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$130m Landfill Deal ‘In The Last 50 Yards’

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

A Bahamian consortium yesterday said it is “in the last 50 yards of the journey” to take over management of New Providence’s landfill, and pledged: “We will not, and must not, fail.”

Henry Dean, head of the Waste Resources Development Group (WRDG), told Tribune Business that “all the major issues” had now been agreed with the government, and the two sides were just “cleaning up the language” and addressing “the formalities” of their contractual relationship.

Suggesting that an announcement on the deal may come as early as the end of this week, Mr Dean said the consortium planned to “make The Bahamas proud” despite acknowledging the “huge challenge” it faces on remediating a major environmental and health hazard for New Providence residents.

He added that WRDG, a consortium of local waste services providers, hoped to act as trailblazers by paving the way for other, “younger” Bahamian groups to benefit from future private-public partnership (PPP) opportunities with the government - especially if it was successful.

WRDG, which has partnered with Providence Advisors, the Bahamian investment house headed by Kenwood Kerr, was selected as the preferred bidder to take over the landfill’s operations - and effect a $130m transformation of the site - in late August 2018.

Both the government and winning bidder voiced optimism that contract negotiations would be concluded within 30 days, meaning that a deal would be sealed by end-September/early October 2018. However, the talks have dragged on for a further four-and-a-half months, but Mr Dean yesterday said there were no remaining obstacles and suggested a conclusion was imminent.

“There are no problems,” he told Tribune Business. “There are no problems with the government, no problems with us. We’re at the stage of tidying up the language, crossing the ‘t’s’ and dotting the ‘i’s’, and we expect that in a couple of days we will have it all sorted out.

“We are just outside the door. We are in the last 50 yards of the journey. It’s going to happen very, very soon. We’re just making sure all the things are in place so that when we execute there will be no problems, no push back.”

Mr Dean said all key issues involving Providence/WRDG’s obligations, the commercial terms, what is expected of them, and the relationship with the government had been resolved, paving the way for both sides to seal a deal that he expects to happen imminently.

“We’ve done everything we have to do on our side,” added the United Sanitation principal. “It’s just the formalities, cleaning up the language. All the major issues have been decided and agreed. By the end of the week we should be able to make an announcement. It’ll provide the timing for the takeover and everything else.

“It’s right there. We are extremely elated and pleased with the Government for affording us this opportunity to take over such a huge challenge. We will do all that we can.... to satisfy our obligations and make the country proud of what we do.

“We believe that if we are to be successful it will speak well to the possibility, and probability, of other groups of Bahamians - more so younger Bahamians - being given these kinds if chances.”

Mr Dean said the Bahamian members of the WRDG group had been waiting for their landfill opportunity “for almost 20 years”, adding that “it will certainly be a celebration for us” when talks with the Government conclude and the handover date is set.

“We must give the Minnis administration huge compliments for what they are doing,” he told Tribune Business. “We will not fail at this task. We will not, and must not, fail at this task.

Tribune Business understands that representatives for the Providence/WRDG group met with government officials, and members of its negotiating committee, last Thursday to iron out and settle any outstanding issues with the proposed landfill contract.

This is thought to have largely been accomplished, finally opening the way - as suggested by Mr Dean - for the Tonique Williams Highway site’s management and control to be transferred to an operator that is 100 percent Bahamian owned.

Tribune Business understands that establishing the correct site boundaries for the landfill was one issue that took some time to complete. This newspaper has also reported that the landfill’s “pre-existing liabilities”, which stem from its poor management under successive administrations over the past 40 years, had caused further complications.

The Government had initially sought to “transfer” these liabilities to the winning bidder - something that Providence/WRDG viewed as unreasonable, and imposing and unwarranted cost/exposure, before it even got started. This issue, though, is understood to have subsequently been resolved.

However, Romauld Ferreira, minister of housing and the environment, has not returned multiple Tribune Business calls and messages for several days seeking comment on the status of landfill negotiations.

Sources familiar with developments, speaking on condition of anonymity, said that the lengthier-than-expected negotiations had caused some anxiety for the Providence/WRDG team as it had to incur additional, unplanned expenses. Closing the financing for its $130m plan will also likely depend on completing talks, and obtaining a binding deal, with the Government.

Besides having to pay to keep its team of consultants and specialists together, the consortium is also understood to have conducted extra engineering and other studies at the landfill site, and financed sample testing, while waiting to finalise the deal.

“They’ve very anxious over this holding pattern because it’s causing extra expense,” one source told Tribune Business. “They’re having to pay people to wait so they do not go elsewhere.”

Providence/WRDG is also thought to be especially eager to complete the PPP arrangement now because the time when the worst landfill fires traditionally occur is rapidly nearing. These blazes typically erupt between spring and early summer, exploiting the dry conditions at the site and rising temperatures.

The resulting health and environmental issues, which impact residents in Jubilee Gardens and other nearby communities, also pose a risk to The Bahamas’ high-end tourism product as the winds frequently blow the smoke and fumes towards resorts such as Baha Mar, Albany, SuperClubs Breezes and Sandals.

Among the issues the Government and Providence/WRDG will have to agree are 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 will also have been 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.

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.

Comments

B_I_D___ 6 days, 9 hours ago

So...using that terminology, '50 yards', reference that to American Football and you're only half way there, you can be the pessimist or optimist, and go with the glass being half full or half empty...

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realfreethinker 6 days, 9 hours ago

He may be using the Canadian football league which is 110 yds. So they would not be halfway yet lol

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geostorm 6 days, 2 hours ago

I wish this group success. It may the turning point we need with this landfill situation!

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concerned799 6 days, 1 hour ago

Best of luck. IF it does work out lets be prepared to give credit where it is due. :)

In the mean time what about the family islands? Surely something needs to be done there to do recycling and better waste management?

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stocktonfuller 5 days, 16 hours ago

Well, this sounds good ... but they still don't have financing ... a pre-condition for the successful bidder in the original deal with the government. Let's face it, Providence Advisors doesn't have the skill set to complete this deal, they have no financing, and they coned the government for the past 6 months whilst attempting to find another party that could bail them out. Let's hope WRDG has some way to save this fiasco

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