The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

A PROJECT vital to the Government meeting its Baha Mar obligations was “not handled in the Bahamian people’s best interests”, a former Water & Sewerage chairman admitted yesterday.

Leslie Miller, the immediate past holder of that post, told Tribune Business he was “not going to have my name associated in any form or fashion” with the Gladstone Road WasteWater Treatment Plant and its 91 per cent cost overrun.

Emphasising that he inherited the problems associated with the plant’s construction when he became Water & Sewerage Corporation chairman in 2016, Mr Miller said he “stayed clear” of a deepening disaster that was “too much for me to bear”.

He revealed that arrangements for the Gladstone Road facility’s development “didn’t make sense to me” when he reviewed the Corporation’s files, and said he told the former government “I’m out of here” after learning the Ministry of Finance had overruled Board and management in making a $1 million payment to the project’s contractor.

The plant, which was supposed to treat Baha Mar’s wastewater and return it to irrigate the $4.2 billion project, was highlighted by the just-released Ernst & Young (EY) forensic audit as an example of how politically-motivated interference and mismanagement have cost the Corporation and Bahamian taxpayers millions of dollars.

Despite a 91 per cent overrun on the original $9.6 million budget, which has cost the Corporation some $18.3 million to-date, the EY report said further capital expenditure is required to complete the still-unfinished facility.

Besides the capital loss on the wastewater plant’s construction, every day it remains unfinished costs the Water & Sewerage Corporation significant revenue and operating losses. This is because the Corporation is having to pay non-completion ‘penalty’ to Baha Mar by supplying it with heavily discounted water to irrigate the Cable Beach development. “The Gladstone Road Waste Water Treatment Plant is capable of receiving waste water from Baha Mar, but is non-operational in the sense that the waste water is not being treated and returned for irrigation,” the EY report said. “Instead, the waste water is simply disposed of in the well.

“Because the Gladstone Road Waste Water Treatment Plant is non-operational, Water & Sewerage Corporation is currently providing Baha Mar with potable water at a substantial discount for irrigation purposes, further increasing the losses to the Corporation.

“As a result of the substantial budget overruns and inoperable facility, Water & Sewerage Corporation management believes that the facility will result in substantial losses to the Corporation, both with respect to the recovery of capital as well as operationally going forward.”

Adrian Gibson, the Water & Sewerage Corporation’s current chairman, declined to comment yesterday on the size of the discount Baha Mar is receiving or the dollar value of losses this is causing. He also decline to answer other questions.

Yet the Water & Sewerage Corporation’s mismanagement of the Gladstone Road project has created further potential liabilities for the Government and Bahamian taxpayer, given that its completion is among the ‘infrastructure improvements’ the Christie administration committed to with Baha Mar’s new owners, Chow Tai Fook Enterprises (CTFE).

The project’s Heads of Agreement requires the Government to “take measures to address the completion of a waste treatment facility to be operated by the Water & Sewerage Corporation that can provide useable brown water to the project”.

The Heads of Agreement gave the Government until December 31, 2017, to achieve this - a deadline which has now passed. This effectively relieves CTFE/Baha Mar of their obligations under the agreement, according to the document, although there has been no indication that the developer has invoked or acted upon this clause.’

“I didn’t want no part of that,” Mr Miller told Tribune Business yesterday of the Gladstone Road plant. “I stayed clear of that. That was too much for me to bear in the sense that I met it already in place. I stayed clear of that, to be honest with you.”

Reiterating that key decisions relating to the project had already been taken before he was appointed chairman, he added: “It was already there in 2016. I met it there. When I read the documents and saw what was going on, the Board made a decision that some serious action needed to be taken.

“We did no further disbursements to that company [contractor]. I objected to that with the permanent secretary, but the Ministry of Finance gave them the cheque. I told them: ‘I’m out of here; do what the hell you please. I was one of those things that didn’t make sense to me.”

Mr Miller was referring to events detailed in the EY report where “an unidentified government official” directed the Ministry of Finance to make a $1 million payment to the Gladstone Road plant’s contractor, Nassau Island Development Company, against the objections of himself and the Board, Water & Sewerage Corporation management and the Ministry of Works’ permanent secretary, Colin Higgs.

“This payment circumvented all internal controls of the Corporation and severely handicapped Water & Sewerage Corporation’s ability to adequately manage Nassau Island Development Company,” EY found.

“Further, because this $1 million payment was made directly from the Ministry of Finance, it is not included in the $17.3 million spend allocated to Gladstone Road Waste Water Treatment Plant on Water & Sewerage Corporation’s books and records, suggesting that the true cost to-date of the Gladstone Road Waste Water Treatment Plant is $18.3 million. This would result in a budget overrun of approximately 91 per cent for a non-operational asset.”

Mr Miller yesterday argued that the Board under the prior chairman, Lester Cox, had taken the decision to proceed with the project under Nassau Island Development Company.

“I don’t like those things where the Bahamian people are disenfranchised and forced to overpay,” he told Tribune Business. “If it’s not the best for the Bahamian people, Leslie Miller wants no part of it.

“Right from the start it went wrong, and if it starts wrong it’s going to end wrong. It made no sense. I don’t get involved in things that are not in the best interest of the Bahamian people and stayed clear of it.

“I wasn’t going to have may name associated with that project in any way, form or fashion. I suspected it was going to turn out that way. It started off wrong and ended wrong. It’s one of those things that shouldn’t have happened. I’m happy my name was not associated with it.”

EY said Water & Sewerage Corporation management took “little to no responsibility” for the Gladstone Road project, blaming the shortcomings and mismanagement on third-party engineers and consultants hired to oversee it on their behalf.