By NEIL HARTNELL
Tribune Business Editor
Ordinary Bahamians may be able to invest in the $130m "transformation of an ongoing nightmare" within three to five years, the winning New Providence landfill bidder said yesterday.
Kenwood Kerr, Providence Advisors' chief executive, told Tribune Business that his consortium was "potentially" open to an initial public offering (IPO) "once we get through the cycle" of executing on its renewable energy, recycling and management strategies.
He described the overhaul planned by his group, which also features multiple Bahamian waste management providers in the Waste Resources Development Group (WRDG), as "one of the largest public-private partnership (PPP) infrastructure projects to-date" undertaken in this nation.
Besides remediating the toxins leaking from the landfill's existing cells, Mr Kerr said the Providence Advisors/WRDG consortium as aiming to reach the global standard of fires erupting "once every 200 years" as part of plans to convert the Tonique Williams Highway site into the New Providence Ecology Park.
Adopting the landfill transformation model established in the US, he disclosed that the site's conversion into "lush", green vegetation on the surface will facilitate the development of a mini golf course, fitness centre and ecology park that will all be open to the Bahamian public.
To generate the necessary revenues and cash flow, Mr Kerr said Providence Advisors/WRDG intend to recycle and reuse "50 percent or more" of the landfill's incoming waste streams. And 30 Mega Watts (MW) of renewable energy, split evenly between solar and biomass, will be sold to Bahamas Power & Light (BPL) through a power purchase agreement (PPA).
He explained that the renewable energy and recycling initiatives will enable the consortium to extend the landfill's life by a further 34 years to 2052, as they will consume large quantities of incoming waste, while also providing the necessary breathing room to deal with the site's present mountains of garbage.
Mr Kerr said the consortium's plans called for the creation of 75 long-term jobs, and the reduction of annual greenhouse gas emissions by 220,000 tonnes of carbon dioxide per year - an amount equivalent to 37,000 automobiles' emissions.
Pledging that the necessary financing was in place, the Providence chief pledged that communities surrounding the landfill would "feel change we believe will be very significant" given the consortium's plans for "a quick start".
He conceded to Tribune Business, though, that there was "not an immediate resolution to all the ills at the landfill", with the Providence/WRDG start date dependent on how quickly it can conclude contractual and commercial terms with the Government.
The consortium now has seven days to accept the Government's Letter of Award, with both Mr Kerr and Romauld Ferreira, minister of the environment and housing, expressing optimism that commercial terms and other details could be agreed within a further 30 days.
"We want to see the terms and conditions of the award so that we can develop a finalised contract," the Providence Advisors chief explained, adding that the consortium had already identified a potential Board of Directors comprised of persons drawn from the community, Government, private sector and environmental activists.
"We have a team ready and waiting to be mobilised within the next 30 days, a team on the ground dealing with the low-hanging fruit, operations at the landfill..... We're travelling several paths to a very quick start so the community can experience and feel change we believe will be very significant at the landfill site.
"It's a lot of stuff, you will see bodies on the ground in 30 days. Our expectation is to complete the contract in a 30-day period."
Among the issues to be agreed between the Government and Providence/WRDG is the length of the latter's landfill lease, with Mr Kerr yesterday indicating the group would prefer a long-term arrangement to enable it to hit its return on investment (ROI) targets and "recoup invested capital".
Fees, charges and commercial terms will have to be determined, along with the date the Department of Environmental Health Services (DEHS) will handover/turnover the landfill to the consortium. The transfer of any employees will also have to be worked out, along with issues such as reporting and accounting mechanisms; equipment; security; and costs.
Mr Ferreira described the upcoming negotiations with Providence/WRDG as "where the rubber meets the road" and "another step "on the journey we're taking together" towards a formal PPP, describing the landfill's pending handover to a 100 percent Bahamian-owned manager as "a truly watershed moment" for the Bahamas.
He described the New Providence landfill as "the biggest environmental challenge facing the Commonwealth of the Bahamas" due to the environmental and health hazards it poses, especially to Jubilee Gardens and other nearby communities, as a result of fires and the frequent release of gas and other toxins.
Mr Ferreira said the facility's size, risk and location in the middle of New Providence was especially problematic because "with the prevailing wind it can affect the entire island". The Government, and its predecessor, have also come under increasing pressure from the likes of Baha Mar, Albany and other high-end communities and resort developments to resolve the landfill's woes, with the former's Heads of Agreement having required that a solution be in place by year-end 2017.
Mr Kerr yesterday disclosed that Providence/WRDG's waste-to-energy and renewable plans accounted for more than half its proposal's estimated costs, with remediation and operations set to require around $50m of the total $130m.
"The operations, remediation and management of the landfill, and putting in all the infrastructure to do it properly, in our technical submissions to the Government as a number that stretched from $47m to $54m," he said.
"Linked to that project is a conservatively-sized renewable energy infrastructure, a power plant in English-speaking terms, a very small-sized power plant estimated at $70m. That power plant is a combination of solar and biomass."
The latter's fuel will come from the landfill's incoming waste streams, but Mr Kerr said the consortium would need to satisfy both Bahamas Power & Light's (BPL) and the Utilities Regulation and Competition Authority's (URCA) requirements before it could sell the energy produced to the former's grid.
This means Providence/WRDG will need to reach a Power Purchase Agreement (PPA), which sets out the price for its energy and other commercial terms, with BPL, while also gaining status as an Independent Power Producer (IPP).
Mr Kerr, meanwhile, said the group already possessed the funding "to move forward in earnest" with its plans once the contract was agreed with the Government. His firm, Providence Advisors, as an investment bank has already been raising financing from institutional investors that has been placed into escrow until commercial terms are known, so it can be released.
"We are not concerned about funding," Mr Kerr added, disclosing that Providence/WRDG was obtaining its financing from "100 percent" local sources. "Not to be presumptuous but before we embarked on this process we had identified the funding."
The Providence Advisors/WRDG consortium features waste management providers such as United Sanitation and Waste Not. It had to beat off competition from BISX-listed Bahamas Waste and its partner, Bahamas Hot Mix, plus the Bahamas WTP group, who were the last two remaining rivals for the landfill bid.
Apart from Bahamas permanent resident, Fay Russell, Bahamas WTP's principals included Cedric Scott, the actor, producer and uncle of former Cabinet minister, Jerome Fitzgerald, and banker Ivylyn Cassar, whose Equity Bank & Trust acts as the company's physical address in western New Providence.
The consortium also featured two US companies, Delaware-incorporated Ameresco Ltd and Louisiana-based Furnace and Tube Services Inc. Ameresco is a financier and developer of energy efficiency and conservation projects, while Furnace and Tube Services provides engineering design, installation and maintenance.