has no bearing on those discussions.
“There’s nothing that would suggest that would be a necessity. The measures undertaken through what we are seeking through an RFP for BEC have nothing to do with the WTO. It’s being undertaken to create greater efficiencies to lower the cost of electricity to Bahamian consumers and local producers,” Pinder said.
“For manufacturers, if you lower the cost of electricity for them, [and if] you provide certain institutional standards and frameworks that mean people have to compete on a level playing field, then protective tariffs may not be necessary because the cost of producing would go down significantly.
“If you are able to reduce the cost of electricity by 20 percent for producers, that’s a significant drop in what it costs them to do business.”
On August 13, Prime Minister Perry Christie committed to major reforms of the country’s energy sector with a view to decreasing the cost of electricity to consumers.
He announced that after a period of around two years, in which it had received a significant number of proposals and expressions of interest from private companies to provide the means to reduce the cost of electricity in The Bahamas, the government would be issuing a new and more tightly defined RFP to govern the process.
The plan is now to seek the division of the Bahamas Electricity Corporation (BEC) into two entities – one which would conduct power generation and another which would be responsible for transmission, distribution, maintenance of equipment and customer billing.
In April 2011, the Bahamas Telecommunications Company (BTC) was privatized after the Free National Movement (FNM) administration sold 51 percent of the company to Cable & Wireless Communications (CWC).
Meantime, Glen Laville, general manager at the Water and Sewerage Corporation (WSC), recently told Guardian Business that privatization can take many forms and the formats at BTC and BEC are not necessarily applicable to WSC.
“Outsourcing is considered by some to be a form of privatization. WSC currently outsources certain activities and may expand this in the future,” he said.
“The activities and initiatives undertaken by WSC is targeted towards financial and operational sustainability/viability/efficiency, so that we can improve service to our customers and decrease reliability on government subsidies.”