The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

BISX-listed Consolidated Water says its main Nassau plant is supplying 20 per cent more water than required under the terms of its contract with the Water & Sewerage Corporation, as it awaits the Government’s decision on whether it will continue to operate the Windsor facility.

Rick McTaggart, Consolidated Water’s chief executive, told a conference call with Wall Street analysts that the Blue Hills reverse osmosis plant was exceeding its contracted capacity.

He said the facility was “producing 20 per cent more than contracted capacity from Blue Hills to assist the Water & Sewerage Corporation in meeting its target”.

The Consolidated Water chief said this meant an extra 55 million gallons of water per month “has been delivered since the beginning of the beginning of the year”.

Mr McTaggart indicated nothing had changed with respect to whether it would retain the operating contract for Consolidated Water’s second Nassau reverse osmosis plant, Windsor.

The BISX-listed reverse osmosis plant operator had previously warned that it might have to take an impairment hit to $3.45 million worth of goodwill if it lost Windsor, and it promised to notify investors of any adverse material impact.

Mr McTaggart, during the conference call, merely confirmed that Consolidated Water had hits its contractual goals in July 2013, and had been asked in September to continue operating Windsor “to give the Government more time” to make a decision.

Meanwhile, Tribune Business can reveal that two other Bahamian groups, in addition to the Don Demeritte-led EPS Consultants, had submitted offers earlier this year to the Water & Sewerage Corporation to take over the Windsor plant’s operations.

One entity, with as-yet unknown investors and shareholders, was called PCP Bahamas, while another offer came from the Water & Sewerage Corporation’s own management union.

However, while confirming the Water and Sewerage Managers Union’s (WSMU) offer, a source close to the situation confirmed that it was “never taken seriously” because the union did not have the required capital and financial backing.

“There were several people who applied,” the source said. “The union did apply, but they didn’t have any money.

“They applied for applying’s sake. They didn’t have any money. They jumped in in a political way, and it wasn’t a serious application.”

Yet all these bids were rendered moot by the Government’s decision, led by Deputy Prime Minister Philip Davis, to put the Windsor plant operator contract out to transparent public tender.

“What happened is that three-four people applied, but they applied for different things,” the source said. “The Deputy Prime Minister was concerned they were not applying for the same thing.

“Nobody was applying for a, b and c, so we needed to specify what we want in the bid. That was the biggest problem.”

The earlier bids, the source said, were unsolicited and submitted simply because the groups involved knew Consolidated Water’s contract was about to end, and that Windsor might become available.

Yet Tribune Business understands that the Water & Sewerage Corporation were initially inclined to accept the bid from EPS Consultants, the group headed by former chairman Don Demeritte, on the grounds that it offered the lowest cost per 1,000 gallons of water.

This newspaper was told by informed sources that EPS Consultants offered a $5.75 per 1,000 gallons price, better than the management union’s $5.87 per 1,000 gallons and PCP’s $5.78 per 1,000 gallons.

Its bid was also significantly better than Consolidated Water’s offer, which was $8.63 per 1,000 gallons.

The BISX-listed company has since dropped its price to the level offered by EPS, Mr McTaggart’s October 2, 2013, letter to Mr Davis offering the Water & Sewerage Corporation a $5.90 per 1,000 imperial gallons of water price, with a $1.083 credit for “deferred payment” of its additional capital investment.

Apart from Mr Demeritte. EPS’s principals also include former deputy chairman, Robert Wells; Higgs & Johnson attorney and partner, Leroy Smith; and CFAL and Nassau Guardian principal, Anthony Ferguson.

Tribune Business understands EPS had selected Seven Seas Water, which took over the Emerald Bay Resort’s water supply and wastewater treatment facility, as its operating and equipment partner.

The company has operations in the US Virgin Islands, Trinidad, St Maarten and Turks & Caicos.

And Chesters Engineering had been selected as the engineering partner.