By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Bahamian investors will be able to purchase an ownership stake in a new joint venture entity holding several Out Island water plants via its upcoming share offering, it was revealed yesterday.

Leon Lundy, minister of state with responsibility for the Water & Sewerage Corporation, told Tribune Business that WSCDesalCo will be formed to hold seven reverse osmosis plants set to be acquired from Aqua Design (Bahamas) via negotiations set to be completed by early July at latest.

And he confirmed that WSCDesalCo will be structured as a private-public partnership (PPP), jointly owned by the Government and private Bahamian investors, who will be given an opportunity to buy into the holding company through a "share offering".

Mr Lundy told this newspaper that full approvals for WSCDesalCo's creation are being issued by Cabinet "right now", and it should be created and operational before year-end 2025. With details still being finalised, he was unable to provide the timing of any share offering, the likely price that will be offered to Bahamians, the collective size of the public and government's stakes, or their respective values.

Addressing the House of Assembly during the 2025-2026 Budget debate, the minister disclosed: "We’ve taken significant strides in ensuring the sustainability of our water resources, including the acquisition of seven desalination plants in Eleuthera, Exuma, San Salvador and Inagua.

"These plants will be transferred to the WSCDesalCo, a new public-private utility company that will be owned by Bahamians and the state. This is an historic move that will keep profits in The Bahamas and reinvest them in the nation’s people and environment."

Speaking subsequently to Tribune Business, Mr Lundy confirmed that the seven water-producing plants referred to were those owned by Aqua Design (Bahamas), with whom the Water & Sewerage Corporation and the Government have had an increasingly acrimonious relationship that has spilled over into several Supreme Court battles in recent years.

Confirming that talks to acquire the plants from Aqua Design (Bahamas) are ongoing, the minister said: "We're in negotiations, and it's coming down to the final weeks of negotiations. We should have the remainder completed in a few weeks; if not by this month, by early July.

"We'll also have an arrangement where we have the maintenance being done [by the present owner] until the full transfer of ownership." The Government and Water & Sewerage Corporation have made no secret of their desire to buy the seven reverse osmosis plants from Aqua Design (Bahamas) due to the complete breakdown in relations with the latter.

However, WSCDesalCo's creation will enable the present water industry structure to be maintained by keeping reverse osmosis production separate from water distribution. And, via the share offering, it will in theory give Bahamians an opportunity to create wealth through becoming owners in the country's utility sector.

"The new WSCDesalCo that we're going to create, it should be within this year," Mr Lundy told Tribune Business. "We're getting our full approvals from Cabinet right now. We'll be sending out more details in the coming weeks."

Asked how Bahamians will be able to acquire an ownership interest, the minister signalled there would be particular emphasis on facilitating retail investors, or individual Bahamians, to buy in. "It'll be by share offering," the minister added. "We'll meet with the general public also on the type of arrangement it will be.

"It will be owned by the state and the Bahamian public at large. We're working out all the logistics right now. Those details will come out in short order. Definitely all those details will be coming out shortly. We should be sending out something in a few short weeks with the overview of how it will work, and we'll go from there. It will be an offering for all Bahamians to participate in."

Addressing the House of Assembly earlier, Mr Lundy confirmed the ongoing talks. "The Government is advancing negotiations with the French desalination conglomerate, Veolia Water, and its Bahamian subsidiary, Aqua Design (Bahamas), to acquire seven desalination plants located in Eleuthera, Exuma, San Salvador and Inagua," he said.

"We anticipate finalising this agreement in the coming weeks, followed by a purchase and short-term transition arrangement." The Chief Justice had earlier this year granted a seven-month extension to an injunction barring Aqua Design (Bahamas) from causing “decimation of the business and residential community of San Salvador” by cutting off supply.

Sir Ian Winder, in an April 3, 2025, verdict extended until early November the “emergency” injunction obtained by the Water & Sewerage Corporation that blocked the provider from ceasing water production at the reverse osmosis plant supplying all the former’s San Salvador customers over purported “safety risks”.

The state-owned water provider obtained the initial injunction just one day before Aqua Design was set to walk away and abandon San Salvador. Sir Ian’s ruling also revealed that there was a more than $10.5m ‘gap’ between the two parties over the potential sale of four of the private provider’s seven reverse osmosis plants to the state-owned utility - the same plants the Government is negotiating for now.

The judgment quoted at length from an affidavit sworn by Robert Deal, the Water & Sewerage Corporation’s general manager, who disclosed that it had “entered into negotiations for the sale and purchase” of the four plants. While these locations were not identified, two appeared to be the San Salvador reverse osmosis plant as well as the facility at Waterford in Eleuthera.

Mr Deal said the Water & Sewerage Corporation, on August 9, 2024, wrote to Aqua Design (Bahamas) requesting a list of materials, equipment, parts, chemicals and other goods present at the four plants and their value in accordance with the ‘master agreement’ between the two sides. The plant operator responded on November 10, 2024.

“The defendant [Aqua Design] then extended an offer to the claimant [Water & Sewerage Corporation] for the sale of its businesses for $18.767m,” Mr Deal said. “However, the valuation range obtained by the claimant relating to the market value of the desalination plants is between $5.378m and $8.068m.

“The substantial difference between the defendant’s offer price and the claimant’s valuation is due to the fact that Aqua Design is purporting to sell an ongoing business for the continued production of water, while the claimant is seeking the sale and purchase of the assets/facilities [at the four plants[, not an ongoing business.”

Mr Lundy, meanwhile, while pledging that there will no water rate hike for Water & Sewerage Corporation consumers, also disclosed that the utility has signed a "first-of-its-kind" franchise agreement with Atlantis on April 1, 2025, where the mega resort "now pays for the use of the Corporation’s infrastructure, ensuring that large commercial clients contribute their fair share". 

Other agreements were also said to be under negotiation, and Mr Lundy added: "Operational reforms are also evident in our non-revenue water programme. When we took office, New Providence was distributing 11.9m imperial gallons per day but selling only 5.02m.

"Today, despite distributing slightly less - 11.66m gallons per day - we are selling 8.34m gallons, a 3.32m gallon increase. This increase demonstrates our improved efficiency and our commitment to getting value from every gallon produced."

As for the Water & Sewerage Corporation's financial performance, Mr Lundy conceded that taxpayer subsidies had increased by more than $15m, rising to $64.9m in 2024 compared to $49.34m a year earlier, to help cover debt servicing, payment arrears, water purchases and new capital works.

The utility's net operating loss, while down slightly from the prior year's $53.6m was still at $50.1m, while operating expenses stood at $113m. Revenues, though, rose 7.4 percent over the prior year to $60.9m via greater sales volumes. Such figures may give potential WSCDesalCo investors pause for thought, although they will be buying into a separate company and not the Corporation.