The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The Water & Sewerage Corporation would incur further losses if it attempted to supply western New Providence, its immediate past president yesterday telling Tribune Business the utility “just doesn’t have the capacity” to meet that extra demand.

Wading into the ongoing controversy over the current Government’s decision to axe the 25-year water supply franchise agreement that the former Ingraham administration signed on election day with New Providence Development Company (NPDevCo), Anton Saunders said the Corporation was unable to meet even existing customer demand.

And, given that the Water & Sewerage Corporation’s water losses (non-revenue water) were running around 55 per cent, the former chairman said attempting to supply western New Providence itself would merely increase the problem.

Mr Saunders said the Christie administration had taken a “silly” decision to “recreate the wheel”, adding that the May 7, 2012, agreement with NPDevCo was a true contract that was properly signed-off.

He added that the franchise deal was no threat to the Water & Sewerage Corporation’s financial position, and the $1.50 per 1,000 gallons royalty fee it was due to receive would boost - not cut - the state-owned utility’s profitability.

Pointing out that NPDevCo had supplied areas such as Lyford Cay and Old Fort Bay for years, and that the exclusive 25-year franchise was just formalising that arrangement, Mr Saunders said the company’s subsequent joint venture deal with BISX-listed Consolidated Water did not require government intervention.

“What happened at the Water Corporation was that we agreed with NPDevCo that once they put down a fourth main for the sewer going to the Airport Industrial Park, which they did, we would continue the franchise arrangement for that area,” Mr Saunders told Tribune Business.

While the Water & Sewerage Corporation had wanted NPDevCo to improve water quality, he added that how they supplied customers was “their business”.

The franchise agreement, Mr Saunders said, replicated the one already granted by the Water & Sewerage Corporation to Albany. Under the terms of that deal, the Corporation was also receiving royalties linked to the Consumer Price Index (CPI).

And the former Water & Sewerage Corporation chairman separated the franchise agreement from the joint venture agreement between NPDevCo and Consolidated Water, describing the two as distinct with no government approval warranted for the latter.

“If NPDevCo wants to go to Consolidated Water to produce the water, that is a matter for NPDevCo. Government should not get involved with that,” Mr Saunders told Tribune Business.

“The silly thing the Government has done is that with all water pumped into the system now, the Government loses revenue.”

That was a reference to the Water & Sewerage Corporation’s multi-million dollar non-revenue water losses. The former Ingraham administration signed an $83 million loan agreement with the Inter-American Development Bank (IDB) for a project to tackle that, and other issues, in a bid to overhaul the Corporation and Bahamian water industry.

Mr Saunders was effectively implying that allowing the Water & Sewerage Corporation to supply western New Providence today, with steep non-revenue water losses still in play, would result in increased losses and no return on the considerable investment that would be required.

“The Water & Sewerage Corporation doesn’t have enough water to provide every customer in the Bahamas with water,” he told Tribune Business.

“If they decide to go with Water & Sewerage Corporation today, they do not have enough capacity to meet those needs. They just don’t have that capacity.........

“Why recreate the wheel because of some dislike? There’s a strategic plan in the Water & Sewerage Corporation, and if they follow that plan they will get themselves out of a hole in 10 years. It won’t happen overnight.”

While he had not signed the franchise agreement himself, Mr Saunders said he was contacted and informed it had been concluded while out campaigning for the Free National Movement (FNM) on election day.

“I would have signed that agreement if it came to me in a timely manner,” he added. “It was properly signed off, prim and proper.

“It’s not going to impact any profits for the Water & Sewerage Corporation. Having that franchise will enhance the profitability for the Water & Sewerage Corporation.

“We don’t need to pipe water down there and lose it. But the administration of the day has taken a different approach. It’s totally unfortunate that in this country we reverse decisions for reversing’s sake. Everyone in Water & Sewerage Corporation management, the technocrats, they’re the same - the same people are advising. I guess it’s the age we’re living in.”