This information is derived from the State Department's Office of Investment Affairs' Investment Climate Statement. Any questions on the ICS can be directed to EB-ICS-DL@state.gov
Last Published: 9/27/2016

State-Owned Enterprises (SOEs) are active in the utilities and services sectors with several notable monopolies still maintained by the GCOB.  There is a published list of SOEs available on www.bahamas.gov.bs under a listing for Government Corporations and Statutory Agencies. There have been discussions about the privatization of SOE’s, but movement has been slow and recent policy decisions suggest a preference for private management of the remaining SOE’s.  Some of the SOEs include:
 
• Bahamasair Holdings Ltd. (National Flag Carrier)
• Bank of The Bahamas
• Bahamas Electricity Corporation (BEC)
• Water and Sewerage Corporation
• Broadcasting Corporation of The Bahamas (ZNS)
• Nassau Flight Services
• Hotel Corporation of The Bahamas
 
The Water and Sewerage Corporation (WSC) and the Bahamas Electricity Corporation (BEC) are the largest public corporations in The Bahamas.  The government has permitted limited exceptions to these monopolies, and has provided licenses to private suppliers of electrical and water and sewerage services.  These licenses have been issued for private real estate developments or in locations in which there is limited government capacity to own and operate the utility.  An additional exception was made for the city of Freeport on the island of Grand Bahama which has its own licensing authority for the provision of electricity, water, and sanitation services.
 
The Bahamas telecommunications sector has been partially privatized and, in April 2011, the government sold 51 percent of the Bahamas Telecommunications Company (BTC) to Cable & Wireless (DBA LIME), with the government retaining ownership of 49 percent of the company.  In 2014, at the initiative of the government, Cable & Wireless agreed to transfer two percent of its shares to a trust to fund social programs, but board and management control remains with the investors.  In October 2015, Cable Bahamas Limited (CBL) won the bid to become the country’s second cellular services provider, opening the way for competition in the cellular market.  As of April 2016, CBL is in the process of  building new infrastructure to support this new service.  The government has announced plans to issue a third cellular license by the end of 2016.  Other areas in the telecommunications sector have been liberalized and are regulated by the Bahamas Utilities Regulation and Competition Authority (URCA). 
 
The Government has announced its intention to find a strategic partner for national flag carrier Bahamasair, although there appears to be no immediate plans for the divestment of the company.  Privately owned airlines providing service to the various markets have consistently complained of the market distortions created by Bahamasair, claiming that the national airline uses state funds to undercut fares.  The airline has operated at a loss for more than two decades.
 
Bahamas Electricity Corporation (BEC) recently transferred assets to Bahamas Power and Light (BPL), a newly formed wholly-owned subsidiary and, once refinanced, its debt will be removed from the Government’s contingent liabilities. In February 2016, the Government signed a 5-year management contract with PowerSecure International, Inc. (subsequently acquired in March 2016 by Southern Company) to take over management of BPL.  Amendments to the Electricity Act that took effect in March 2015 opened the door to grid-tied small-scale alternative power generation systems and power credits, although the application process and certain technical requirements have not yet been defined.
 
The Bahamas is not a party to the Government Procurement Agreement (GPA) within the framework of the World Trade Organization (WTO), but efforts to implement the Economic Partnership Act with the European Union may address similar concerns.
 
OECD Guidelines on Corporate Governance of SOEs
Corporate governance of SOEs generally includes a board of directors chaired by senior politicians, and board members are drawn from the Chambers of Commerce, trade unions, governing party members, and broader civil society.  Some board memberships are paid and most are not subject to public vetting.  Oversight is under the purview of a member of the Cabinet.  Historically, there have been criticisms that these corporations have been used to employ party supporters and, with few exceptions, SOEs have not demonstrated sustained profitability.  The board of newly-created BPL includes foreign representatives and technical experts.
 
Sovereign Wealth Funds
The government’s oil exploration legislation, tabled in December 2014, will establish the legislative framework for a sovereign wealth fund managed by the Central Bank.

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