A Bahamian company is awaiting final Cabinet approval on a multi-million dollar pipeline project that could solve New Providence’s increasing water problems by transporting fresh water from Andros to this island at a price that it believes will be almost 23 per cent cheaper than what the Water & Sewerage Corporation presently pays or could be delivered by a reverse osmosis plant.
Documents seen by The Tribune show that Hydro Bahamas plans to develop a new 26 million gallon wellfield in Central Andros and transport the extracted fresh water to New Providence via a deep sea pipeline, tapping into natural resources which, according to the Water & Sewerage Corporation’s own research, can supply 210 million gallons of fresh water per day from north and central Andros alone.
Hydro Bahamas is proposing an initial contract with the Water & Sewerage Corporation that would see it supply a guaranteed minimum of 10 million gallons of fresh water per day to New Providence, with built-in redundancy capacity to extract a further five million gallons.
The company could eventually expand its fresh water extraction and supply business to 30-40 million gallons per day, which sources say would cover New Providence’s water needs for at least “the next 50-100 years”.
According to the Water & Sewerage Corporation, New Providence is projected to need 13 million gallons of water per day by 2005, yet currently only received 8.5 to nine million gallons per day. Some 4.5-5 million gallons are shipped in by two barges from north Andros, with the remainder coming from the existing Waterfields reverse osmosis plant and existing wellfields on this island.
The Corporation has forecast that by 2013, New Providence is likely to need 16 million gallons per day, almost double what it needed in 2000.
Some sources believe the real demand in 2013 could be closer to 18 million gallons of water per day.
According to the Hydro Bahamas plan obtained by The Tribune, its pipeline plan could provide a long-term solution to New Providence’s water shortage problems. However, the company is understood to consider that its plans are not viable – it needs to supply a minimum of 10 million gallons per day – if the Water & Sewerage Corporation presses ahead with plans for the construction of a $20 million reverse osmosis plant at Blue Hills.
The tenders for a plant capable of producing 5 million gallons per day have already gone out, and Consolidated Water – the Cayman Islands-based company that already owns the Waterfields plant and is understood to be the front-runner for the Blue Hills contract. The Blue Hills plant could eventually be expanded to a six million gallon per day capacity.
In its recent fourth quarter results announcement, Consolidated Water said it was the lowest bidder on a 20-year contract to supply and operate a 6 to 7.2 million US gallon plant that would provide bulk water supplies to Nassau and was awaiting evaluation of its offer by the Water & Sewerage Corporation.
However, Hydro Bahamas is understood to believe that any move towards reverse osmosis does not make sense for either economic or environmental reasons, a position that appears to be backed by experts. The company believes water produced by reverse osmosis will be more expensive than the fresh water it extracts.
In a research note, Donald McCorquodale, a professor of oceanography, said: “If you have proven natural resources of fresh water in your country, I would strongly recommend that you explore this option first.”
Doing so would make the Bahamas more independent and leave it less vulnerable to fluctuating oil prices.
He also warned that to produce one gallon of fresh water via reverse osmosis, at least one gallon of “salt brine” was created, meaning this had to be disposed of. Professor McCorquodale said this “could represent an environmental hazard and has therefore to be blended at 70:1 before it can be returned to the ocean”.
Although desalination plants such as the one the Water & Sewerage Corporation had put out to tender had been shown to deliver good quality water, the plants were heavily energy dependent, leaving them vulnerable to increases in inputs such as oil and energy costs.
In addition, the tender document sent out to bidders by the Water & Sewerage Corporation appears to leave the Corporation responsible for picking up the winning bidder’s electricity costs and diesel fuel costs whenever there is a BEC power cut.
The tender document, a copy of which has been seen by The Tribune, said that provided the successful bidder met the agreed amount of water delivered and the “KVA Maximum Demand” did not exceed guarantees made at the time of the bid, “the [Water & Sewerage] Corporation shall incur the actual net billed costs of electrical power (Kilowatt Hours and KVA Maximum Demand per annum) consumed during the Desalinated Water Delivery Period)”.
The Tender added: “The Corporation shall pay all invoices presented by BEC for the electricity and maximum demand required to operate the plant during the Desalinated Water Delivery Period.”
On a power cut, a Tender clause said: “In the event of BEC power supply failure or excursion, diesel fuel used by the standby diesel generator for the production of electricity for desalinated water production shall be paid by the [successful bidder] to the fuel oil supplier and the [Water & Sewerage] Corporation will reimburse the [bidder]……”
Effectively, the tender means that the Bahamian taxpayer, through the Water & Sewerage Corporation, could end up underwriting the business plan and costs of a company such as Consolidated Water, which is listed on the US-based Nasdaq stock exchange.
The tender also appears not to address how the successful bidder will dispose of any “brine” that is produced.
The Hydro Bahamas project, which has a projected overall cost of $124.4 million, will involve no capital investment or construction risk on the Government’s part. Hydro Bahamas would only charge the Water & Sewerage Corporation once fresh water started to flow, with the price based on a throughput fee.
For the minimum 10 million gallon per day amount, Hydro Bahamas plans to charge $4.85 per 1,000 gallons, which is below the $6.30 per 1,000 gallons that the Water & Sewerage Corporation currently pays. If the Corporation uses more than the minimum amount, the water becomes cheaper the more it purchases, with the price above the minimum coming down to $2.85 per 1,000 gallons. Prices will be tied to the US consumer price index.
According to the documents obtained by The Tribune, Hydro Bahamas proposes to complete an Environmental Impact Assessment, feasibility study and all engineering for the first phase of the project within four months of having its Heads of Agreement approved by the Government.
In the first Phase of its project, the company to develop the Central Andros wellfield and install transmission lines between the wellfield to Coakley Town. A seven million gallon storage tank would also be built in Coakley Town. All water supplied by the company will be to the highest World Health Organisation (WHO) standards.
To provide redundancy capacity for its Androsia pipeline, Hydro Bahamas will also reassure the Government by providing for alternative tanker shipment of its freshwater supplies, constructing an offshore loading platform and two million gallon tank off Andros and an offloading facility in New Providence at Arawak Cay.
Transmission water mains would then be installed to take the delivered fresh water from Arawak Cay to pumping stations at Blue Hills and Winton. The company estimates this would be all completed within 11 months of the feasibility studies being completed.
The second phase will involve the laying of the 21-mile long Androsia pipeline between Coakley Town and Clifton Pier, which Hydro Bahamas estimates will take 24 months to complete once new feasibility studies have been done. These feasibility studies will take 12 months from the date the first phase is finished. The pipeline will be laid at a depth of up to 6,500 feet, using technology that has already helped lay deepwater pipelines at 10,000 feet in areas such as the Gulf of Mexico.
The Tribune understands that Hydro Bahamas has proposed penalties against itself if it fails to deliver, such as a $15,000 per day fine for every day it runs over the completion schedule. It has also propose that the penalty levied if it fails to deliver the stipulated amount of water be double the throughput fee it would charge the Water & Sewerage Corporation.
Hydro Bahamas is understood to be confident that the pipeline will pose no ecological threat to underwater life, while the offshore loading facility will not harm any reefs. Its business plan adds that wellfields, such as the one it proposes in central Andros, have had no negative impact on ecosystems, given that one has been located within four miles from the Lucayan National Park for the last 40 years.
Neil Hartnell, The Tribune
