By NEIL HARTNELL
Tribune Business Editor
New Providence Development Company (NPDevCo) has told Tribune Business it has invested $53 million in the Bahamian economy via its water franchise and Old Fort Bay Town Centre venture, with an $8.2 million wastewater treatment facility “nearing completion”.
Alistair Henderson, NPDevCO’s president, in an e-mailed response to Tribune Business’s inquiries, confirmed to this newspaper that its 25-year exclusive water franchise for western New Providence had been signed by the outgoing government on May 7, 2012 - the general election date - but indicated that the timing was not politically-related.
Instead, Mr Henderson said the water franchise deal had been approved ‘in principle’ by the Ingraham administration’s Cabinet as far back as 2009, but the Water & Sewerage Corporation only gave its consent to the agreement in February 2012.
A further delay, he added, was caused by the time taken to conclude - and incorporate - the $14 million joint venture agreement between NPDevCo and BISX-listed Consolidated Water, the two companies having linked up as 50/50 partners to hold and operate the franchise agreement.
“The New Providence Development Company water franchise was approved in principle by Cabinet in 2009, the franchise agreement was approved by the Water & Sewerage Corporation in February 2012, and signed by Government on May 7, 2012, once incorporation of the new franchise company, a joint venture between NPDevCo and Consolidated Water was completed by the attorneys,” Mr Henderson said.
Explaining the rationale for the agreement with Consolidated Water, he added: “NPDevCo has operated a franchise servicing its real estate customers since incorporation in 1962, and has produced and distributed potable ground water from its extensive wellfields.
“Population growth in the area, particularly over the past decade, has strained those resources, necessitating a search for alternative sources of quality potable water to augment and improve existing supplies.
“The new agreement represents a further significant investment in the Bahamas by New Providence Development, and will result in high quality, reliable potable water for all homes in the area, for Bahamian and second home investors alike, and the creation of additional employment opportunities for Bahamians.”
Speaking to Tribune Business last week, Rick McTaggart, Consolidated Water’s chief executive, said the joint venture in which his company has a $7 million stake would add to its retail and business portfolio.
“We’re going to provide technical support,” he said of the BISX-listed firm’s involvement in the joint venture. “We have a lot of expertise ourselves in the retail business here in Grand Cayman, and that combined with the experience New Providence Development has will be a big positive for customers in the area. We see a lot of potential.”
While declining to disclose any financial projections for the water franchise joint venture, Mr McTaggart told Tribune Business: “We think it will be a reasonably profitable business. The rates for the area are quite reasonable compared to other jurisdictions.”
The Consolidated Water chief confirmed that the western New Providence water franchise would generate “some jobs”, with the partners aiming to install equipment to improve water quality in the area. That, he added, would create both construction and full-time employment.
Confirming that the water franchise’s potential earnings would grow with, and were contingent upon, further real estate development in New Providence via communities such as Lyford Hills, Serenity and Charlottevile, Mr McTaggart added: “There’s always the risk when you get into new businesses.
“If the economy isn’t growing and there’s no development, that affects the amount of water we will sell...... We’re prepared to put in the money and take the risk to invest in the area, and will have to see how things develop over time.”
And he told Tribune Business: “In terms of revenues and gallons per day, the Bahamas is the majority of our business now, so it will add to that.
“We stand ready to meet any needs, pursue any new business opportunities there that present themselves. We think we have a great track record in the Bahamas, have been a good business partner for the Water & Sewerage Corporation, and they rely on us quite a bit now. We’d definitely like to grow the business when opportunities present themselves.
“Technically, the businesses are challenging there, but we really enjoy doing business in the Bahamas. It’s a really friendly business environment. We’ve had very positive feedback from the Government and the Water & Sewerage Corporation.”
Meanwhile, Mr Henderson said NPDevCo was “nearing completion” of its $8.2 million wastewater collection system and treatment plant for its western New Providence franchise area.
He added that this would “provide first world waste disposal technology, and lead to the reduction of health risks and to the protection of the aquifer from an ongoing risk of pollution”.
Together with the $14 million water joint venture, the $30 million Old Fort Bay Town Centre and $8.2 million wastewater treatment plant would take NPDevCo’s investment in western New Providence to a collective $53 million, Mr Henderson said, “creating new jobs and opportunities for Bahamians”.
NPDevCo itself employed 80 Bahamians in its operations, and Mr Henderson said of its Old Fort Bay Town Centre: “Following the successful opening of Solomon’s Fresh Foods in late 2011, the first phase of the retail store section of the Town Centre, comprising 10 stores, is nearing completion, with tenants starting to install their interior build-outs.
“These stores will be open during the months of June and July. Phase one includes two restaurants, a pharmacy, a liquor store, two designer clothing boutiques, a travel agency, a home automation store, a furniture and accessories store, and an art gallery. The second phase of 10 stores is under construction and is scheduled for opening by Christmas.”
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