By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The Water & Sewerage Corporation slashed the near-$14 million receivables owed to BISX-listed Consolidated Water by almost 50 per cent during 2014, it has been revealed.

Consolidated Water, in filings with the US Securities & Exchange Commission (SEC) on Friday, divulged that the Corporation - with the Government’s assistance -had reduced the debt owed by $6.9 million over the past year.

While Consolidated Water was still owed $7 million in past due receivables come end-December, the company said it had been able to invest $5 million of the sum received in certificates of deposit (CDs).

The other key revelations in Consolidated Water’s 10-K (annual report) filings were:

• Revenues from its two New Providence-based reverse osmosis plants, Blue Hills and Windsor, were down $2.5 million year-over-year because the Water & Sewerage Corporation had reduced its bulk water purchases.

This resulted from the $81 million, Inter-American Development Bank (IDB) financed project that the Corporation is undertaking to reduce water losses from its distribution system before it reaches the end-consumer.

• And, almost TWO YEARS after its contract expired, the Christie administration has yet to decide whether it will renew Consolidated Water’s contract to operate the Windsor plant for another five years, or hand it to another operator.

For the moment, Consolidated Water is continuing to operate Windsor on a month-to-month basis until further notice. The plant is important to its financial performance, though, given that it generated $6.2 million in revenues for the BISX-listed operator in 2014.

Still, acknowledging the difficulties its Bahamian subsidiary has experienced in the past in obtaining timely, in full payments from the Water & Sewerage Corporation, Consolidated Water said in its SEC filing: “During 2014, the Government of the Bahamas made significant incremental payments, and as a result, Consolidated Water (Bahamas’) accounts receivable from the Corporation was reduced to approximately $7 million as of December 31, 2014.

“During May 2014, June 2014 and September 2014, the Corporation made significant incremental payments to reduce the past due amounts it owed to Consolidated Water (Bahamas).

“As a result, Consolidated Water (Bahamas’) accounts receivable decreased by approximately $6.9 million from December 31, 2013 to December 31, 2014. A portion of these funds were invested in the $5 million certificate of deposit reflected on our December 31, 2014 consolidated balance sheet,” the BISX-listed water plant operator added.

“Representatives of the Bahamas government have informed us that previous delays in paying our accounts receivables do not reflect any type of dispute with us with respect to the amounts owed, and that the amounts will ultimately be paid in full. To date, we have not been required to provide an allowance for any delinquent Consolidated Water (Bahamas) accounts receivable, as such amounts were eventually paid in full. We believe that the accounts receivable from the Corporation are fully collectible.”

The Bahamas accounts for 40 per cent of Consolidated Water’s top-line revenues, making it he most important territory in which the company operates. However, bulk water operating income was down from $10.103 million in 2013 to $9.742 million.

“The decrease in bulk revenues of approximately $759,000 from 2013 to 2014 is attributable to our Bahamas operations, which generated approximately $2.5 million less in revenues in 2014 than in 2013,” Consolidated Water revealed in its 10-K filing with the SEC.

“The 2014 revenue decrease for our Bahamas operations resulted from a decrease in the volume of water sold (primarily from our Blue Hills plant) to the Water and Sewerage Corporation of the Bahamas.

“In 2013, the Corporation purchased water volumes from our Blue Hills plant that were significantly higher than the minimum amounts they were required to purchase under the water supply agreement for this plant,” the company added.

“However, as a result of water conservation and loss mitigation efforts it has conducted since that time, the Corporation has significantly reduced the amount of water lost by its distribution system and consequently decreased the volume of water purchased from our Blue Hills plant in 2014 (although the Corporation continued to purchase more in 2014 than the contract minimum amount).”

Good news for the Corporation and its customer, plus all Bahamian taxpayers, but not so good for Consolidated Water and its Bahamian shareholders. The volume of water supplied to the Corporation by its Nassau plants fell by 17.4 per cent year-over-year, dropping from 4.6 billion gallons to 3.8 billion in 2014.

Consolidated Water, though, reiterated that its supply agreement for the Windsor plant had expired back in 2013 after it delivered the total contracted amount to the Corporation.

“At the request of the Government of the Bahamas, we continue to maintain and operate the Windsor plant to provide the Government with additional time to decide whether or not to enter into a long-term water supply agreement with us for the Windsor plant. We generated $6.2 million in revenues from this plant during the year ended December 31, 2014,” Consolidated Water said.

The Windsor plant has a 3.1 million gallons per day capacity, and Consolidated Water added: “At the conclusion of the agreement, the Corporation has the option to extend the agreement for an additional five years at a rate to be negotiated; exercise a right of first refusal to purchase any materials, equipment and facilities that Consolidated Water (Bahamas) intends to remove from the site at a purchase price to be negotiated; or require Consolidated Water (Bahamas) to remove all materials, equipment and facilities from the site.”