The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The Government has slashed the debts owed by the Water & Sewerage Corporation to its main supplier by almost 30 percent or $6.3m during the first nine months of 2022.

BISX-listed Consolidated Water, in filing its 2022 third quarter results with the US Securities & Exchange Commission (SEC), revealed that the debts owed by the state-owned water distributor have been cut from $21.5m at year-end to $15.2m at end-September 2022.

The Blue Hills and Windsor reverse osmosis plant operator, which supplies all the water consumed by the Corporation’s New Providence customers, said in its 10-Q filing: “At December 31, 2021, Consolidated Water (Bahamas) accounts receivable balances (which include accrued interest) due from the Water and Sewerage Corporation amounted to $21.5m.

“From time to time, Consolidated Water (Bahamas) has experienced delays in collecting its accounts receivable from the Water and Sewerage Corporation. When these delays occur, the company holds discussions and meetings with representatives of the Water and Sewerage Corporation and the Government and, as a result, payment schedules are developed for Water and Sewerage Corporation’s delinquent accounts receivable.

“All previous delinquent accounts receivable from the Water and Sewerage Corporation, including accrued interest thereon, were eventually paid in full. Based upon this payment history, Consolidated Water (Bahamas) has never been required to provide an allowance for doubtful accounts for any of its accounts receivable, despite the periodic accumulation of significant delinquent balances,” the BISX-listed reverse osmosis plant operator continued.

“In February 2022, Consolidated Water (Bahamas” received correspondence from the Ministry of Finance of the Government of The Bahamas that set forth a payment schedule providing for the gradual reduction over the course of 2022 of Consolidated Water (Bahamas) delinquent accounts receivable due from the Water and Sewerage Corporation.

“Such correspondence also indicated that the Government intends to return all of Consolidated Water (Bahamas) accounts receivable from the Water and Sewerage Corporation to current status. As of September 30, 2022, Consolidated Water (Bahamas) accounts receivable from the Water and Sewerage Corporation amounted to $15.2m.”

However, for the three months to end-September 2022, Consolidated Water’s “interest income decreased by approximately $112,000 compared to 2021 primarily due to the decrease in Consolidated Water (Bahamas) accounts receivable balance”. The company also saw repairs and maintenance costs at its Bahamas operations jump by $361,000 during the 2022 third quarter.

“Bulk segment revenue was $8.668m and $6.868m for 2022 and 2021, respectively. The increase in bulk segment revenue is attributable to an increase in energy costs for Consolidated Water (Bahamas), which increased the energy pass-through component of Consolidated Water (Bahamas) rates,” the BISX-listed water supplier said. The volume of water sold to the Water & Sewerage Corporation also increased by 4 percent.

“Our contracts to supply water to the Water & Sewerage Corporation from our Blue Hills and Windsor plants require us to guarantee delivery of a minimum quantity of water per week. If the Water & Sewerage Corporation requires the water and we do not meet this minimum, we are required to pay the Water & Sewerage Corporation for the difference between the minimum and actual gallons delivered at a per gallon rate equal to the price per gallon that Water & Sewerage Corporation is currently paying us under the contract.

“The Blue Hills contract expires in 2032 and requires us to deliver 63m gallons of water each week. The Windsor contract expires in 2033 and requires us to deliver 16.8m gallons of water each week.”