By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Thousands of residents in three Family Island communities have been spared a water supply cut-off today after the government and private sector operator struck a deal to end their dispute.

However, Aqua Design Bahamas, the operator of the reverse osmosis plants supplying South Eleuthera, San Salvador and Inagua, warned in a statement yesterday evening that this could yet be a temporary week-long reprieve if the government fails to deliver on their agreement.

While the terms of the deal agreed with the Minnis administration and Water & Sewerage Corporation were not disclosed, it likely involves the payment of at least a portion of the $3.8m debt that Aqua Design Bahamas alleges it is owed because it involves the issuance of a “comfort letter” by the government.

Such documents usually guarantee a borrower or debtor’s obligation to repay, in this case the Water & Sewerage Corporation, and indicate that the Bahamian taxpayer will be called upon again to bail-out the state-owned water utility.

While the agreement involves Aqua Design Bahamas continuing to operate the three reverse osmosis plants until November 1 this year, a further insight into the lack of trust between the two sides was signalled by the company’s warning that it will cease water production - and supplying the Water & Sewerage Corporation and its customers - if the Government fails to deliver.

“The planned closure of the plants of South Eleuthera, San Salvador and Inagua has been postponed until Saturday, May 8,” Aqua Design Bahamas. “On Sunday, May 2, the Water & Sewerage Corporation accepted the terms proposed by Aqua Design Bahamas to resolve all outstanding issues between the parties.

“A letter of comfort is to be issued by the Government of the Commonwealth of The Bahamas by the close of business on May 7, assuring payments by the Corporation. Water & Sewerage Corporation and Aqua Design are working to finalise written agreements in the coming days.

“Should the parties comply with their obligations, Aqua Design will continue production at these plants through November 1, 2021. Should Water & Sewerage Corporation not meet its obligations, we will cease production on May 8, 2021. We are hopeful that our dialogue with Water & Sewerage Corporation and the Government of the Bahamas will remain productive, and that Aqua Design will be able to continue operations.”

No information has been forthcoming from the Government. Both Desmond Bannister, deputy prime minister with responsibility for the Corporation, and Adrian Gibson, its executive chairman, again could not be reached for comment yesterday.

The Prime Minister, on Friday, said the Government was “aggressively” moving to resolve the matter, and he had spoken to Mr Bannister and Marlon Johnson, the Ministry of Finance’s acting financial secretary, on the matter that morning.

Aqua Design Bahamas last week argued it had been “left with no feasible choice but to cease operations” in the three communities.

It blamed the move on the Water & Sewerage Corporation’s failure to settle $3.8m in outstanding debts due to it, although it did not say whether these related solely to the three plants in danger of being decommissioned, with another $740,000 bill coming due for payment on May 8, 2021.

Aqua Design said the second factor driving its pull-out threat is the Water & Sewerage Corporation “showing no interest” in renewing the contracts to operate the three plants, which have now expired. Acknowledging communities will be put “at risk”, it warned it will “decommission” its plants and remove all equipment that it owns unless the sums owed are settled.

Such a move will effectively make it impossible for the Water & Sewerage Corporation or any other private provider to take over water production at such short notice in time for May 3, but Aqua Design said it had “done everything in our power to avoid this action” but repeated efforts to resolve its grievances with the Water & Sewerage Corporation have proven unsuccessful.

“The Water & Sewerage Corporation has been delinquent in paying for water production for several years, consistently owing millions of dollars over this time period,” Aqua Design said. “Across all of the islands where Aqua Design operates, the past due amount currently totals nearly $3.8m, with an additional $740,000 coming due on May 8, 2021.

“All plants and materials at Aqua Design facilities are the property of Aqua Design, and will be decommissioned, as is our contractual and legal right, on May 3 if this issue is not resolved. The Water & Sewerage Corporation does not own any of the equipment at these plants.

“We are not aware of any plans by the Corporation to provide water to these communities following the decommissioning of our plants on May 3. We ask the people of the Bahamas to inquire as to the Water & Sewerage Corporation’s plans for water production at South Eleuthera, San Salvador and Inagua,” it continued.

“If, indeed, they do not have an alternate plan, they should be urged to renew our contracts and fulfill their contractual obligations by coming current on all past due balances and remaining current on payments so as not to jeopardise the lives and livelihoods of the people that live in these communities.”