The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

A dispute erupted in the House of Assembly yesterday over a troubled New Providence wastewater treatment plant that the new administration is pledging to finish “in the shortest possible time”.

Bacchus Rolle, the Ministry of Works parliamentary secretary with responsibility for the Water & Sewerage Corporation, provoked several responses from its former executive chairman, Adrian Gibson, after asserting that the former Minnis administration did nothing to bring the Gladstone Road plant to completion during its four-and-a-half years in office.

“In 2015, a New Providence sewerage master plan was prepared inclusive of an implementation plan up to the year 2030. In our briefing with officials of the Water and Sewerage Corporation, the minister [Alfred Sears QC] and I found that a water and sewage waste treatment plant began construction. I think, if I if I remember correctly, in about 2015,” Mr Rolle said.

“This is a waste treatment plan that was designed, or the intent was, to be around $10m. Of course cost overruns pushed the plant to somewhere around $16m.” Mr Rolle was then interrupted by Mr Gibson, MP for Long Island, who said the cost was actually $18m.

“Eighteen million? $18m. Thank you,” Mr Rolle replied. “Of course, the plant today is 95% completed, and as I understand it nothing has been done with regards to the plant since 2017.”

That provoked a further intervention from Mr Gibson, who said: “He’s referring to the Gladstone Road wastewater treatment plant. He would note that the previous government......” He was then interrupted by House of Assembly speaker Patricia Deveaux, who told him to obey House of Assembly protocols when referring to Mr Rolle.

“The honourable member for South Beach is referring to a plant that began and ran into complications under the previous PLP administration,” Mr Gibson resumed. “The Government in 2017 entered into an agreement and undertaking with Baha Mar, and that agreement with Baha Mar included the Gladstone Road wastewater treatment plant in the Heads of Agreement with Baha Mar.”

The Gladstone Road plant was vital to the Government meeting its Baha Mar obligations as it was supposed to treat the mega resort’s wastewater and return it to irrigate the $4.2bn project.

Yet it was highlighted by a 2018 Ernst & Young (EY) forensic audit as an example of how politically-motivated interference and mismanagement have cost the Water & Sewerage Corporation and Bahamian taxpayers millions of dollars.

Despite a 91 per cent overrun on the original $9.6m budget, which had cost the Corporation some $18.3 million at that point, 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 remained unfinished cost the Water & Sewerage Corporation significant revenue and operating losses. This was because the Corporation was paying a non-completion ‘penalty’ to Baha Mar by supplying it with heavily discounted water to irrigate the Cable Beach development.

“The Gladstone Road Waste Water Treatment Plant is capable of receiving waste water from Baha Mar, but is non-operational in the sense that the waste water is not being treated and returned for irrigation,” the EY report said. “Instead, the waste water is simply disposed of in the well.

“Because the Gladstone Road Waste Water Treatment Plant is non-operational, Water & Sewerage Corporation is currently providing Baha Mar with potable water at a substantial discount for irrigation purposes, further increasing the losses to the Corporation.

“As a result of the substantial budget overruns and inoperable facility, Water & Sewerage Corporation management believes that the facility will result in substantial losses to the Corporation, both with respect to the recovery of capital as well as operationally going forward.”

The Water & Sewerage Corporation’s mismanagement of the Gladstone Road project also created further potential liabilities for the Government and Bahamian taxpayer, given that its completion was among the ‘infrastructure improvements’ the last Christie administration committed to with Baha Mar’s new owners, Chow Tai Fook Enterprises (CTFE).

The project’s Heads of Agreement required the Government to “take measures to address the completion of a waste treatment facility to be operated by the Water & Sewerage Corporation that can provide useable brown water to the project”.

The Heads of Agreement gave the Government until December 31, 2017, to achieve this - a deadline that has long passed. This effectively relieves CTFE/Baha Mar of their obligations under the agreement, according to the document, although there has been no indication that the developer has invoked or acted upon this clause.

The EY report also detailed where “an unidentified government official” directed the Ministry of Finance to make a $1m payment to the Gladstone Road plant’s contractor, Nassau Island Development Company, against the objections of the Corporation’s Board, Water & Sewerage Corporation management and then-Ministry of Works’ permanent secretary, Colin Higgs.

“This payment circumvented all internal controls of the Corporation and severely handicapped Water & Sewerage Corporation’s ability to adequately manage Nassau Island Development Company,” EY found.

“Further, because this $1m payment was made directly from the Ministry of Finance, it is not included in the $17.3m spend allocated to Gladstone Road Waste Water Treatment Plant on Water & Sewerage Corporation’s books and records, suggesting that the true cost to-date of the Gladstone Road Waste Water Treatment Plant is $18.3m. This would result in a budget overrun of approximately 91 per cent for a non-operational asset.”

Mr Rolle, though, yesterday pledged: “It is the intent of this administration to complete the Gladstone Road wastewater treatment plant in the shortest possible time.” And Mr Sears later intervened by confirming the debacle had placed the Government in breach of its Baha Mar Heads of Agreement.

“I’m advised by the attorney general that the Government breached the MoU (memorandum of understanding), and has been in breach for the past three years. The facility was in the hands of Water & Sewerage, and for whatever reason.........”

Mr Rolle, meanwhile, provoked a further intervention by Mr Gibson when he accused the former Water & Sewerage Corporation Board, which was headed by the Long Island MP, of failing to consult management over the decision to end a contract responsible for slashing its non-revenue water losses by two-thirds.

“The outgoing Board, with no reference to the Corporation’s management, and no feasible alternative plan, has decided that the contract with Miya Bahamas will expire in April 2022 and not be extended,” he added.

Mr Gibson, though, branded this “absolutely untrue”. He added: “The outgoing Board did not advance such a position without speaking to management.” The Long Island MP said management had over the past two-three years identified Water & Sewerage Corporation staff to go on training courses run by Miya so they can take over the project when the contractor leaves.

However, Mr Rolle replied: “This is rather strange. The same general manager [Elwood Donaldson] the member for Long Island had is the same general manager providing me with this information, but I continue.”

He and Mr Gibson also clashed when Mr Rolle suggested that the Water & Sewerage Corporation had suffered from “an inequitable distribution of capital works across all islands” under the Minnis administration, implying that these were concentrated in the Long Island MP’s constituency.

Mr Gibson vehemently denied this, asserting that works occurred in all islands, while acknowledging that Long Island did receive “attention”.