The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The Free National Movement’s (FNM) chairman yesterday branded the concept of taxing private well owners as “absurd” as the Prime Minister ruled out any such move or raising water tariffs for Bahamians.

Dr Duane Sands told Tribune Business that the Government must “leave my well alone” given that it is adding “no value” to private well owners who have invested their own funds and resources in establishing their own water supply.

He spoke out as Philip Davis KC, in a video filmed in New York where he is attending United Nations (UN) and other meetings including events related to climate change, went further than the Cabinet minister responsible for the Water & Sewerage Corporation by emphatically ruling out any increase in prices charged by the latter or taxing private well owners.

“There’s no intention of government to raise water rates at any time, nor will we be taxing wells. In fact, the recommendations have been made many, many years for the taxing of wells dating back to the Pindling administration and increasing of water rates dating back to the Pindling administration. We do not intend to do either, tax wells or raise water rates,” he said.

This goes further than Leon Lundy, minister of state in the Prime Minister’s Office, who told Tribune Business on Sunday that “no formal decision” had been taken on these proposals that are included in the Water & Sewerage Corporation’s 2023-2028 business plan. He confirmed, though, that the proposals were genuine and in “in the early phases” of being considered within the Government.

“We acknowledge the recommendations from the IDB regarding potential changes to The Bahamas’ water regulatory regime and are taking them into consideration,” Mr Lundy said, although the recommendations actually came from the Water & Sewerage Corporation itself and were disclosed in an Inter-American Development Bank (IDB) report.

“However, it is important to note that these suggestions are still in the preliminary stages, and no formal decisions or reviews have been finalised at this time. As with many of the IDB’s reports for various countries, these proposals are advisory in nature and are not mandates. We are currently in the early phases of assessing their potential impact, and discussions have yet to move forward on any specific measures.

“At this stage, there are no details available on tariff adjustments, taxes or implementation timelines. Should these recommendations progress further, they will require extensive review and consultation, including approval from the Cabinet, to ensure alignment with national policies and priorities.”

Mr Davis, though, yesterday seemingly cut-off any further discussion by stating it will not happen. This is not the first time he has clarified, or gone further, than one of his Cabinet ministers in ruling out policy action as he reacted in similar swift fashion in April 2022 to rule out any National Insurance Board (NIB) contribution rate increase after then-minister responsible, Myles Laroda, said a rise was likely within a year.

That increase was eventually forthcoming two years later when it could not be delayed any longer, but Mr Davis - with a general election now less than two years away - moved quickly to contain any fall-out knowing the negative political consequences from any talk of price rises and/or new and increased taxes. Tribune Business, though, never reported that these had been agreed.

Dr Sands, meanwhile, rejected the whole concept of “setting property taxes on private wells” as stated in the Water & Sewerage Corporation’s business plan. “I think that is absurd,” he told Tribune Business. “What are you taxing them for?

“What value has the Government contributed to me having a well? Are they chlorinating my well water? Are they adding water softener to it? No. Leave my well alone.... I think that the Water & Sewerage Corporation finds itself in a tough spot right now, but adding additional charges, taxes and levies on the backs of Bahamian consumers is out of the question....

“Bahamians, previously considered middle class Bahamians, are struggling to make ends meet as a result of the cost of living rise. We need to pay attention to how much resources there are in the pocket books of the average Bahamian, and right now there is not much of anything,” the Opposition chairman added.

“The 25 cent per gallon margin increase for petroleum retailers may not mean much to the Prime Minister, but for the average Bahamian trying to get their children to school and get to work, when you add in some of the highest electricity rates in the world and look to add to the cost of water, what’s he supposed to do? There’s a limit to how much people can afford, and we passed that a long time ago.”

One private sector source, speaking on condition of anonymity, told this newspaper that the Water & Sewerage Corporation has become increasingly frustrated at the loss of valuable revenues due to homeowners and businesses who invest in their own wells.

“You either buy the water from the Government monopoly or pump the water out of the ground,” they said. “If you pump the water out the ground, you get it for free. They want everyone to pay for water. That’s their goal and that’s their issue. They’re looking to tap into the fact that a lot of individuals and companies go into their back yard and sink their own well.

“That’s a huge leakage from their revenue source because everyone’s bypassing them with their own wells. People simply bypass the Water & Sewerage Corporation, get a connection and pay the minimum $35 fee every three months but never use the water. That’s the big, huge problem that they face.”

And, by ruling out any increase in water tariffs or tax on private wells, Mr Davis is signalling that the Government is content to let the Water & Sewerage Corporation status quo remain. “

“Because of its poor operating efficiency and tariffs that are not sufficient to cover costs, the Water & Sewerage Corporation relies heavily on increasingly greater subsidies from the Government to cover some of its operating expenses and nearly all its capital investments,” the IDB said of the consequences of such action.

“Increasing the efficiency of collections could improve its cash flow and lessen its reliance on subsidies from the Government. Operating subsidies were $55m in 2022.” The Water & Sewerage Corporation’s reverse osmosis suppliers have also consistently complained about unpaid bills and multi-million dollar arrears due to them that they are having to carry on their balance sheets.

BISX-listed Consolidated Water, which supplies the Corporation and all its New Providence customers with water from its two reverse osmosis plants, Blue Hills and Windsor, in its most recent financial filings has pegged these arrears at around $25m-$26m.