By NEIL HARTNELL
Tribune Business Editor
nhartnell@tribunemedia.net
The Water & Sewerage Corporation is confident 2014 will be “the real banner year”, as it targets a further one million gallon per day reduction in water losses and the release of $15 million in construction contracts.
Glen Laville, the Corporation’s general manager, yesterday told Tribune Business that while it was seeing the initial benefits of its 10-year restructuring programme through a reduction in overtime hours and other improved indicators, these had yet to show in its financial position.
Suggesting that the dollar savings might start to emerge in the 2014 second quarter, Mr Laville expressed optimism that Miya, the international company contracted to slash the Corporation’s water losses (non-revenue water), would achieve a further one million gallon per day reduction by year-end.
Acknowledging that the Corporation wanted to make “a little headway” on the other parts of its turnaround plans, Mr Laville told this newspaper that some $15 million worth of construction contracts to upgrade its wastewater treatment systems would be sent out to bid by the fourth quarter.
And he added that a consultant, who will draft the blueprint for overhauling the water industry’s legislative regime and transferring economic regulation to the Utilities Regulation & Competition Authority (URCA), is likely to be hired by next month.
The Water & Sewerage Corporation’s 10-year restructuring programme is largely being financed by an $81 million loan from the Inter-American Development Bank (IDB), and Mr Laville said 2013 was the first year of its implementation/execution.
Noting that the Corporation was losing - before supply reached its customers - about 56 per cent, or some 6.9 million gallons out of the 11.5 million gallons it pumps around its distribution system daily, the general manager said Miya had already made inroads into this drain.
“They’ve already reduced non-revenue water by 0.5 million gallons per day,” he told Tribune Business. “We’re going in the right directions, and have met targets to-date.
“The target for this year is to reduce it by another one million gallons per day..... They [Miya] met their targets last year, and expect them to meet their targets this year.”
Mr Laville added: “We can see and feel the benefits, but the end of this year will be the real banner year. To have a reduction of one million gallons per day will have a profound effect on our ability to supply customers, the reliability and efficiency of supply.
“The success of the first year bodes well for the rest of the project.”
Mr Laville said the ultimate goal is to reduce the Corporation’s non-revenue water losses to 2.5 million gallons per day within five years, a timeline that gives it until 2016/2017 to hit this target.
This represents a loss reduction of some 4.4 million gallons per day, and Mr Laville told Tribune Business that the five-year plan was to get non-revenue water losses to “under 20 per cent” of its total supply - at around 15-19 per cent.
He added that the Water Corporation wanted to reduce non-revenue water losses to two million gallons by the project’s seventh year, emphasising that achieving this was vital to its financial health.
Reducing water losses and leakages, Mr Laville explained, would enable the Corporation to reduce the volume and value of the water it had to purchase from private reverse osmosis suppliers, chiefly BISX-listed Consolidated Water.
And, while its costs go down, with more water reaching Bahamian household and business consumers, the Corporation should also see an improvement in its top-line revenues - something that should eventually filter down to the bottom line and reduce taxpayer subsidies that peaked at over $32 million in 2011.
“All these things are having an effect,” Mr Laville said. “They are designed to wean the Water & Sewerage Corporation off government subsidies, and make us a financially and operationally viable Corporation. We have to address multiple areas for the Water & Sewerage Corporation to stand on its own.”
Mr Laville said numerous controls implemented by Miya had given the Corporation a better grip over its distribution system, with technology upgrades enabling it to monitor pumping stations and get daily reports on water pressure and stability.
This, he added, had enabled the Corporation to both prevent and more rapidly detect system leaks, resulting in a reduction in repair and maintenance costs.
“We’ve already seen some improvements in how overtime is going. We may not see it [in the financials] in 2013, but we expect to see it in 2014,” Mr Laville told Tribune Business.
“We’re seeing it from an operational standpoint, the number of overtime hours that are coming in, and the number of repairs they have to do in the system.
“That’s something we’ll really start to see, maybe around the second quarter. We’re seeing it from an hours standpoint, but want to see it from a dollars standpoint.”
With non-revenue water progress underway, Mr Laville said the Corporation was now turning its attention to overhauling its wastewater treatment systems and the sector’s regulatory framework.
With the $1 million contract for a new wastewater treatment development strategy just signed with external consultants, Mr Laville added: “Out of that will come $15 million of construction work to improve treatment plants, sewerage systems, lift stations, sewer mains.
“The consultancy is a 12-month consultancy and started in January, but with some of the urgent and critical infrastructure, we want to send that out as early as possible.
“Hopefully by the last quarter of the year we will send out some for procurement.”
Mr Laville said Bahamian contractors would be given every opportunity to bid on these contracts, adding that the Corporation was poised to issue another consultancy contract for sector regulatory reform.
Those hired, he explained, will be charged with developing a draft framework for URCA to take over the water industry’s economic regulation, with Ministry of the Environment agencies shouldering responsibility for the environmental aspects.
Mr Laville said this was designed to “strip the Water & Sewerage Corporation of the regulatory powers it now holds”, removing the conflict stemming from it also being the industry’s main player and operator.
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