National

BPL Report Reveals Deficiencies with Wartsila Deal

Published

6 months ago

October 30, 2023

Berthony McDermott

NASSAU, BAHAMAS – Energy Minister JoBeth Coleby-Davis tabling a report in Parliament Monday that outlined several deficiencies and failures in the agreement with Bahamas Power and Light and Wartsila – the power company contracted to supply over one hundred megawatts of power in New Providence.

Coleby-Davis telling parliamentarians the $96.9m agreement ballooned and is still growing.

A breakdown shows $7.6m was spent on dismounting station a $108.3m was spent on generator and auxiliaries and $2.1m bringing it the total to $117m.

In October 2019, BPL entered an operational and maintenance agreement with Wartsila. The report says the agreement was projected to cost $13.9m over two years or $6.9m per year. However, BPL ended up spending $8.2m per year or $24.6m over they two-year contract and third-year extension.

In the report, BPL CEO Shevonn Cambridge also noted the engines were being installed in a powerhouse built in 1981 which was already showing signs of structural deterioration.

The report also called the outsourcing of BPL’s plant a mild form of union busting as Wartsila hired it’s own workers and prohibited BPL staff from entering the site.

December 2021 saw an extension to the agreement. This saw the cost jump from $6.9m to $8.2m per year over three years.

In 2021, BPL’s present management found several anomalies with Wartsila’s performance report.

Among them, a notable drop in the output of the engines during the critical summer peak load.

By industry standard, the seven engines at station A should’ve provided 740,000 megawatt hours annually.

However, the first year saw 560.5 thousand mw, 648.3 thousand in 2021, and 561.9 thousand in 2022…

Bpl’s current board pushed for liquidated damages reimbursements for the nonperformance of Station A. This resulted in a $2.1m penalty payment to BPL.

The board also terminated the agreement effective January 1, 2023 with an annual savings of approximately $2.5m.

Wartsila issued a termination certificate that listed several breaches by BPL, prohibiting the power giant from enforcing certain preference guarantees.