Consolidated Water’s most senior executives yesterday said they will be seeking answers from the Government over “the next two or three days” regarding the proposed Arawak Cay reverse osmosis plant, with the BISX listed firm maintaining its bid for the multi-million dollar contract.
Jeffrey Parker, Consolidated Water’s chairman, said in a conference call with Wall Street analysts: “We’re still got the Arawak Cay bid in there, and there’s been no notification of what the Governrment intends to do after Blue Hills.
“We hope to get a little more clarification on that in the next two to three days while we’re in Nassau.”
Mr Parker and Rick MacTaggert, Consolidated Water’s president and chief executive, are currently in Nassau to attend a Board of Directors meeting at its Waterfields subsidiary, which was held yesterday. Waterfields owns the existing Windsor reverse osmosis plant in Nassau, and is also constructing the $29 million Blue Hills plant – the first of three planned for New Providence – which will eliminate the need to barge water to the island from the Andros wellfields.
The Arawak Cay plant was due to be the second plant constructed, and was intended to supply both Kerzner International’s $730 million Phase III expansion on Paradise Island and Baha Mar’s $1.6 billion Cable Beach redevelopment with water via the Water & Sewerage Corporation. The plant was due to be constructed by April 2007, the date when Phase III will be finished, but the Corporation is understood to have been negotiating with Kerzner International to move this date back because the winning bidder for Arawak Cay has not been chosen.
Mr McTaggert told The Tribune in January that Consolidated Water was advised that its bid and that of “a competitor” for the Arawak Cay contract had both been “annulled”, and nothing had been heard since then.
The “competitor” was BK Water, a group of Bahamian investors whose principals include Jerome Fitzgerald, the RND Holdings chairman; businessman Mark Finlayson, son of entrepreneur Garet ‘Tiger’ Finlayson; and ex-Burns House chief financial officer Philip Kemp; At least two to three other investors, whose names are not known, are understood to be involved in the BK Water group.
The same BK group and principals are the ones who have offered $50 million to acquire Winn-Dixie’s 78 per cent stake in Bahamas Supermarkets, in the guise of BK Foods.
If successful, The Tribune understands that while BK Water would own the Arawak Cay plant and sell water to the Water & Sewerage Corporation, the plant’s operations would be run by French company, Veolia Enerserve, under a management/operating partner agreement.
The Government is thought likely to look favourably on any group with Bahamian involvement, wanting to place privatised infrastructure assets into Bahamian hands as part of its Bahamianisation policy.
There is also understood to be concern about handing a second reverse osmosis plant to Consolidated Water, for fear that would give the company a monopoly over water production on New Providence.
However, some sources told The Tribune that Consolidated Water’s bid was the lowest by $10 miilion, providing the Corporation with the greatest savings and consumers with the lowest price. Yet this was disputed by others, with some saying the BK Water/Veolia bid was offering extra services that Consolidated Water did not propose to.
The Arawak Cay reverse osmosis plant contract seems to have been caught up in the internal squabble at the Water & Sewerage Corporation between its chairman, Donald Demeritte, and general manager Abraham Butler. The Government has yet to resolve the dispute satisfactorily.
Differences over who to award the Arawak Cay contract to were alleged to have been at the centre of the men’s dispute, and the situation has been picked up by opposition FNM Senators.
Tommy Turnquest on Wednesday tabled questions in the Senate related to the Arawak Cay contract. He asked the Government to identify the original bidders; the results of the original bidding process; and the dates the bids were due.
He also asked whether outside consultants, Camp, Dresser & McKee, reviewed the bids and what their findings were, plus the review of the bids conducted by the Corporation and the Government’s Tender’s Board.
Mr Turnquest also asked whether the original bids were annulled; why; and whether the Government was negotiating with any company. He also questioned whether BK Water was pre-qualified as a bidder for the project.
Both reverse osmosis plant contracts have been embroiled in controversy.
On the Blue Hills plant, which Consolidated Water won, the Water & Sewerage Corporation and Camp, Dresser & McKee both awarded the bid to rival bidder, Biwater International.
However, that had to be approved by the Cabinet, which rejected the Biwater selection. Consolidated Water was eventually chosen.
By NEIL HARTNELL, Tribune Business Editor
