The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

At least one Bahamian investor group’s ambitions were dashed last night after the Water & Sewerage Corporation’s chairman confirmed it had agreed a 15-year extension for BISX-listed Consolidated Water to operate the Windsor reverse osmosis plant.

Leslie Miller told Tribune Business that the deal was “in the best interests of the Bahamian people”, as the cost savings provided by the long-term deal could be up to $4 million per year.

His revelations, though, are likely to dismay former Water & Sewerage Corporation chairman, Don Demeritte, and his EPS Consultants’ consortium, who yesterday said they remained “ready, willing and able” to take over Windsor’s management.

However, Mr Miller said a deal with EPS Consultants or any other Consolidated Water rival “makes no sense”, as they would have to build “a brand new plant” due to terms previously agreed with the BISX-listed company.

Once Consolidated Water hit the Windsor water production target set by its last contract in July 2013, the Water & Sewerage Corporation could either agree a five-year extension or take one of two other options.

These were to either acquire the Windsor plant, and all associated materials and equipment, from Consolidated Water at an agreed price, or for the latter to effectively dismantle the facility and remove all assets.

Given the cash-strapped position that the Water & Sewerage Corporation and the Government find themselves in, these terms could be viewed as amounting to a ‘poison pill’ that favoured a new contract for Consolidated Water over any rival buyers.

Mr Miller, meanwhile, suggested that EPS Consultants and other Windsor contenders lacked the financial backing necessary to take over the water plant and manage its operations.

This, though, was effectively refuted by Mr Demeritte, who said that his consortium remained willing to move despite the two to three-year uncertainty over the Government’s plans for Windsor and intentions towards Consolidated Water.

Unaware that the Water & Sewerage Corporation had finalised a new contract with his BISX-listed rival, Mr Demeritte said it had been “a difficult pill to swallow” when Consolidated Water was allowed to continue operating Windsor on a month-to-month basis.

Mr Miller, though, subsequently laid all doubts to rest when he told Tribune Business: “We’ve just given them [Consolidated Water] an extension on the contract because the price they were giving us on the extension was in the best interests of the Bahamian people.

“I think it’s a 15-year extension. We had options of five, 10 and 15 years, and 15 years was better for us because it was a much better price.

“I haven’t got my notes in front of me, but it was a substantial savings on an annual basis. I believe it was around $4 million per year.”

Mr Miller said the Water & Sewerage Corporation and Consolidated Water had agreed the new contract within the last month, although the latter made no mention of it in its 2016 third quarter results announcement this week.

And Mr Demeritte yesterday told Tribune Business that while he had been informed Consolidated Water was again pushing for a new agreement over the Windsor plant, it had been suggested - by Mr Miller - that he write to Deputy Prime Minister Philip Davis, who has ministerial responsibility, to try and rekindle interest in the EPS Consultants’ bid.

Mr Miller, though, said Consolidated Water had been “doing a really good job” in the management of both Blue Hills and Windsor - the two plants that supply water to the Water & Sewerage Corporation and all its New Providence customers.

“To allow a new entrant into the market, they would have to put up a new plant,” he told Tribune Business. “We saw no reason to duplicate what was already there. It makes no sense.

“These guys come in and tell us what they could do, but they don’t have the financial capacity to do what they say they’re going to do. They don’t have the financial backing from a sound institution to do x, y, z.”

Mr Demeritte, though, reminded the Government of its professed commitment to ‘believe in Bahamians’ when it came to assessing the merits of rival bids to Consolidated Water.

“As far as I am aware, we are the best technical proposal and the best price,” he told Tribune Business. “That was done way before anyone else. We still stand ready and prepared to demonstrate that more than ever.

“If the Government is about empowering Bahamians, we’d love to put that to the test and employ some. We would love to assist the Government to empower Bahamians. We still stand, anxious and optimistic, that we’ll have that opportunity.”

The EPS Consultants group has been marketed as “a cross-section of Bahamians”, and apart from Mr Demeritte it also included Robert Wells, a former Water & Sewerage Corporation deputy chairman. Other principals included CFAL chief, Anthony Ferguson, and Higgs & Johnson partner, Leroy Smith.

Mr Demeritte, meanwhile, said EPS Consultants had set aside 40 per cent of its equity for Bahamian investors - firstly via a private placement, and then through an initial public offering (IPO).

“The framework would then be in place for us to leverage that and pursue other water production opportunities in the Caribbean.”

Members of the Water & Sewerage Corporation’s management union had also expressed an interest in the Windsor plant, as their industrial agreement gives them a ‘90-day exclusivity’ period to bid on all outsourcing contracts.

However, based on Mr Miller’s comments, neither they nor EPS Consultants will now have the opportunity.