BPL Surcharge and Government Misappropriation of Funds

Jul 21, 2023

Bahamian citizens are sadly now feeling the full effects of the government’s horrible decision not to execute the BPL fuel surcharges and hedge program as the electricity bills for BPL customers are spiking just in time for the hot summer months on the backs of massive increases in the BPL fuel surcharges.

The ONLY reason that your BPL bills are so high is because the PLP government ignored the advice of the then BPL Board and executives and made the decision not to execute the fuel hedges left in place by the FNM. Then the Davis administration in typical fashion refused to act to increase the surcharge when it became necessary causing BPL to run up a $110 million debt with its fuel suppliers.

And then as they continued to make a bad situation worse, this Davis Administration has lent BPL some $110 million at last count to pay for the massive fuel arrears owed by BPL to its providers. The government’s April 2023 published Public Debt Statistical Bulletin recorded loans to State Owned Enterprises in this amount. In May, the Ministry of Finance confirmed this as a loan to BPL (http://www.tribune242.com/news/2023/may/15/govts-support-bpl- jumps-110m/). The hapless Davis administration still has not provided the specific details as to how much of this spike in the fuel surcharge is due to fuel costs and how much is going to servicing the $110 million loan that the government gave to BPL. What portion of the surcharge is for payment of this government loan? What portion is the actual fuel cost? What are the interest rates and terms on this loan? What is the loan period?

And for the government, it gets even worse. This loan to BPL is an illegal loan and as such it represents a clear misappropriation of funds. We in the Opposition have brought up this point before and we do not make this allegation lightly. The Public Debt Management Act in Section 38 (2) states that all loans by the government to any person or entity must come from approved appropriations from Parliament. In none of its statements or reports has the government listed the outlays on this loan as part of the expenditures from approved Parliamentary appropriations. This makes the BPL loan transaction illegal and a misappropriation of public funds until the government brings the appropriate supplementary appropriations bill to cover this expenditure outlay.

We are compelled to point out as well that this unrecorded expenditure also means that the budget deficit numbers presented by the Prime Minister are understated by this same $110 million sum. Could that be the reason that they are not following the law so as to mislead on the size of the deficit?

The Davis Administration must at some point come to appreciate that as the government they have a core responsibility to follow and uphold the law. They remain serial lawbreakers and this chronic illegal behavior cannot persist.

 

Hon. Michael Pintard

Free National Movement, Leader

June 26, 2023

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