Monday, September 13, 2021
By NEIL HARTNELL
Tribune Business Editor
CENTRAL Eleuthera’s water supply enjoyed a last-minute rescue after the Water & Sewerage Corporation finally submitted a newly-signed contract to the area’s supplier before Friday’s cut-off deadline.
Aqua Design, which has been locked in a long-running dispute with the state-owned water utility, told Tribune Business yesterday that it will continue to operate the reverse osmosis plant at the old Naval base after receiving the deal it had requested.
“Shortly before our contract for operations at the water treatment plant in Central Eleuthera was set to terminate, we received a new signed contract from the Water & Sewerage Corporation,”it said in a statement.
“Under this contract, Aqua Design Bahamas will continue operations in Central Eleuthera. We look forward to continuing to serve the community.”
Resolution came after Aqua Design, in a note to central Eleuthera residents and businesses last Thursday, warned that water supply was in jeopardy of being cut-off at 2.30pm on Friday after the Water & Sewerage Corporation had failed to reply to the new contract proposal it had submitted.
Alleging that it was still owed a collective $1.6m by the Water & Sewerage Corporation across all plants it operates, Aqua Design said that in the absence of a response it was putting into effect the August 6, 2021, judgment from the Supreme Court that found it had properly terminated the Central Eleuthera water supply contract.
Justice Indra Charles ruled that the company, a subsidiary of SUEZ – Water Technologies & Solutions, was “entitled to terminate” its deal with the Water & Sewerage Corporation because the latter had failed to cure its persistent defaults in failing to pay for water it had provided.
She gave Aqua Design two months to “demobilise” its reverse osmosis plant, located at the former US naval base, and ordered that the Water & Sewerage Corporation abide by the terms of the two parties’ contract should it wish to purchase the reverse osmosis plant’s equipment, materials, chemicals and other infrastructure.
However, Justice Charles stayed “execution” of her judgment until 2.30 today “to give them an opportunity to work out their differences”. She added: “Nothing prevents them from going back to the drawing board, and to negotiate a new sub-agreement on such terms and conditions which are beneficial to both parties.”
The latter appears to have been accomplished, albeit at the 11th hour and with some nervous tension involved - not to mention consternation among central Eleuthera businesses and residents who were temporarily threatened with a second loss of water supply within a year.
Thomas Sands, the Eleuthera Chamber of Commerce president, speaking before Aqua Design and the Water & Sewerage Corporation agreed terms on Friday, said: “We do not wish to get caught up in politics but, generally, we are all deeply concerned and stunned that this matter has not been resolved to ensure continuity of an essential service. It must be addressed.”
Aqua Design first stopped producing on October 19, 2020, at the height of its payments dispute with the Water & Sewerage Corporation, although the Supreme Court ordered supply restoration three days later while their dispute played out in the courts.
Finding that non-payment of Aqua Design’s invoices within 30 days was a default breach of the agreement by the Water & Sewerage Corporation, Justice Charles in her August 6, 2021, said “the clarion calls from Aqua Design fell on deaf ears” despite it giving the state-owned utility and the Government extra time - more than 60 days - to pay.
“Simply put, Aqua Design took the action to cut off the supply of water during a pandemic when the other party had been delinquent in paying its bills. Water & Sewerage Corporation blames the COVID-19 pandemic and argues that Aqua Design should have extended time to the end of the pandemic,” Justice Charles wrote, noting that the Government had even threatened to criminally prosecute the company and its employees.
“It is plain that the delinquency of Water & Sewerage Corporation started before COVID-19 and, in any event, Water & Sewerage Corporation has failed to demonstrate any legal basis either in law or in the agreement to bolster its submission that Aqua Design should have extended time to the end of the pandemic......
“Instead, it refused and/ or failed to respond to Aqua Design. It was only after Aqua Design turned off the water supply on the evening of October 19, 2020, that the chairman wrote the Prime Minister, minister of finance and minister of works,” Justice Charles added.
“It seems to me that if Aqua did not take such a drastic step, the arrears would have continued to burgeon. Aqua has its employees and sub-contractors to pay also. But I believe that Water & Sewerage Corporation’s silence and/or evasiveness in dealing with this issue broke the camel’s back.”
Justice Charles, echoing Luther McDonald, attorney for Aqua Design, questioned why the Water & Sewerage Corporation had failed to behave like an “ordinary citizen” by not discussing how it intended to pay the arrears owed to its supplier.
“In my judgment, Water & Sewerage Corporation was the author of its own demise. Water & Sewerage Corporation could have cured the default with reasonable diligence,” Justice Charles wrote.
“Mr McDonald argues that Water & Sewerage Corporation cannot be heard to speak of reduced cash flow, and that it had to wait on the Government for assistance. He correctly maintains that nowhere in the agreement is the liability of Water & Sewerage Corporation to pay made subject to its cash flow or to it receiving help from the Government.
“Even as the parties awaited the delivery of this judgment, Water & Sewerage Corporation continues to be delinquent necessitating Aqua Design to file a Notice of Motion on April 8, 2021, seeking payment of arrears. On 15 April 2021, the Court ordered that Water & Sewerage Corporation shall pay the sum of $454,195 on or before April 21, 2021,” Justice Charles added, noting that it was paid.
“While I am fully cognisant of the financial strains that COVID-19 and, prior to that, Hurricane Dorian, have caused to this fragile economy, priority must be given to an essential commodity, such as water, even if consumers are not paying their bills on time. In fact, many of us may be delinquent in paying our bills or loan repayments as they fall due, but we sit down with the lender and enter into some form of settlement discussion.”