The private sector is warning that the uncertainty created by the affair could deter potential foreign direct investment in the Bahamas.
Contacted by The Tribune at his Florida office, Aaron Samson said that although AES hoped to begin construction of its $300 million LNG facility on Ocean Cay and the $160 million pipeline by early next year, it could be difficult for the company “to finance things if you don’t know what the process”.
Mr Samson was reacting to last week’s press conference by Keod Smith, the Bahamas Environment, Science and Technology Commission (BEST) chairman, who urged the Government to move “very slowly” in granting approval for any of the three LNG projects, the other two being Tractebel and El Paso. Mr Smith said he did “not believe that this is the time for the Bahamas to engage in the kind of activities which these companies are proposing” and that he was “hopeful that the Cabinet of the Bahamas will not proceed any further in determining whether these proposals will be approved”.
Mr Smith’s comments have caused disquiet both at AES and among the business community here, as they contradict the position taken by other government ministers, particularly Leslie Miller, and indicate the administration is not speaking with one voice. Executives in the Bahamian business community, speaking to The Tribune on condition of anonymity, said the mixed messages being given to international investors could deter potential foreign direct investment in this nation, upon which it is heavily reliant to drive future growth. Ms Samson told The Tribune: “I don’t know what to make” of Mr Smith’s comments. He added, though, that whatever recommendations the BEST chairman came up with were not a problem for him, provided the Cabinet did not approve them.
The AES Ocean Express project director said he had “had no involvement, participation or contact with Keod Smith during this process”. “I’m a bit baffled when I’m directed to work with one minister and he makes a public statement and then Keod Smith makes another,” Mr Samson said. The AES Ocean Express project team have worked with Mr Miller, the minister of trade and industry, and Marcus Bethel, the minister of health, on the Environmental Impact Assessment (EIA) and approval process. The former contradicted Mr Smith’s comments this week, saying he could “see no problem” with either the LNG industry’s safety record or the environmental issues raised. Mr Miller had previously said the LNG projects could each add between $15-$20 million per annum to the Public Treasury, with fees coming from use of the land and some sort of licensing system.
In responding to Mr Smith’s assertion that the EIA and approval process was being rushed, Mr Samson said: “I don’t know how he can say that.” He added that the entire process had been ongoing since autumn 2001. Mr Samson said: “The thing that disturbs me is that there seems to be no acknowledgement in the press or from the Sam Duncombes of this world that there is a review process and public consultation process in place.
“This is by far the most extensive process of any EIA done in the Bahamas and it still doesn’t seem to be good enough. The difficulty we’re having is that everyone understands the process in the US, but the world in the Bahamas doesn’t understand the process and Keod Smith doesn’t understand the process.” AES has spent some $4 million in producing its EIA.
Mr Samson added that AES expected the US final draft environmental impact statement to be finalised later this month or in early December. Sources close to the various LNG projects, speaking on condition of anonymity, said that although Mr Smith had expressed concerns that no regulatory framework existed in the Bahamas to manage both the environmental and safety aspects, the 36-month timescale AES had set itself for constructing the LNG terminal would provide time aplenty to create one.
When asked about whether the potential uncertainty caused by the AES controversy could deter foreign investment, Allyson Maynard-Gibson, minister of financial services and investments, said: “I can understand the question you’ve asked and the one asked by investors, but I’m quite satisfied that Bahamian and non-Bahamian investors understand the process by which investment proposals are approved. They are either dealt with by Cabinet or the National Economic Council, and I’m quite sure in these circumstances there is no uncertainty. “Minister Marcus Bethel, who is the minister under whose portfolio the BEST Commission falls, has been very clear from day one what the process by which the entire matter is dealt with is, and the record will show he has followed these steps right from day one.” AES had previously said it believed the BEST Commission’s consultants would recommend the project’s approval, subject to certain conditions.
Documents filed with US energy regulators on October 3 by Baker Botts, attorneys for AES, said: “Ocean Express understands that ICF Consulting has completed an independent review of the EIA [Environmental Impact Assessment] and has provided BEST with its recommendation that the EIA be approved, subject to certain recommendations identified during the review process and contingent upon development of an Environmental Management Plan.”
By Neil Hartnell, The Tribune
