BUDGET CONTRIBUTION 2009-2010

BY THE

HON. PHENTON O. NEYMOUR

MINISTER OF STATE IN THE MINISTRY OF THE ENVIRONMENT

MEMBER OF PARLIAMENT FOR THE SOUTH BEACH CONSTITUENCY

WEDNESDAY, 4th MARCH, 2009

  Mr. Speaker, I take the floor giving homage to my beloved constituency and to the kings and queens of South Beach.

 Mr. Speaker, throughout the course of these troubling economic times, this administration has sought to convey to our nation the extent of the current global economic crisis and to bring into proper context the government’s outlook and plan of action.

 Mr. Speaker, in fact, in October of last year, the Right Honourable Prime Minister articulated to world leaders at the IMF/World Bank Meetings some of the challenges the Caribbean and our nation face in the wake of these global economic events.  Mr. Speaker, those institutions received a call to duty, while they decide how and when to react, we remain poised and responsive. Mr. Speaker, let it be clearly understood, this administration has responded and will act decisively and responsibly.

 Mr. Speaker, as a part of this very able team of practical and pragmatic Members of the Executive, I wish to apprise this Honourable House and all in Bahamaland of the efforts and activities which have occurred since 1st July, 2008, in those areas falling under my immediate portfolio.

 First, Mr. Speaker, please note that it is my intent to further elaborate and offer greater policy definition during the forth coming 2009/2010 Budget exercise.  Mr. Speaker, none the less this 6 month mid-year appraisal will undoubtedly illustrate the emergence of Corporations once rendered immobile and inoculated with misdirected political servitude, to become institutions which are now geared towards the tasks clearly established by their statutes.  Mr. Speaker, these organizations must be aligned to best practices, customer satisfaction, efficiency and efficacy.  Mr. Speaker, over the last 22 months, much has been achieved, but even more is left to be undertaken.

 Mr. Speaker, investments in our country’s infrastructure is not a luxury, it is an absolute necessity.  Any deferment or compromise will only exacerbate the physical plant and increase future costs.  Mr. Speaker, this administration will act expeditiously but (pause) with prudence.  This administration recognizes that there is an inherited calamity, and a global calamity.

 Mr. Speaker, notwithstanding, we shall and will bring calm and reprieve with measured interventions without placing our present and future at risk. 

 Mr. Speaker, I can assure this honourable House that not only shall the utility corporations survive these turbulent times but this administration will ensure that the corporations are placed on a path to thrive with sustainability and financial independence.  You see Mr. Speaker, when we talk of democracy and its principles we must also be minded to give consideration to economic democracy.

 Mr. Speaker, others may speak of democracy and embrace the ideals in their heads.  But is it truly economic democracy when a government, the expected gatekeepers of such ideals, steers a corporation once revered as a “cash cow” and submits that corporation to become a virtual “sitting duck.”  Mr. Speaker, this should never happen under the helm of a government that is expected to uphold the people’s democratic principles.  That is not democracy that is hypocrisy. And the members of the other side has demonstrated clearly that they are not stewards of accountability and transparency.  But prime proponents of hypocrisy. 

 Water and Sewerage Corporation

 Mr. Speaker, turning to the order of the day, I will first speak on the activities of the Water and Sewerage Corporation.  Mr. Speaker, at the outset, the goal of the WSC over the last 6 months and going forward is to concentrate on improving water quality and providing optimum service through mains replacements. Further reductions of non-revenue water through performance–based contracts as recently completed by the company who had built and are now operating the Baillou Hills desalination plant.

 Constraints

 Mr. Speaker, the WSC operates under several constraints, namely:

 The WSC is in a nearly perfect competitive environment because anyone can self-provide.  Costly infrastructure must be maintained and upgraded despite the small customer base.

 Funding is required for capital development, operations, pension funding and restructuring.  The fact is that the WSC cannot secure funding on its own.

 The WSC needs to undertake an examination to determine whether reverse osmosis can be utilized as a strategic operational direction, being cognizant of high fixed costs.

 The WSC needs to examine tariff adjustments, noting that the Corporation has not had an adjustment since 1999 being cognizant of current economic realities.

The WSC needs to be enabled such that the Corporation can execute a properly funded strategic plan and meet deliverables.

 Mr. Speaker, I turn to

Watermains

 Since June of 2008, extensive watermains replacement works were completed in New Providence and include the following installations:

 

• Eastern Road (Adams St to Fox Hill),
• Fox Hill (Joe Farrington to Eastern Road),
• Hanna Road,
• Sixth Terrace (Collins to Mt. Royal Avenue),
• Perpall’s Tract Subdivision,
• And other miscellaneous jobs.

 Mr. Speaker, in total the above noted works accounted for approximately six (6) miles of new mains amounting to an approximate total cost of some $ 2.1M. 

Mr. Speaker, other works on the island of New Providence included the following:

• The installation of a New Sewerage Collection System for part of Arawak Cay Fish-Fry.
• The installation of the Misty Gardens sub-division sewer force mains;
• The upgrade of Offices/Facilities to improve working conditions; and
• The design Plans for watermains upgrade for Bay and Shirley Streets;

Mr. Speaker, the estimated cost of these works to date is $ 1.1M. 

 Proposed Future Works

 Mr. Speaker, there are a number capital work projects that the WSC intends to coordinate with the Ministry of Works & Transport as part of the New Providence Road Improvement Project.  Mr. Speaker, it is estimated that these associated works would entail costs in the order of $10 million dollars, although some details of these required works are still in preparation. 

 Mr. Speaker, it should also be noted that there are some sewer replacement works that are required on Market Street and Cumberland Street, which will not be executed by the international road contractor in order to allow local contractors to be integrated in the infrastructural improvements.  Mr. Speaker, bids are being processed and the projected cost of these works will cost approximately $350,000.  These works will need to be completed before June 2009 before the road contractor commences the work on these two corridors later this year.

 Family Islands Watermains

 Mr. Speaker, since June 2008, works completed in the Family Islands include watermain installations in the following settlements:

• Upper and Lower Bogue, Eleuthera;
• North Palmetto Point, Eleuthera;
• Extensions in the Current Settlement, Eleuthera;
• Commencement of the installation of new mains to serve existing residents and the Ministry of Housing homes in Spring City, Abaco.

Mr. Speaker, the estimate of costs for these projects is approximately $0.7M.

 Other Works

 Mr. Speaker, other important works undertaken by the WSC during this fiscal period included:

• The commissioning of new water supply systems for Snug Corner/Masons Bay and Salina Point, Acklins;
• The commissioning of the new South Cat Island water depot and commencement of works on the North Cat Island water depot; 
• The refurbishment of the Harbour Island storage tank;
• Substantial completion of the Sandy Point, Abaco pumping station; 
• The opening of a new office in Georgetown, Exuma;
• The installation of new storage tanks for Pirates Well/Betsy Bay, Mayaguana;
• The award of an Engineering Services Contract for the Green Turtle Cay water supply project and substantial progress on the engineering works.  Detailed designs of the Phase 1- Underwater Main has been completed and should be sent out to bid during the month of March, and work on the ground is anticipated to commence in early June.  The completion date for the full project is anticipated to be in the last quarter of 2009. 
• Additionally, contracts have been awarded for new mains and the desalinated plant on Current Island, Eleuthera.  Pipe-laying is being coordinated by the WSC staff using local labour.  The procurement of goods has been completed and they are now on site.  Physical works has commenced on the ground.
• The Contract to install new watermains on Windermere Island has been awarded.  This work is being carried out in conjunction with the Developer and Homeowners Association.  Works on Phase 1 commenced in December 2008.  Procurement of materials for Phase 2 is underway and materials should have a delivery period of 8 weeks with a June 2009 completion date, and
• A new office site has been selected in Spanish Wells, Eleuthera, and the target opening date is set for mid-March 2009.

Mr. Speaker, in total, these projects have a combined cost of $6.1M.

 Mr. Speaker, as part of our objective to improve Family Island infrastructure, a Family Island Capital Works Development Plan is now in preparation.  The ultimate purpose of the development plan is to ensure that all island communities have access to reliable, safe and affordable water supplies by the year 2020.

 Mr. Speaker, I turn to

Customer Service

 In July 2008, the WSC launched its Call Centre.  This facility is based in the Head Office building on Thompson Boulevard and it enables customers to have immediate access to staff who can assist with complaints, provide account information, and provide any other information that members of the public might wish to obtain from the Corporation. Mr. Speaker, the Call Centre’s number is 302-5599, and Mr. Speaker, Family Island customers can call a toll free number 1-300-0150.

 Mr. Speaker, Other customer service initiatives include:

The reintroduction of the Phone Notification System (PNS),

Email services allowing customers to request account information and other services at the corporation’s email addresses wscomplaints@wsc.com.bs, or CallCentre@wsc.com.bs,

Another initiative is that of Saturday bill payment services at Marathon Mall, including a second window at BTC’s offices in Marathon Mall, and a general reorganization of the Accounts Receivable Section for improved management of the section.

 Reverse Osmosis Water

 Mr. Speaker, I will now apprise members of some aspects of the WSC’s strategic plan to provide water to the Bahamian public.  I will begin by stating categorically that the Corporation’s policy is to utilize groundwater supplies wherever they are available in sufficient quantity and adequate quality to meet potable water needs – that is water fit for human consumption.  Mr. Speaker, unfortunately, most islands in The Bahamas do not have sufficient freshwater to meet growing local demand.  Only Andros, Abaco and Grand Bahama can totally hold their own, for the moment, in terms of sustainable groundwater resources. Mr. Speaker, the Corporation has, therefore, been forced to look to a highly reliable, widely used alternative technology called reverse osmosis.

 Mr. Speaker, there are currently 22 reverse osmosis plants within the scope of the Water and Sewerage Corporation’s operations, and another one in Current Island is expected to be operational in the third quarter of 2009.  All of these plants are privately owned, and each sells water to the Corporation under 10 to 20 year contracts.  Mr. Speaker, I intend to come back to these important points in a moment.  But first Mr. Speaker, I will now table copies of the 2008 Summary of Desalination Costs Purchase Price vs Selling Price, for members of this House to view as promised by the Prime Minister.

 The largest plants are in New Providence, where a total of 7 million imperial gallons (IG’s) is produced daily from two locations, that is Windsor Fields and Baillou Hills.  I’ll detail just a few of the other major ones in the Family Islands.  Eleuthera has two plants that together provide 475,000 IG’s daily at Waterford and the Naval Base.  A third small plant should be operational on Current Island by the third quarter of 2009 as stated earlier.  Then Exuma has five plants at Georgetown, Emerald Bay, Staniel Cay, Black Point and Farmers Cay that together provide over 385,000 IG’s daily with the largest, of course, at Georgetown.  Next is Bimini with two plants that provide around 160,000 IG’s daily.  One plant each on San Salvador and Long Island, provide around 100,000 IG’s daily, and finally a number of small plants serve Inagua, Acklins, Sweeting’s Cay, Long Cay and Ragged Island.

 And now Mr. Speaker, I’ll return to the matter of how much the Corporation pays for water that it buys to resell to the public.  When I look at the list of reverse osmosis plants from which the Corporation purchases water, the single most striking component is the variation in the price of water that the Corporation purchase versus its selling price.  In New Providence, the purchase price of water now averages $7.33 per KIGs inclusive of energy costs.  In the Family Islands, the purchase price ranges from a low price of $8 per KIGs all the way to $ 39 per KIGs.  Yes, I did say $39!  In fact, water purchased from 10 plants (soon 11 with Current Island) costs over $25 per KIGs.  Now I’ll admit that the highest prices apply to the smallest plants because the companies do not have the benefit of economies of scale to allow a suitable market rate of return on their investment.  Mr. Speaker, not withstanding, even the largest Family Island plants are selling water to the Corporation at $8 to $18 per KIGs.

 The real irony though, Mr. Speaker, is that in the Family Islands, the Corporation in turn sells this higher priced water to the public – be they rich, poor, household or business – at a price as low as $3.45 per thousand dollars and on average around $8 per thousand dollars.  Mr. Speaker, this price was set back in 1999, long before high quality and much more expensive reverse osmosis water was brought into the picture.  Meanwhile, Mr. Speaker, the Corporation is losing over $2.2 Million annually for what it pays just to buy the water versus what it bills customers for that water, and by the time one factors or add in the cost of building and maintaining infrastructure to deliver this water to the public, the cost of paying staff, maintaining offices, reading meters, producing bills, the Government is left holding the bag for the balance.

 In New Providence, Mr. Speaker, I will repeat that reverse osmosis is the best and most reliable solution available at this time.  These plants have been built to withstand hurricanes, have full standby power capabilities, are less vulnerable to storm surges and flooding, and can operate when other alternatives such as barging are brought to a standstill.  However, Mr. Speaker, it is also a fact that high energy costs are adversely impacting production costs.  For example, the average energy cost per thousand gallons of reverse osmosis water purchased in New Providence from January to September 2008 was around $3.72 per thousand gallons.  To put that in another perspective, a comparison of energy costs per thousand gallons in July 2004 was $1.28.  This demonstrated an overall increase of $2.44 per thousand gallons or 290% over four years.  

 To further compound this situation Mr. Speaker, and this will not be news to any of us here, the Corporation is losing approximately 54% of the water that it purchases for New Providence, primarily because of old, leaky pipes, and to a lesser extent pilferage. 

 Mr. Speaker, it is the worst kind of travesty, that in New Providence the Corporation buys twice as much water as it sells each day, which effectively doubles the amount it pays for this high quality water, which increases pumping costs because one has to pump twice as much water throughout the island, and if one looks at it from the revenue side, it halves the amount of money the Corporation could potentially earn from selling the same amount of water!  So Mr. Speaker, instead of the Corporation making a reasonable return on water that it purchases at $7.33 per KIG, it is actually losing money when it sells at $15.48 per KIG because, when taking into account losses due to non-revenue water (leaks), and other operating and administrative costs, the cost of water delivered and billed to customers it is actually costing the corporation around $17.86 to purchase the water.  This produces a loss of approximately $2.38 per thousands gallons.  In other words, Mr. Speaker, the more water we produce, the more money we lose.  With increasing development creating increasing demand, we are faced with an expanding burden that is growing exponentially.  Again Mr. Speaker, these losses translate very directly into a cost to the Public Treasury and tax payers throughout this country.  The only solution to this problem, and one that this Government recognizes, is to make substantial investments to replace old infrastructure and restructuring the organization. 

 Mr. Speaker, the contracts for reverse osmosis are long term and most have approximately 10 years to termination.  These commitments will bind the Corporation for the long haul, Sir, and place further constraints on its future development.  All of these contracts also have built-in increases to account for higher prices that the plant operator will encounter.  Mr. Speaker, this is particularly important for the suppliers and makes it hard on the Corporation in these times of rising prices.  In fact, the combined effect of increased reliance on reverse osmosis water throughout the Bahamas has resulted in a $22.5 Million increase in water purchases over the six-year period 2002 to 2008, of which there was an astounding $5 Million increase from 2006 to 2007 alone when the Baillou Hills plant was commissioned.   Meanwhile, Mr. Speaker, the Corporation is operating on rates set 9 years ago.  This inequity will have to be addressed and the Corporation will have to be placed on a sound business footing in short order, otherwise the burden on Government will only increase with each additional plant and each additional gallon of water that the Corporation undertakes to buy and provide to our communities at such enormous losses.

 Mr. Speaker, I now turn to the

WSC Financial Position 

 Mr. Speaker, construction activity throughout the Bahamas has been strong in this decade.  Certainly in New Providence, houses, apartment complexes and commercial buildings have sprung up everywhere.  One might expect that this strong construction activity would translate into equally strong revenue growth for the Corporation; after all, every building needs water.  Unfortunately, Mr. Speaker, the Corporation’s revenue base has shown only modest annual growth because so many people still put in a well instead of using services provided by the Water and Sewerage Corporation. 

 Mr. Speaker, revenues have grown slowly but in contrast, the cost to produce water for sale has increased tremendously as more communities receive high quality reverse osmosis water.  For example, in 2004, water sales were $31.1 Million and reverse osmosis water purchases were $6.0 Million or 19% of revenues.  Over the subsequent 4 years from 2005 to 2008, cumulative increases in water sales totaled $22.7 Million, but the cumulative increase in water purchases over the same period was $41.5 Million. 

 Today Mr. Speaker, the cost of water purchases represents over 57% of water revenues as compared to 19% in 2004, as previously stated. That does not leave nearly enough revenues to cover all of the other costs associated with distributing water, performing maintenance, and replacing or extending water mains.  Mr. Speaker, this is the major reason why the Corporation’s subsidy needs have soared.  The Corporation was allocated $19M in the 2008/09 budget and this has been entirely exhausted.  In the final analysis, $15,028,190 or 79% of the total $19 Million was applied to water purchases alone. 

 Mr. Speaker, having established that water revenues do not cover costs, there is another problem: collecting that which is billed.  In the past, cash from revenue collections have covered approximately 70% of operating costs, but in these challenging economic times, collections continue to weaken at an accelerating rate as more customers struggle to pay their bills. In fact, Mr. Speaker, January 2009 collections in New Providence were nearly $500,000 or 15% below the average for 2008 and indications are that February 2009 was worse.  Mr. Speaker, with decreasing revenue collections and high fixed costs, particularly with respect to staffing and water purchases, the Corporation’s cash flow position is deteriorating at an accelerating rate.  Mr. Speaker, this is negatively impacting its ability to pay bills on time.  

 Mr. Speaker, latest estimates are that over $12.7 Mn was owed to suppliers as at December 31, 2008 and most of this was payable to two reverse osmosis water suppliers, namely Consolidated Water that was owed approximately $8.1 Mn, and Aqua Design to which approximately $940,000 was owed.  Other trade payables totaled nearly $3.5 Mn.  Mr. Speaker, obviously, the bulk of the $11 Mn of additional funds that has been allocated to the Corporation will have to be applied to addressing some of these accumulated bills, but some will have to be set aside for future commitments, including loan payments.  Mr. Speaker, make no mistake: going forward to the next fiscal year, and given the high fixed costs, prior reliance on subsidies, and slowing collections, the Corporation will still be carrying significant arrears and more funding will be required to reduce these arrears and meet the rising shortfall in operating cash flows.

 Mr. Speaker, an organization that is struggling to pay bills cannot set aside money for investments, nor maintain or expand its equipment.  There are over 80 miles of mains that need to be replaced to improve water quality.  Mr. Speaker, this has increased operational costs for flushing mains, changing filters, giving rebates and general customer frustration.  Furthermore, Mr. Speaker, as previously stated, non-revenue water comprising of leaks and theft are about 54% in New Providence which effectively doubles water production costs.  Mr. Speaker, again I say major investment and restructuring is needed.

 Mr. Speaker, the sewerage infrastructure in certain areas is in equally poor condition.  The Corporation would wish to focus on replacing old sewerage infrastructure, particularly concrete sewer laid as far back as the 1920s, and to refurbish and expand all wastewater treatment plants which have exceeded their capacity.

 The Inter-American Development Bank

 Mr. Speaker, in an effort to reverse this steep downward trend faced by the WSC the Government has acquired assistance from the Inter-American Development Bank (IDB) under the Water and Sanitation Initiative, to assist the Bahamas in the preparation of a Water and Sanitation Sector Plan (WSSP), and the WSC has requested that this assistance include a tariff study, updating the Corporation’s financial modeling,  and preparing a Corporate Business Plan.  Mr. Speaker, the IDB is also assisting with the development of an appropriate Legal and Regulatory Framework for the sector.  This assistance is being funded by non-refundable grants under the IDB’s AquaFund and the INWAP fund respectively.  The consulting firm Castalia Strategic Advisors is already in place working on the Water and Sanitation Sector Plan and has presented to the Ministry a draft plan that suggests an aggressive approach is taken.

 Mr. Speaker, in addition, there is a regional initiative under the IDB which is aimed at providing technical cooperation for improved Energy Efficiency in the water and sanitation sector.  The Bahamas is one of seven countries that will benefit from this technical cooperation.

 BEC

 Mr. Speaker, I now turn to BEC.  The present financial state of the corporation is of grave concern.  The losses for the year ending September 30, 2008 were some $21 million, and the projected loss for the year ending September 30, 2009 is some $1.5 million.  Taking into account the present commitments of the corporation, inclusive of the large amount of capital projects that are underway, the current revenue is insufficient for the corporation to meet its financial obligations.

 The present financial condition of the corporation is due to a number of factors inclusive of:

 

• The rate reduction and payment of interest on deposit in 2003 – on average, taking into consideration interest cost, this is some $20 million per annum reduction in revenues ($100 million over 5 years) thereby significantly reducing cash flow.
• Refinancing of the IDB Loan, under the previous administration, where the corporation obtained short-term loans and paid off the long term loan with the IDB (basket of currency).  This resulted in increased costs, reduced cash flow and other financial concerns.
• Increased expenses – which included union increases.  There were two contracts with the Bahamas Electrical Workers Union signed since 2003 significantly increasing the cost of labour and increasing pension costs resulting  in an additional $27 million cumulatively for the period 2003 to 2007 and an additional $17 million cumulatively for the period 2007 to 2012.
• The high cost of oil and resulting increase in Customs Duty (prior to the relief provided by the Government) – also included are higher costs with the change in the fuel oil contract.  Mr. Speaker, the effects of increased cost of oil on the international market had adversely impacted profitability and cash flow.  Additionally, it placed increased burdens on customers who in some instances either were not able to and/or discontinued making payment, or made reduced payments, thereby negatively impacting collections.  Mr. Speaker, BEC has also been faced with a cost of acquiring fuel inventories held at Clifton Pier that was previous held by the fuel supplier as it was necessary for the renewal of the fuel oil contract.  As a result of the huge cost of carrying significant inventories due to the volatility of oil prices the supplier was not prepared to hold inventories as was done in the past.  Mr. Speaker, it should also be noted that there was great reluctance by the various oil companies to supply the Family Islands due to large shipping costs, environmental risk, liability, large volumes, and scheduling requirements.
• The capital projects (inclusive of the Family Island Projects) that are presently underway and which are not presently being subsidized or financed by government; in other words being financed directly by the corporation, and
• Increased Accounts Receivables.

 

Mr. Speaker, the government has provided the corporation with a two year relief on Customs Duty and Stamp Tax effective July 2008.  The savings to date on Customs Duty has amounted to approximately $11.326 million and the savings on Stamp Tax is approximately $7.928 million.  This, primarily accounts for the lower projected losses for the year ending September 30, 2009.

 Mr. Speaker, the Accounts and Finance Division has been reviewed by an external consultancy firm and the division is being strengthened.  Additionally, an operational review of the corporation will be carried out.  Mr. Speaker, energy conservation is also being emphasized via the newspapers, radio, television, churches, social groups and workshops.

 Mr. Speaker, it should also be noted that a Tariff Review was carried out by PA Consulting on behalf of the corporation.  The review recommended rate increases so as to reduce the losses being experienced by the corporation.  A Tariff Adjustment and restructuring is fundamental to the sustainability of BEC which will allow the corporation to once again be in a position to “stand alone” without government guarantee.  Mr. Speaker, it is intended that the Government will evaluate all recommendations and options, such that implementation will be properly sequenced and reflective of the country’s economic and social circumstances.

 Mr. Speaker, with regards to Renewable Energy, requests for proposals were issued by the corporation and 13 of 28 firms shortlisted.  The technologies include Waste to Energy, Wind, Solar and Ocean Thermal Energy Conversion. The corporation has subsequently invited Engineering Consultancy Firms to submit bids for engineering services associated with the second phase of the Renewable Energy Program.

Mr. Speaker, in regards to other activities at BEC:

 The Bahamas Electricity Corporation’s pilot street lighting project with the testing of High Efficiency Streetlights and LED Streetlights is presently underway. 

 The pilot project is to identify and confirm which type of energy efficient street lights will be best suited to replace the traditional streetlights now being used; whether we will use High Energy Efficient bulbs or LEDs.  Mr. Speaker, the cost of the replacement bulbs will require considerable capital as the bulbs are much more expensive than those presently being used, but the electricity consumption will be significantly reduced.  Mr. Speaker, the long term objective is to provide street-lighting in the most cost effective manner while reducing electricity usage and hence fossil fuel usage thereby providing an overall savings to BEC and to the country.

 Mr. Speaker, BEC also intends to implement a Fuel Facilities Management & Handling initiative, of which the scope of works include proper metering of fuel, monitoring and management of fuel at all sites and of shipment facilities, safety and environmental concerns, adequacy of tanks storage and pumping.  Mr. Speaker, the overall goal is to ensure compliance, reduce potential for mismanagement, theft, spillage and operational losses, etc. 

 Mr. Speaker, we must be reminded that the cost of fuel is BEC largest expense and we believe that considerable cost savings can be found in this area.  Mr. Speaker, I wish to point out that BEC’s unaudited fuel costs for the fiscal year ending September 30, 2008, was approximately $350 million.

 Mr. Speaker, provision of electrical supplies to the property boundaries for major development projects has taken place for a number of years.  During this fiscal period, cables were laid to Paradise Island, costing between $3.5 to 4 million, and a submarine cable to Rose Island, costing approximately $700,000.00.

 Reconnection of Disconnected Customers

 Mr. Speaker, as part of the Government’s relief package, of the 5,000 customers that were disconnected prior to the availability of the package, some 4,000 plus customers were reconnected as a result of the government’s directive/relief efforts.  The balance were primarily either inactive accounts or no longer existed.

 Mr. Speaker, with regards to the cap of fuel surcharge for residential customers using 800 kWh or less for the period Oct 2008 to December 2008, the savings to customers was $3,648,783.63. Government’s advance/loan which covered this expense to BEC was $4 million.

 I turn to the

National Energy Policy

 Mr. Speaker, the government has accepted the National Energy Policy and Implementation Plan as detailed in the First Report of the National Energy Policy Committee (November 2008).

 Mr. Speaker, in order to advance the National Energy Policy and its proposed implementation plan, input from the Ministries and the various Departments, Agencies and Corporations of the Bahamas Government is being sought.  The BEST Commission of the Ministry of the Environment is now in the process of soliciting that input. 

 Mr. Speaker, the NEP has an implementation plan that focuses on several things; filling gaps through two IDB Technical Assistance Grants, one focuses on the efforts of BEC to integrate renewable energy technologies into its energy mix, while the other focuses on filling the data gaps and assessing the various technologies that can be implemented in the Bahamas.

 Mr. Speaker, we are also exploring funding opportunities to advance energy conservation at the residential level through an incandescent light-bulb replacement programme.  This effort builds upon the Customs duty reductions introduced in the last budget.

 Mr. Speaker, other opportunities also exist for energy efficiency improvements in large industrial motors as well as in residential home construction.  We have started the process of looking at these options and the opportunities through technical assistance of grant funding to fast track its implementation.

 Mr. Speaker, we have what we believe is a firm foundation for a National Energy Policy, which also addresses matters of Energy Security especially during periods of fuel/oil price volatility.  We have initiated the consultation process for its implementation and have started work on the ground, and BEC is moving towards a more sustainable mix of energy sources.

 Mr. Speaker, given the multitude of activities and programmes that remain before us to complete,  I submit to this honourable House that the sum of 11 million identified in the supplementary appropriations for the Water & Sewerage Corporation shall be utilized for optimum effect and for the ultimate benefit of all in Bahamaland.

 Mr. Speaker, the welfare of our people is the highest priority; our commitment is never more bearing or intense.  This administration will not falter nor shall we rest on our laurels for a trickle down or for others to take the lead.

 Mr. Speaker, the people of South Beach and The Bahamas have mandated this government to protect and serve.  My eyes are fixed on the horizon and this humble servant rejects the distractions of small minded politics that opposes for the sake of opposition.  Those antics cannot defeat pragmatism and responsible governance, nor can they heat me.

 Mr. Speaker, in closing, in the very surreal words of Muhammad Ali,

 “It isn’t the mountains ahead to climb that may wear you out; it may be the pebble in your shoe”

 Mr. Speaker these corporations must be set on a path to scale those mountains.  Collectively every one in this honourable House has the responsibility to the Bahamian people.  So I implore all my parliamentary colleagues who have the honour to sit in this place to not be a “pebble.”

 Mr. Speaker, the honourable Member for South Beach rests.