The Tribune

By SANCHESKA

DORSETT

Tribune Staff Reporter

sdorsett@

tribunemedia.net

THE government is seeking to borrow $28.3 million from the Caribbean Development Bank to improve the access and quality of water in the Bahamas.

In the House of Assembly yesterday, Minister of State for Finance Michael Halkitis tabled the resolution for the Water and Sewerage Water Supply Improvement Project, which will cost approximately $41.8 million. Mr Halkitis said $28,329,000 will be borrowed from the CDB with a 2.6 per cent interest rate and the government will contribute the remaining $13.3 million.

He said the government will also get a “five-year holiday” and will not have to begin repaying the loan until five years after the date of execution. The payments will be made in 48 equal quarterly instalments.

Mr Halkitis said the scope of the project involves pre-investment studies, the acquisition of land in certain islands for the execution of the project, a public health and education awareness programme as well as the upgrade of the supply and distribution systems in New Providence, Crooked Island, Harbour Island, Eleuthera, Long Island, San Salvador and South Andros.

He also defended the government’s need to borrow the money, telling members in the House that water is essential.

“Water is a necessity, it is far from a luxury. Good, clean healthy water is a necessity and to give people access to it, it is an indication of human development, it enhances property value, and it improves peoples lives,” Mr Halkitis said.

“We will be able to provide water for communities that really need it. I expect during the debate, I am sure members will be able to testify on the long suffering of their constituents. My constituency will also be affected; works are underway in Coral Lakes and Boatswain where no water infrastructure has been in place. When you look at the amount of funds that we are borrowing, it is a relatively small amount.

“We believe that the terms are very attractive with the five-year payment holiday, it shows that the government of the Bahamas, contrary to what you may hear, is still able to access funds at very favourable terms. This loan also gives us the opportunity to do this work now. We can have access to the funds to bring relief to many, many people.”

The government has been heavily criticised by the FNM for its spending and borrowing habits.

Last month, after the government tabled a resolution to borrow $150 million to help cover the cost of relief efforts after the passage of Hurricane Matthew and Hurricane Joaquin, FNM Deputy Leader Peter Turnquest said he was concerned about the Christie administration taking on further debt.

“Our government brags about taking home $600 million in VAT, some $200 million more than budgeted, yet the debt has not gone down and they still have cash flow problems,” Mr Turnquest said previously.

“If you look at the budget, there’s all kinds of contingency allocations for every department. Why can’t we use that money? To go out and borrow more money, in the absence of alternatives, is one way to do it,” he said.

The Central Bank’s latest quarterly report disclosed that total public sector debt was a mammoth $7.604 billion, a sum equivalent to more than 90 per cent of national economic output (GDP).