Budget for BEC's Abaco plant balloons by $20m
By INDERIA SAUNDERS ~ Guardian Business Reporter ~ Inderia@nasguard.com:
The government appears to have revised upward by $20m its budget for a new BEC plant in Abaco, with the minister responsible yesterday confirming the projected price tag stands at $90m.
According to State Minister for Utilities Phenton Neymour, the money would come out of the $211m loan for the Bahamas Electricity Corporation tabled in the House of Assembly last week.
"We're building (the) facility in Abaco for approximately $90m," said Neymour, a guest speaker at the Chamber of Commerce's annual Meet the Ministers forum. "We expect to be finished with that in January."
Also included in the loan funds was a $30m new plant in Hatchet Bay, Eleuthera, as well as a Bimini plant expansion and takeover of Inagua's plant.
Yesterday's announcement of a bump-up in costs for the Abaco plant reflects a $20m difference in price from Neymour's earlier estimations.
As late as February 2009, he told Guardian Business that the government's focus was now on building that $70 million new plant meant to meet the expanding needs of the Abacos, the country's third center of commerce and site of an increasing number of resorts.
He also confirmed the Marubeni group of Tokyo has expressed interest in purchasing BEC's Abaco plant once its replacement was erected, at the same time dismissing reports a sale is, in fact, in the works.
"Marubeni has visited Abaco, to my knowledge, with a team from the (Bahamas Electricity Corporation)," he said then, speaking to source reports that, that company sharing a majority stake in Grand Bahama Power is looking to expand its presence in this market with the acquisition. "As you know, Abaco has had some challenges particularly in 2006/2007 where we had to supplement the current operation significantly, but [a sale of the old plant] has not been determined and has not been confirmed."
Given that Abaco had a growing economy, the island is attractive to power generators looking to grow their business outside of their own home markets. Taking over the existing BEC plant would allow a private entity to win some of the islands' resort business, given developers while keen to establish their own water treatment plants have generally resisted constructing their own power plants. Neymour asserted in an earlier interview that government was seriously considering a review of the original BEC Abaco contract for the plant to make an allowance for private sector participation in the new facility.
"We have had a preliminary view and preliminary look at how private sector participation could assist in improving operations in Abaco at the new plant," said Neymour. "We haven't determined the structure of such an agreement at this time.
"But we feel that it may be in great benefit to BEC to have it reviewed as to whether we can have private sector participation in operating that facility."
~Your Abaco Real Estate Agent
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