The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

A BISX-listed company has now been operating one of New Providence’s key water plants for more than three years without a long-term contract from the Government.

Consolidated Water’s 10-Q (quarterly) filing with the Securities & Exchange Commission (SEC) last night confirmed that it is still operating the Windsor plant - one of two that supply New Providence’s Water & Sewerage Corporation customers - on a month-to-month basis.

It has done this since July 2013, when Consolidated Water hit the total amount of water it was required to produce under its previous contract, which then expired.

“At the request of the Government of the Bahamas, Consolidated Water (Bahamas) continues to operate and maintain the Windsor plant on a month-to-month basis to provide the Government with additional time to decide whether or not it will extend Consolidated Water (Bahamas) water supply agreement for the Windsor plant on a long-term basis,” the BISX-listed company said in its 10-Q filing.

Tribune Business inquiries last suggested that the question of whether Consolidated Water would receive a new five-year contract, or it be replaced by another operator/manager, had been sent to a Cabinet committee to make a decision.

However, more than three years later, the Christie administration has been unable to yet reach a decision on an asset key to the water supply for thousands of New Providence homes and businesses.

Apart from agreeing a new deal with Consolidated Water, the Water & Sewerage Corporation can “exercise a right of first refusal” to purchase the Windsor plant and associated materials at a negotiated price, or require the company to remove the equipment there.

Tribune Business revealed several years ago that, at the time the former Consolidated Water contract expired, at least one Bahamian group was interested in taking over as Windsor’s operator.

Meanwhile, Consolidated Water’s top-line earnings from the Windsor plant continue to decline, falling year-over-year by 13.3 per cent 11.1 per cent respectively for the three month and nine month periods to end-September.

“Consolidated Water (Bahamas) generated revenues from the operation of this plant of approximately $1.3 million and $1.5 million during the three months ended September 30, 2016, and 2015, respectively, and $4 million and $4.5 million during the nine months ended September 30, 2016, and 2015, respectively,” the BISX-listed company said yesterday.

It added that its Bahamas revenues were down by $1.749 million year-over-year for the nine months to end-September 2016, which it attributed to reduced electricity prices. As a result, the energy component of the tariffs charged to the Water & Sewerage Corporation decreased.

“Bulk segment revenues were $22.136 million and $24.49 million for 2016 and 2015, respectively,” Consolidated Water said.

“The decrease in bulk revenues from 2015 to 2016 is attributable to our Bahamas and Cayman operations, which generated approximately $1.749 million and $730,000 less in revenues, respectively, in 2016 than in 2015 due to a significant decrease in the prices of diesel fuel and electricity from 2015 to 2016, which reduced the energy component of our bulk water rates.”

The trend was continued through the 2016 third quarter, with Bahamas revenues off $246,000 compared to 2015 numbers.

This means that, over a period spanning two-and-three-quarter years, Consolidated Water’s Bahamian revenues have fallen by almost $10 million - some $9.89 million - due to reforms at the Water & Sewerage Corporation combined with lower energy costs.

Tribune Business reported earlier this year that Consolidated Water’s Bahamian revenues had decreased by more than $8 million over the two years to end-2015, as the Water & Sewerage Corporation’s leak and loss reduction programme bears fruit.

The BISX-listed water producer, in its annual 10-K report filed with the US Securities & Exchange Commission (SEC) , revealed that its Bahamian revenues for 2015 had fallen by $5.641 million year-over-year.

It blamed the decline largely on a 13 per cent reduction in water volumes purchased from its New Providence-based Blue Hills and Windsor reverse osmosis plants by the Water & Sewerage Corporation, which is able to buy less due to the drop in losses from its system.

When added to the $2.5 million year-over-year decline in Bahamian revenues in 2014, Consolidated Water saw some $8.141 million shaven off the 2013 top-line it earned in this nation.