Photo Credit: Melissa Edwards/BVI Platinum News
The government has successfully renegotiated three contracts with Aqua Design (BVI Ltd.) and Ocean Conversion (OC), which will see government saving some $2M annually in water cost. Additionally, government has signed a Memorandum of Understanding (MoU) with Seven Seas Water BVI Ltd, formerly BiWater, where they hope to also have a reduction in cost and save $4M annually.
The signing took place this afternoon, February 14. However, this does not mean that residents will see a reduction on their water bills.
Hon. Mark Vanterpool, Minister of Communications and Works said that today marks the signing of three major Water Purchase Agreements, which will reduce the cost of water to the government by approximately 30% or approximately $2M per annum, lowering the rate from an average cost of $19 per 1,000 gallons previously, to an average cost of less than $13 per 1,000 gallons.
In relation to the MoU with Seven Seas Water, he explained that the MoU has been signed to review the BiWater contract, with a view to lowering the water rate charged under the Water Purchase Agreement. Minister Vanterpool said that this is subject to agreement with the lender, Barclays PLC and UK Export Finance (UK EF).
"Expectations for a final agreement are imminent. Once the MoU is concluded and becomes a Supplemental Agreement, the government is expected to save approximately $4M per annm. This will bring a total savings, through our negotiations on all Water Purchase Agreements, to approximately $6 million per annum," he said.
The agreements signed were the renewal of production at the Capoons Bay Water Plant on Tortola, with Aqua Design; supplemental agreement for increased production in North Sound, Virgin Gorda with Aqua Design; and supplemental agreement with Ocean Conversion on Tortola.
"As Minister of Communications and Works, I am very pleased to see this progress towards reducing the disparity between water purchased and water sold, which negatively impacted the government's annual budgetary estimates," the Minister said.
Mr. Robert Gorgol signed on behalf of Aqua Design and Mr. Meade Malone on behalf of Ocean Conversion.
In his budget address on January 16, Premier Hon. Dr. D. Orlando Smith indicated that the commencement of the additional water purchase agreement (Seven Seas Water) increased costs for water purchase by approximately $10M.
No Lower Water Rates
Meanwhile, in response to questions, the Minister said that consumers will not be seeing a reduction in rates.
"I am afraid I have to say that it won't trickle down...And subsidizing water to the consumers, effectively paying close to $20 per 1,000 gallons, the consumers have been paying on the residential basis about $12 per 1,000 gallons. So we are trying to get narrow the gap between what we pay for it and what the consumers pay," Minister Vanterpool explained.
He said, "This is the effort that we have been making, so hopefully as we continue to try to reduce the price for water to the government, the price of water to consumers will not be increasing in the short future."