The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The Water & Sewerage Corporation managed to cut the debt owed to its main BISX-listed supplier by $3.3m in October after making zero progress during then first nine months of 2020.

Consolidated Water, the operator of the two New Providence reverse osmosis plants that supply the water consumed by the state-owned utility's customers, last night revealed that the debt owed to it had been cut to $15.1m at end-October 2020.

Its corporate filings with the US Securities & Exchange Commission (SEC), disclosing its third quarter results, revealed that at end-September the sum owed by the Water & Sewerage Corporation was the same as it had started the year with -$18.4m.

Consolidated Water also revealed that more than three-quarters of the sum owed to it was "delinquent", meaning it is 90 days or more past due, with the $3.1m arrears reduction in October likely to have been paid on the Corporation's behalf by the Government using taxpayer monies.

"Consolidated Water (Bahamas) accounts receivable balances (which include accrued interest) due from the Water and Sewerage Corporation of The Bahamas amounted to $18.4m as of September 30, 2020, and $18.4m as of December 31, 2019," the company's filings stated.

"Approximately 77 percent of the September 30, 2020, accounts receivable balance was delinquent as of that date. The delay in collecting these accounts receivable has adversely impacted the liquidity of this subsidiary. As of October 31, 2020, Consolidated Water (Bahamas) accounts receivable from the Water & Sewerage Corporation totalled approximately $15.1m."

Consolidated Water added: "We believe the delays we have experienced in collecting Consolidated Water (Bahamas) receivables were extended due to the impact of Hurricane Dorian, which devastated the northern Bahamas in September 2019, and the severe economic impact of the COVID-19 pandemic on The Bahamas government’s revenue sources.

"If Consolidated Water (Bahamas) continues to be unable to collect a significant portion of its delinquent accounts receivable, one or more of the following events may occur. Consolidated Water (Bahamas) may not have sufficient liquidity to meet its obligations; we may be required to cease the recognition of revenue on Consolidated Water (Bahamas) water supply agreements with the Water and Sewerage Corporation; and we may be required to provide an allowance for doubtful accounts for Consolidated Water (Bahamas) accounts receivable."

Consolidated Water said none of these events had ever occurred before, as all previous delinquent debts had been paid after payment plans were developed with the Government. The company added that it had "sufficient spare parts and consumables inventories to continue normal operations for the remainder of 2020 and into 2021" in The Bahamas.

The latest debt revelations come after Adrian Gibson, the Water & Sewerage Corporation executive chairman, recently revealed that it owed more than $30m to vendors and suppliers as at end-August 2020. A significant chunk of that will likely have been the debt owed to Consolidated Water.

They also occur just after another reverse osmosis plant supplier, Aqua Design in central Eleuthera, shut off the water supplied to the Water & Sewerage Corporation's customers due to a payment dispute over a much smaller amount owed by the state-owned utility.

Consolidated Water's filings thus further highlight the financial hardship inflicted on the Water & Sewerage Corporation by Dorian and COVID-19.