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‘No Deal Breaker’ Over Landfill Deal

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ENVIRONMENT Minister Romauld Ferreira.

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The Government expects to close the New Providence landfill’s outsourcing “imminently”, a Cabinet minister revealed last night, adding: “There’s no deal breaker.”

Romauld Ferreira, minister of the environment and housing, told Tribune Business that a contractual agreement with preferred bidder, the Providence Advisors/Waste Resources Development Group (WRDG) consortium, was “very, very close” to being sealed.

While the two sides still have several issues to resolve, Mr Ferreira said none of them “go to the fundamentals” of an agreement that will see the private sector group take over operational and managerial control at the Tonique Williams Highway site.

Describing the outsourcing as “a generational change” for Bahamian waste management, he added that completing the deal remained his ministry’s “number one priority” given that it will act as the “template” for reforming Family Island landfills once New Providence is finalised.

Negotiations have dragged on for more than two months’ longer than anticipated, Mr Ferreira having expressed optimism that commercial terms and other details could be agreed within 30 days when Providence Advisors/WRDG was unveiled as the preferred bidder on August 30 this year.

The minister, though, while confirming that negotiations are now being conducted between the Attorney General’s Office and the consortium’s attorneys, last night suggested the process had been extended because the Government was “breaking new ground” with the outsourcing.

“It’s still in the hands of the lawyers,” Mr Ferreira confirmed to Tribune Business. “There’s still an active back and forth trying to get a document they can all live with. That’s not finalised yet.

“We’re very close; they’re very close. It’s just a couple of issues they’re trying to iron out and, because it’s not been done before, they’re kind of breaking new ground in relation to this. Everything is new, so you’re going to get issues.

“There have been no deal breakers identified to me or mentioned to me. I anticipate we will come to an agreement both sides can live with and move forward. We are very determined to resolve these issues as soon as possible.”

Mr Ferreira added that he was “not going to look into the crystal ball” and predict when a deal with Providence Advisors, headed by Kenwood Kerr, and the multiple Bahamian waste management providers that form WRDG, will be concluded.

“There some other components of the proposal that had to be sussed out,” the Minister said, declining to identify them due to the sensitivity of the negotiations. “They are in the final stages and trying to come up with the right language so the obligations and outcomes are clear, and the expectations of both parties are encapsulated in a contractual agreement.”

Tribune Business sources suggested one issue previously dividing the two sides was the landfill’s “pre-existing liabilities”, which stem from its poor management under successive administrations over the past 40 years.

Speaking on condition of anonymity, they indicated the Government had initially sought to “transfer” these liabilities to the winning bidders - something it viewed as unreasonable and imposing and unwarranted cost/exposure before it even got started. This issue, though, is understood to have subsequently been resolved.

Providence Advisors/WRDG has previously described the landfill’s transformation as “one of the largest public-private partnership (PPP) infrastructure projects to-date” in The Bahamas, with its $130m proposal featuring a combination of recycling, renewable energy and improved management as the solution to Nassau’s waste woe.

The consortium intends to recycle and reuse “50 percent or more” of the landfill’s incoming waste streams, while 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).

The renewable energy and recycling initiatives are designed 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.

Other goals include 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.

And, adopting the landfill transformation model established in the US, Providence Advisors/WRDG will convert the site into “lush”, green surface vegetation that will facilitate the development of a mini golf course, fitness centre and ecology park that will all be open to the Bahamian public.

Mr Ferreira last night said his ministry has not wavered in its determination to see the New Providence landfill’s outsourcing through to completion, given the ongoing environmental and health risks it represents to nearby businesses and residents in areas such as Jubilee Gardens.

“I’m very determined, the Ministry of the Environment and Health is very determined and resolute to completing this as we regard this as a a very important track and path into effecting what we want to do,” he explained.

The Minister said the landfill’s efficient operation was “a critical thrust, platform and element” directly tied to the multiple clean-up campaigns underway in Over-the-Hill areas and elsewhere, as the extra waste needed to be disposed of and managed correctly.

“I expect both sides to come to an agreement imminently,” Mr Ferreira told Tribune Business. “But we have to appreciate this is a first for the country, and a generational change for the way landfills are managed and operated.

“This will serve as a template as we move through the Family Islands reforming landfills there. We are very determined on the landfill to negotiate that and get the contractual agreement up and running. That is the number one priority for the Ministry, and we have been focused on that from day one.

“We will continue to drive that forward. I saw the issues outstanding; they don’t go to the fundamentals of the agreement, but they need to be cleaned up. There’s no deal breaker.”

Among the issues to be agreed between the Government and Providence/WRDG is the length of the latter’s landfill lease, with the group preferring a long-term arrangement to enable it to hit its return on investment (ROI) targets and “recoup invested capital”.

Fees, charges and commercial terms also 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 be worked out, along with issues such as reporting and accounting mechanisms; equipment; security; and costs.

Besides the health and environmental risks, the ongoing threat of fires erupting at the landfill poses a risk to The Bahamas’ tourism product as the winds frequently blow the smoke towards resorts such as Baha Mar, Albany, SuperClubs Breezes and Sandals.

The Government first began exploring a private sector manager for the landfill during the last Ingraham administration, but its Christie government successor ultimately selected the failed Renew Bahamas group. It pulled out in the wake of Hurricane Matthew in October, forcing the Department of Environmental Health Services (DEHS) to take over the site again.

Comments

stocktonfuller 1 week, 2 days ago

They may sign the deal, but New Providence doesn't have the money to do the work

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