The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The Water & Sewerage Corporation will likely follow other utilities in right-sizing its workforce through voluntary separations, its chairman revealing yesterday: “All options are on the table.”

Adrian Gibson told Tribune Business that while the Corporation had yet to reach this point, there was “no doubt” it will have to restructure and reorganise in a bid to align its staffing and cost base with revenues and future needs.

Unveiling some of the Corporation’s plans for advancing beyond the highly-publicised findings of its recent forensic audit, Mr Gibson said part of this strategy involved closer collaboration with other utilities - especially Bahamas Power & Light (BPL).

He disclosed that the Corporation’s Board held a joint meeting with its BPL counterpart on December 7 last year, with others to follow, as the two sides discussed ways to improve efficiencies and generate customer savings.

Mr Gibson said some of the areas explored included repair works co-ordination; a shared “one-stop” customer service centre; collaboration on the installation of automated meters; and the potential for facilities and infrastructure sharing.

The Long Island MP said the Corporation was also aiming to slash its billing cycle from three months to two, in a bid to tackle its long-standing accounts receivable problems caused by delinquent and non-paying customers.

Pledging that areas with high customer defaults will be targeted for disconnections, Mr Gibson said the Corporation’s forward-looking focus does not mean it has forgotten - or can forget - the past.

He reiterated assertions by Desmond Bannister, minister of works, that the findings of Ernst & Young’s (EY) ‘forensic’ audit into the Corporation’s recent past would lead to legal action. Declining to provide details, Mr Gibson told Tribune Business to “stay tuned”, pledging that the Corporation will “seek recourse for any losses incurred” on a Gladstone Road Wastewater Treatment Plant that is still to be completed despite already suffering a 91 per cent cost overrun.

Describing that project as “an albatross” for the Corporation, the chairman said it could no longer be a refuge for politicians and others to “stack cronies and ignore basic business principles.”

With the Water & Sewerage Corporation having accumulated more than $150 million in total net losses during its history, and annual taxpayer subsidies reaching as high as $30 million in recent years, Mr Gibson indicated tough decisions will ultimately have to be taken to make it profitable.

“The reality is that as we move forward we will have to restructure and reorganise Water & Sewerage. All options are on the table on that,” he told Tribune Business. “Consideration will likely be given to voluntary separation packages (VSeps), no doubt.”

Mr Gibson, though, emphasised that “we haven’t come to that point yet”, with the Corporation and its Board focused instead on “trying to get operations streamlined and more efficient, and improve the customer experience”.

To achieve the latter, the chairman said the Corporation was targeting better customer call management and responses; improved revenue measures and collection enforcement; being more proactive in dealing with, and managing, delinquent payers and accounts receivables; and “improved adherence to financial systems and procurement controls”.

“I’m putting policies in place with respect to anti-corruption, a new procurement and tendering policy, and any number of policies we’re currently working on,” Mr Gibson said, adding that improved due diligence on vendors and contractors will also be required.

Despite sharing a common owner in the shape of the Government, Bahamian utilities have often been criticised for failing to work together - something which, according to Mr Gibson, the Minnis administration plans to change.

Pointing to the close business and friendship links between BPL and Water & Sewerage Corporation Board members, Mr Gibson said a follow-up joint Board meeting will likely be held soon after the inaugural event on December 7.

Among the obvious potential collaborations identified by Mr Gibson is the co-ordination of repair work by the utilities so that the same stretch of road is not dug up repeatedly, causing frustration and extra costs for the Bahamian public.

“We are taking a collaborative approach to working together to try and co-ordinate where and when work is being done,” he explained, suggesting that the utilities could seek to share road resurfacing and equipment rental costs to cause “less stress for the Bahamian people”.

Mr Gibson revealed that other shared interests identified at the initial BPL/Water & Sewerage Board meeting included the creation of a “one-stop customer service centre” and sharing the costs of installing automated meters as both utilities are “going down this road”.

“While these things were only spoken to and have yet to materialise, they are all conversations for exploration and further discussion,” he added. “These synergies make sense.”

Sharing fuel, and related shipping costs, in relation to supplying Family Island operations were identified as another potential area for BPL/Water & Sewerage co-operation. And, with the Corporation “considering the attributes of solarising” many reverse osmosis plants in the Family Islands, the possibility exists to supply excess energy back to the BPL grid.

In the meantime, Mr Gibson said Water & Sewerage Corporation customers can look forward to “improved services and timely billing”, revealing that it was seeking to cut the existing billing period from three to two months.

“The lengthy period between when bills come out and persons pay, we’re going to close that gap,” he told Tribune Business. “We’re going to have a renewed focus on particular areas of New Providence and the Family Islands where there are delinquencies, and where such things arise they will be disconnected because of lack of payment.

“The Corporation has to function.... You’re talking about an entity with an accumulated deficit of $150 million. We’re trying to reduce that deficit and move the Corporation to profit. There are various avenues we are going to explore.”

But, amid the future focus, Mr Gibson said the Corporation will not forget the EY audit findings, especially those on the Gladstone Road treatment plant whose costs have soared from an original $9.6 million budget to $18.3 million at last count.

Further capital investment is required to complete the plant, which is supposed to treat Baha Mar’s wastewater and return it to irrigate the $4.2 billion project, and was highlighted by the audit as an example of how politically-motivated interference and mismanagement have cost the Corporation and Bahamian taxpayers millions of dollars.

Besides the capital loss on the wastewater plant’s construction, every day it remains unfinished costs the Water & Sewerage Corporation significant revenue and operating losses. This is because the Corporation is having to pay a non-completion ‘penalty’ to Baha Mar by supplying it with heavily discounted water to irrigate the Cable Beach development.

“The Gladstone Road plant and the issues connected there-to have been one of the greatest tragedies for the Water & Sewerage Corporation,” Mr Gibson told Tribune Business yesterday. “It’s been an albatross, but it has so much potential in terms of how sewage is treated and also the benefits to the Corporation’s bottom line.

“In the coming days you’ll hear more with regards to the Board’s position in respect of getting some resolution with respect to the Gladstone Road plant, and legal action arising out of the audit report.

“At this point I’m not going to say more, but I can tell you we will address it and we will seek recourse for any losses incurred. I would say: Stay tuned.”

Pointing to politically-motivated interference as the root cause of the Corporation’s problems, Mr Gibson added: “Water & Sewerage needs to be run like a business. It shouldn’t be a place where cronies are stacked and basic business principles are ignored for the sake of expediency.

“For any business to survive it must move to right-sizing, streamlining and profitability.”