The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

A master plan to solve New Providence’s wastewater woes was delayed for 14 months after the then-Water & Sewerage Corporation Board sought a “sole-source award” of the contract, Tribune Business can reveal.

An Inter-American Development Bank (IDB) report, which has been obtained by this newspaper, discloses that the $1.1m contract was delayed by the board headed by the late Bradley Roberts, the former Cabinet minister and Progressive Liberal Party (PLP) chairman, despite the multilateral lender raising no objections to the tender process winner.

“A $1.1m contract to develop a master plan for wastewater collection, treatment and disposal in New Providence was awarded to Adin Holdings, in association with HGM Consulting Engineers and Planners and Integrated Building Systems (IBS), in December 2013 after more than a year of delays,” the report reveals.

“This tendering process was started in April 2012, in a timely manner, when expressions of interest were received by the Water & Sewerage Corporation. Subsequently, on June 29, 2012, five firms submitted proposals out of eight short-listed, and their proposals were evaluated by Water & Sewerage Corporation.

“On October 2012, the non-objection to award the contract was granted by IDB. The Water & Sewerage Corporation Board of Directors delayed approval of the contract for 14 months by raising questions about the scope of services being sought, and seeking a sole-source award.”

While there are legitimate reasons for “sole source” awards under certain circumstances, they are normally tightly controlled and only issued under specific rules and guidelines. Also known as “direct contracts”, they are widely viewed as anti-competitive because there is no bidding process, and can be used to steer deals towards favoured bidders.

The IDB report raises more questions than answers, as it gives no explanation for why the Water & Sewerage Board challenged the “scope of services” or wanted a “sole source” method. Nor are the potential recipients of the “sole source” award - if there were any - identified.

However, controversy has already embroiled other aspects of the Water & Sewerage Corporation’s wastewater treatment strategy, most notably the Gladstone Road treatment plant on which there were 91 percent cost overruns.

The plant, which was supposed to treat Baha Mar’s wastewater and return it to irrigate the $4.2bn project, was highlighted by an Ernst & Young (EY) forensic audit as an example of how politically-motivated interference and mismanagement have cost the Corporation and Bahamian taxpayers millions of dollars.

Despite a 91 per cent overrun on the original $9.6m budget, which has cost the Corporation some $18.3m as at March 2018, the EY report said further capital expenditure is required to complete the still-unfinished facility.

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

The IDB report’s revelations will likely further add to perceptions about the murky environment surrounding many government procurement awards under multiple administrations. The current government has pledged to address this through public procurement reforms that have been widely circulated for consultation, and K Peter Turnquest, deputy prime minister, recently told this newspaper that it planned to move the proposed legislation forward despite the ongoing threat of COVID-19.

The wastewater treatment master plan developed by the consultants called for the Water & Sewerage’s systems to be expanded to cover 67 percent of New Providence’s population, up from the present 15 percent, in a three-phased investment lasting from 2015 to 2036 at a cost of $638m - something the Government is unlikely to be keen on today given its multiple Dorian and COVID-19 financial challenges.

“The proposed master plan contained three implementation phases - immediate stage (2015-2020); mid-term development (2021-2025); and long-term stage (2026-2035),” the IDB report revealed. “The number of connections would be expanded from a current baseline of 15 percent of population served to 22 percent in 2020, 36 percent in 2025, and 67 percent in 2035.

“Implementation of the plan would require large capital investments, estimated at about $638m, including the cost of house connections, or about $70m, which would be taken on by the consumers. Some $79m, or 12 percent of the total investment, was allocated to the first or immediate stage.”

The Government will also not be eager to place an additional $70m burden on Bahamian residents and businesses who are still grappling with the effects of the COVID-19 pandemic. While some of the Water & Sewerage Corporation’s pumping stations, sewer lines and disposal wells were upgraded with financing from the IDB, the report said significant challenges - including the $638m proposal’s execution - remain.

“Two examples of the financial challenges that Water & Sewerage Corporation may have to address in the near future are: the frequent appearance of grey PVC pipes throughout New Providence, a material that was not supposed to be used as conduit for pressurised water and, thus, has been repeatedly failing,” the IDB added.

“According to preliminary estimates, 176,000 feet of sub-standard PVC piping, with 8,500 feet considered as of a higher priority, would need to be replaced. The wastewater infrastructure management master plan contained three implementation phases to increase the network’s range to 67 percent of the population by 2035. Implementation of the plan will require substantial capital investments, estimated at US$638m.”

The report continued: “The use of private wells, combined with the use of individual septic systems for wastewater disposal, causes some social and environmental concerns in the long-term. The risks of contaminating groundwater resources, especially those shallow aquifers used by large segments of the population as sources of untreated drinking water, still poses risks.

“Since the current public sewerage networks cover only 15 percent of the New Providence population, there is a need to expand this infrastructure, as recognised by the master plan, but at a significant cost, as previously mentioned. Alternatively, the reach of the potable water distribution network could be more effectively expanded to try to insulate the areas of New Providence most vulnerable to groundwater contamination (due to higher population density or other factors).

“One aspect that curtails this network expansion is the water quality problem described as ‘red’ or ‘rusty’ water caused by chemically aggressive water, from reverse osmosis plants, flowing through old-scaled pipes. This condition is not well received by customers, driving many of them to install private wells. It seems that if Water & Sewerage Corporation aspires to grow its customer base, to help protect vulnerable population against groundwater pollution, it would need to confront this issue in a comprehensive and determined manner.”