WATER and Sewerage Corporation executive chairman Adrian Gibson stated emphatically that the corporation will not be renewing some 15 expired reverse osmosis (RO) operator contracts, adding the corporation’s previous management had agreed to “grossly disadvantageous contracts” in favour of contractors.
During his contribution to the 2019/2020 budget debate, Mr Gibson, the Long Island MP, said: “Since being appointed, I’ve noticed a number of bad contracts. Our research has shown that we can purchase a brand new plant, ranging from 2,500 gallons per day to 20,000 gallons per day, for prices ranging from $15,000 dollars to approximately $45,000/$50,000 per plant. This is with WSC owning the plants outright.”
He added: “The bulk of WSC plants range from 2,500 gallons per day to 10,000 gallons per day. Beyond the high cost of the water, unsustainable for WSC to pay for a plethora of additional, questionable and onerous costs in certain water contracts. Let me state emphatically that WSC will not be renewing these contracts. We currently have about 15 expired contracts. WSC is moving to standardise all RO contracts and has been in talks to engage the services of a well-respected international RO consultant. I have also formed an RO unit. This unit is comprised of hydrologists and specialist RO engineers and technicians. We undertook a recruiting exercise and continue to do so.”
Mr Gibson also said: “Last year, we had an incident where a plant operator in Eleuthera did not pay BPL, leaving a bill of $200,000 dollars, notwithstanding the fact that WSC included payments of electrical bills in its remittances. BPL consequently disconnected, which meant that that section of the island would not be able to access water after our reserve tanks were depleted. What’s more, the plant did not have a backup generator. I had to intervene and, along with Minister (of Works Desmond) Bannister, was able to have BPL re-connect with the undertaking that WSC would garnish outstanding BPL amounts from their future payments.
“Sometime ago, the government awarded the plant in North Eleuthera to a noted international RO operator. Notably, the plant is well behind its completion delivery date. As such, WSC has applied the contractual clauses and has notified the contractor of liquidated damages of $500 a day which have been applied from January 22 and will continue to run until delivery. Notably, several of the larger RO operators have taken or pay clauses built into their contracts. Essentially, that means that even if WSC does not use or take a certain amount of water, WSC still has to pay for it.”
Mr Gibson told Parliament: “It is unfortunate that a previous iteration of WSC management and government agreed to grossly disadvantageous contracts. Many contracts have (been) watered down, in favour of the contractor.”
Mr Gibson noted that WSC has paid more than $80,000,000 to Family Island based RO plant operators. In New Providence—between 1997 and present day— WSC has paid Consolidated Water Company CWCO $304,000,000 dollars. As at May 16, 2019, total CWCO invoices outstanding stood at $12 million. WSC also pays the property tax for these operations, he said.
“When one calculates the amounts paid, this is tantamount to enough RO plants to run the entire Bahamas and then some. At present, the only two plants owned by WSC were acquired under my tenure—Sweetings Cay and Ragged Island. By owning these plants, we have saved $200,000 per year. We are in discussions to purchase a number of smaller plants in short course,” said Mr Gibson.