WEDNESDAY, JUNE 22, 2016
business@tribunemedia.net
Super Value off target ‘no matter what we do’ By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net
Missing 5% sales growth by 2-2.5% pts
SUPER Value’s owner yesterday blamed the struggling Bahamian economy for its failure to hit a 5 per cent sales growth target “no matter how hard we try”. Rupert Roberts told Tribune Business that the supermarket chain was “not realising our projected goals”, and was around 2-2.5 percentage points behind target year-to-date. Anticipating the traditional summer slowdown, as residents went on vacation and stopover tourist arrivals reduced, Mr Roberts said the 10-store chain, and its three Quality Supermarkets stores, had benefited from a 37 per cent drop in energy
Blames economy, but aided by 37% energy cost fall Roberts brands new BPL manager ‘Power Unsure’ costs. This, though, was now being offset by Bahamas Power & Light’s (BPL) supply reliability issues, which were knocking out and burning through electrical equipment in the company’s
RUPERT ROBERTS warehouse and stores. Branding BPL’s new manager as ‘Power Unsure’, a play on PowerSecure, Mr Roberts expressed disappointment in its performance to-date, adding that he thought load shedding
was “a thing of the past.” “The economy’s slow and it’s going to probably be a slow summer,” the Super Value president told Tribune Business. “We don’t see anything on the horizon to hang our hats on to say there may be some better days ahead. “I think the economy will slow more and more as we get into the summer. That’s an annual thing. We’re not realising our projected goals, and are falling a little behind.” Mr Roberts said that Super Value was fortunate in that food and drink, its core business, was an essential or ‘necessity’ commodity, adding that smaller food stores were feeling the moribund economy’s impact more. See PG B2
Opposition slams $20m BPL to raise $100m mortgage relief ‘farce’ in fiscal 2017-2018 By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net OPPOSITION politicians yesterday slammed the latest Mortgage Relief Plan (MRP)as “a farce”, and questioned why the Bahamian people were giving the banks a $20 million subsidy for activities they already financed themselves. K P Turnquest, the FNM’s deputy leader, told Tribune Business that the second version of the scheme appeared designed to enable the Christie administration to “take credit for what the banks already do”. Questioning why the Government was giving Bahamas-based commercial banks, some of the wealthiest businesses in this nation, a $20 million ‘asset recovery’ subsidy from the taxpayer, Mr Turnquest said the ‘new MRP’ failed to address the “root causes” of the mortgage crisis. Mr Turnquest’s assessment was backed by Branville McCartney, the Democratic National Alliance’s (DNA) leader, who said the $20 million allocated by the Government was tantamount to a subsidy of commercial bank credit collections departments. See PG B4
Say taxpayer subsidising banks’ existing activities Not all commercial banks signed up to plan But RBC appoints Mortgage Relief Plan manager
KP TURNQUEST
Mortgage plan failing to tackle ‘root cause’ By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net THE Government’s revised Mortgage Relief Plan (MRP) fails to “address the underlying structural causes” of the crisis, Opposition politicians charged yesterday, urging it to instead focus on “big ideas”. K P Turnquest, the FNM’s deputy leader, told Tribune Business that the Christie administration needed to direct its energies to examining interest rate spreads and the Bahamian Prime Rate, plus consumer protection legislation. He argued that the moribund economy and a near15 per cent unemployment rate, coupled with high borrowing (interest rate) costs, lay at the heart of problem that has resulted in $670 million worth of Bahamian mortgages falling into arrears. Mr Turnquest was backed by Branville McCartney, the Democratic National Alliance’s (DNA) leader, who also implied that the Government’s revived MRP was a ‘band aid’ solution at best. He called on the Government to introduce legislation requiring commercial banks and other lenders to permit borrowers, who had been current for many years, to use the equity built up in their homes to refinance and retain their properties. The Government’s new MRP version has allocated $20 million, over a four-year period, to fund ‘financial inSee PG B2
Gov’t urged to focus on ‘sustainable big ideas’ FNM deputy calls for interest spread examination DNA chief wants home equity solution legislated
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By NATARIO McKENZIE
Tribune Business Reporter
nmckenzie@tribunemedia.net BAHAMAS Power & Light (BPL) plans to raise $100 million in new debt financing during the 2017-2018 fiscal year, it was revealed yesterday, and is working on a new tariff structure and customer debt forgiveness. Philip Davis, the Deputy Prime Minister, used his contribution to the Budget debate to hold out the prospect that much-needed improvements to BPL’s supply reliability and costs is on the way. He said 80 Mega Watts (MW) of rental generation capacity was set to be installed at BPL’s Blue Hills power station, in a bid to deal with the power outages and load shedding caused chiefly by the inability of its existing turbines to meet New Providence’s demand. And, reiterating that BPL planned to roll-out prepaid electricity meters, Mr Davis also suggested that the ‘arrears forgiveness’ initiative would result in customers having their power restored. However, without actually
Utility’s hands tied until $600m bond placed DPM pledges new tariff structure, arrears forgiven 80MW of rental generation to counter outages saying so, Mr Davis’s presentation confirmed that BPL, and its manager, PowerSecure International, effectively have their hands tied financially - and are unable to effect real improvements - until the Government refinances the $600 million in legacy debts and liabilities left behind by the Bahamas Electricity Corporation (BEC). A ‘Rate Reduction Bond’ (RRB) will be placed with a mixture of international and Bahamas-based investors to See PG B4
Govt is warned: ‘Keep hands out’ of private firms Businesses against forcing post-duty end price cuts Urge Christie Gov’t: ‘Let market forces prevail’ Competition, not intervention, the true answer By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net THE Government was yesterday urged to “let market forces prevail” and “keep its hands out” of private businesses, amid suggestions that Price Control is seeking greater powers of intervention. Rupert Roberts, SuperValue’s president, and Edison Sumner, the Bahamas Chamber of Commerce and Employers Confederation’s (BCCEC) chief executive, said competition was the best method for keeping conCEO of Chamber of sumer prices keen Commerce Edison and affordable. Sumner. The duo were speaking out after Price Control Commission chairman, E. J. Bowe, suggested the Price Control Act will be amended to force companies to reduce product prices in line with import duty reductions and exemptions. Such a measure appears designed to ensure businesses pass reduced/eliminated taxation on to Bahamian consumers in the form of reduced prices, but many in the private sector will likely view the proposal as a further example of Government overreach. They are likely to perceive it as tantamount to unwarranted interference and intrusion into the affairs of private companies, and their freedom to determine their prices, margins, revenue and profitability. Mr Roberts told Tribune Business that his supermarket chain automatically reduced prices on products where import duties were reduced or eliminated, adding that he preferred ‘competition’ over government action to drive adjustments. “The only thing is that it should be competition, not government action,” he said. “If somebody is selling something for 50 See PG B5