September 20, 2020

Nassau Government offers $9M ‘funding’ to Cayman Islands provider WSC

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The government has provided the Water and Sewerage Corporation (WSC) with “additional funding” of $9 million in an effort to keep its receivables below 90 days.

The disclosure by Glen Laville, the general manager of WSC, comes shortly after Consolidated Water revealed in its quarterly report. The former Free National Movement (FNM) administration chipped in $6.3 million last month to help reduce a $8.2 million debt to the Cayman Islands-based provider. Laville said the additional $9 million will go a long way to finishing off the balance and getting WSC back on track.

“We got about $9 million from the previous government, and that is being paid on a monthly basis. It keeps the payments flowing,” Laville told Guardian Business.

Despite the ongoing debt, The Bahamas remains an excellent source of business for Consolidated Water.

Bulk segment revenues rose nearly $3 million in the first quarter, up to $10.1 million from $7.2 million in the previous year. One of the main reasons behind the rise was a “34 percent increase in the number of gallons of water sold, which was primarily attributable to the expansion of our Blue Hills plant in The Bahamas during the fourth quarter of 2011”, the report said.

The amended agreement between WSC and Consolidated Water increased the production capacity of the Blue Hills Plant to 12 million U.S. gallons per day.

WSC is required to purchase a minimum of 63 million U.S. gallons per week.

“The performance of our bulk water segment reflects, to a large degree, the increase in water volumes resulting from a 67 percent expansion in the production segments of our Blue Hills plant in The Bahamas that came onlie in the fourth quarter of 2011,” said Rick Taggart, CEO of Consolidated Water. “As a result of this expansion, The Bahamas now represent the company’s largest geographic market, when measured in terms of the volume of water produced and devliered to customers.”

However, in terms of the overall financial health of WSC, Laville said it was “not as good as it should be”. The managing director is looking to the $83 million loan from the Inter-American Development Bank, signed off on last year, to help the corporation turn the corner.

WSC has hired Miya, an Israeli firm, to perform a revamp of New Providence’s underground water system. It is estimated that the country loses millions upon millions of dollars each year in water leakages. Miya has been entrusted to reduce these leakages by 50 percent over the next five years.

Laville said executives from the foreign company will be on the ground beginning this week, performing a baseline survey and ultimately preparing for excavation in January 2013.

“We have had a lot of preliminary meetings in terms of how the project will be implemented,” he said.

“Now they will look at our distribution system in more detail and try to determine the actual levels of water loss and develop a strategy.”

Laville reports that Miya has already started employing Bahamians for the project.

He said employment opportunities will continue to “ramp up” throughout the year, as the company gets closer to full-scale excavations to identify and fix the leakages. Also linked with the IDB loan, he added, is using some of that $83 million for “institutional strengthening”, which should eventually pay dividends for WSC on its path to financial health.

Restructuring, reorganization and training are buzz words for the corporation.

As first reported by Guardian Business, WSC is still accepting bids for at least two waste-water treatment facilities, Laville told Guardian Business.

The IDB has extended the deadline for companies to apply for the contracts. Private firms would also be brought on for both its construction and ongoing operation

“We are still in the expression of interest phase. The IDB, in terms of their requirements, have been flexible with the deadline. If someone warns to submit today they can. We have not short listed,” he said.

For more on this story go to The Nassau Guardian

www.thenassaugardian.com

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