Former St Kitts – Nevis MP caution authorities about the privatization of Solar Photovoltaic System

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Dwyer Astaphan is a lawyer and former St Kitts-Nevis Minister of National Security and Tourism

By Dwyer Astaphan

Last week, I spoke of the solar power plant to be established in St Kitts and Nevis. Now, this requires some expansion; while I applaud the government for wanting to move to renewable and clean energy. I think they have made a bad decision in this case, given the importance of this project.

All of the technical studies should have been done. Wide-scale consultation with the country should have taken place. People’s perspective should have been invited; so that, everybody reaches a point of understanding what this is all about: including the scope of the project, the cost of the project, the structure of the facility and the ownership structure. But that hasn’t happened.

We haven’t seen an environmental impact assessment. We haven’t seen any geo-technical or other technical reports. We are told that the project is on and that a Swiss company has the contract. Now, this is not a knock on the government. This is an observation. But I also observe the opposition [ the political parties] and the rest of us, because the opposition has not been alert on this project, neither has the press and the population.

Democracy requires active and proactive involvement of the social and economic partners and particularly of the media and society at large. This project is not a hotel or a factory. We are talking about our island’s power supply and energy supply. This is all about power to the people and a company controlled by special interests and given so much power, over the energy supply of our little island. Besides, they would be in a position to exercise heavy influence on political decision-makers at the potential detriment of the people and would constitute, among other things, a potential threat to national security, the social and economic well-being of the people.

So the decision should have been to engage the public and engage conceptual renderings and proposals from qualified individuals and firms. But the ownership must be ours [St Kitts and Nevis]. And when we have developed these skills among our people, so to should be the operation.

Now, the government of St Kitts and Nevis, the state-owned St Kitts Electric Company (SKELEC) can open up its shares and become a public company and invite people in St Kitts and Nevis to buy shares in it. And if we can raise enough money for the 36 megawatts, then we build-out what we can raise enough money locally to do and we go along accordingly. In addition, there is money out there in world institutions readily available at very low rates of interest. Those institutions would be very happy to consider lending money to environmentally friendly projects. So the STEP workers, the 9,000 plus people on the government payroll, workers in businesses in town, self-employed people, fishermen, taxi drivers, farmers, everybody can have a chance to own it and at the end of the year, get dividends from the company.

We already have a lot of money leaking out of the country. We have people working here who send money, through wire transfer and the money transfer businesses daily. They are trying to help their families, and we understand that we respect that. But what do you think will happen in this case if the company says the cost to put-up this solar photovoltaic generation and lithium-ion battery energy storage system is US$70 million?

We haven’t seen a breakdown of the numbers, and the chief executive officer of the Swiss company is saying “they’re going to have high profitability from it.”

Then why are we allowing all of that money to leak from our economy, taking into consideration the monthly electricity bills that we have to pay SKELEC? Who will then pay a foreign company? Why allow that to happen? And, why would a government, especially based on the undertakings that it made to the country six years ago, many of which I must say are still to be delivered; why would a government not explore every opportunity to ensure that this company is locally owned?

Why bleed and already bleeding patient? And this will not be small bleeding. This will be large bleeding because Leclanché is determined to make and expect to make a massive profit out of selling energy to SKELEC: energy that is generated with solar panels from the sun, the heat from the sun, and the rays from the sun and stored in batteries. This is our land, the sun that God has given us plentifully.

As I said previously, this is not a hotel or a manufacturing operation. This is energy. You would think that with this COVID-19 situation, which is making things harder already, the government would be minded to make this a local venture. And even without the COVID-19, this is a historic moment, similar to when lands were acquired by the government on behalf of the people. Therefore, why not privatise the energy supply? Instead, the government has entered into a ‘power supply contract’ with a foreign company when that money that can remain in the economy can be used by the people in the economy to grow wealth, to grow prosperity for everybody, including the government.

The theory is simple. Because, when money spins in the economy, the government gets its fair share. So philosophical and patrimonial, there cannot be a reason to justify a private operation, a foreign private operation from owning this. On top of that, the government made a bad choice in [the company] a storage company, not a build-out company, as far as my research tells me of Leclanché.

[The $70 million microgrid project is being built by Leclanché, one of the world’s leading energy storage companies, which will serve as the prime engineering, procurement and construction (EPC) contractor.]   

But in 2017, [Leclanché] their sales were, about US$13 million. And that same year – S. L. Horsford & Co Ltd., which is a Basseterre company, their sales were the equivalent of nearly US$60 million, nearly five times that of Leclanché. And in 2019- 20, the sales of TDC, another local company, was about US$57 million. 

So what are we having here? This cannot be a good decision, [ for St Kitts and Nevis]. I am not trained in economics, finance our accounts, but I have asked questions and opinions of persons who are so trained; and I found that the data, the financial data of Leclanché leaves a lot to be desired.

God forbid this company gets into problems and we inherit another major problem on our hands as if we could afford any more. But these people, these professionals who I have consulted – all of them, have said that the people should own this operation. They have expressed opposition to Leclanché owning it. We in St Kitts and Nevis have to realize that elections are not supposed to be just transactional. Elections are supposed to be aspirational. We the people of St Kitts and Nevis must understand as Marcus Garvey indicated – you own the land, then you control the game. And this is what we suffered from colonialism. People who own these things controlled the game.

Why would a government, in the year 2021, in a country that is almost 30 years old, independent for almost 30 years, do something like this? I think it is a big mistake and I hope it is not too late to reverse it.

Listen to Dwyer Astaphan commentary here:

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