The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The Government has decided to put the multi-million dollar Windsor reverse osmosis plant contract out to public tender, a move that was yesterday described as “a slap in the face” by one group with a long-standing interest.

Don Demeritte, a principal in the EPS Consultants group, described as “frustrating” the wait for the Government to decide who the Windsor plant’s future operator will be.

Noting that his group had been working on its Windsor bid for two years, Mr Demeritte said they had “patiently” watched as the deadline for Windsor’s current operator to complete its contract was extended several times.

“I’m surprised the Government has not yet made their minds up over Windsor,” he told Tribune Business yesterday. “I think it’s a slap in the face to Bahamian professionals that this particular decision is taking so long to be made.

“We [EPS] have been looking at this particular project for the past two years, as we knew it was going to come up in January 2013.

“We patiently watched the goal posts being switched from January to March, to May, to July and to September, waiting for the Bahamas government to do the right thing. It’s frustrating.”

The Windsor reverse osmosis plant is currently operated by BISX-listed Consolidated Water, which has continued to supply the Water & Sewerage Corporation with water even after fulfilling its obligations under the initial Windsor contract back in July.

While the Government (Cabinet) and Water & Sewerage Corporation were yesterday said to be “not inclined” to give Consolidated Water another contract, the BISX-listed firm having proposed a five-year extension, highly-placed sources said they wanted to put it out to formal public tender.

Highly-placed sources told Tribune Business that Philip Davis, deputy prime minister and minister of public works, who has responsibility for the Water & Sewerage Corporation, wanted to take this route in the interests of transparency and securing the best bid.

To-date, the Corporation has only been approached by groups such as Mr Demeritte’s who knew the Consolidated Water contract was set to expire.

This newspaper’s contacts told Tribune Business that the Water & Sewerage Corporation had subsequently been approached by other reverse osmosis providers, claiming they were unaware the Windsor plant contract was becoming available and seeking an opportunity to bid.

As a result, the decision was taken to open it up to competitive tender, so the Corporation and Bahamian people obtained the best deal possible.

Tribune Business understands the tender is set to be issued imminently.

“The Board and the Minister are not inclined to renew the Consolidated contract,” Tribune Business was told by one contact yesterday.

“Yes, the Government will go to tender, but no one is inclined to continue the contract with Consolidated.

“They want to go to tender to make it more transparent and invite other groups in. They want to be sure there’s fair competition.”

Although Consolidated Water is likely to bid on any Windsor tender, Tribune Business was told one factor counting against a Windsor renewal was the fact this would give it a monopoly on the New Providence reverse osmosis market.

The company already operates the other, larger Blue Hills reverse osmosis plant, and both the Government and the Water & Sewerage Corporation are keen to invite competition into the sector.

One source said that with operator groups submitting unsolicited proposals to the Water & Sewerage Corporation, rather than responding to the specifics demanded in a tender issued by the latter, it was impossible to compare and evaluate bids.

“It’s very difficult to compare A to C, as they’re using different information, unless you send out a Request for Proposal to get it right,” one source said.

Tribune Business was also told there is some disquiet in government circles that a decision over Windsor’s fate has taken so long, given that the expiration of Consolidated Water’s contract was well known in advance.

The contract has, from a top-line perspective, been highly lucrative for Consolidated Water and the initial operator it acquired, generating $80.167 million in revenues over the 15 years to January 2013.

And the BISX-listed water supplier, which had been seeking a five-year extension to its water supply contract, earlier this year confirmed that it earned $7.5 million in revenues from Windsor last year.

In a previous interview with Tribune Business, Mr Demeritte said his investor group included prominent Bahamians, such as CFAL principal Anthony Ferguson; Higgs & Johnson attorney, Leroy Smith, and former Water & Sewerage Corporation vice-chairman Robert Wells.

Mr Demeritte said then: “The Bahamian group is confident its pricing and technical capabilities are far superior to what is being currently offered.”

It is understood that the group would look to cut water supply costs within 18 months of taking over.

“Our reduced costs include the investment, retrofitting and modernisation of the plant,” Mr Demeritte said. “We believe the margins there currently are extremely high.”