Government voted for two pieces of legislation that will pave the way for the privatisation of the Water Authority at the Legislative Assembly this week.
On Monday evening, the majority of legislators voted the Water Production and Supply Bill and Wastewater Collection and Treatment Bill through a crucial second reading. Opposition members voted against both bills during a meeting in the Legislative Assembly.
A debate on a third bill, the Water Authority (Amendment) Bill, continued on Wednesday morning. That bill, if passed into law, will allow for the divestment of the Water Authority’s wastewater assets and operations.
Opposition members said the privatisation plan would result in a new utility charge for the treatment of sewage for customers in Cayman.
Under the Wastewater Collection and Treatment Bill (2010), all buildings must be connected to the privatised wastewater system. Premier McKeeva Bush said it was vital for Cayman to have a national sewerage system and cited the examples of flooded and damaged septic tanks following Hurricane Ivan and raw sewage in the harbour as to why such a system was needed.
He was responding to criticisms from the Opposition that sewage handling charges would put additional burdens of cost on the public, with People’s Progressive Movement MLA for George Town, Alden McLaughlin describing the potential sewage collection and treatment fees as “another cost to the householder who cannot pay the current water bills”.
Mr McLaughlin asked what the rationale behind the privatisation of the Water Authority was, saying that after several hours of debate and comments by the Deputy Premier and Minister of Works Juliana O’Connor-Connolly, who presented the bills, and Minister of Education Rolston Anglin, it was still not clear to him or the public exactly what kind of deal the government was proposing.
He said he believed that the bills were “purchaser-specific draft legislation” and that they had been drafted from “a checklist of all that needed to be contained in the legislation”.
Mr. McLaughlin said he believed the government already had a buyer in mind. “None of this has been developed in a vacuum with government looking to find the best possible arrangement… I have no doubt that much that is contained in these three bills, which are about to become legislation, is driven by what the proposed purchasers or lessees of the Water Authority want and have said is required for them to sign on the dotted line,” he said.
Premier Bush responded later to those comments by saying: “The only deal I know about is I need money to run the country and we have to utilise the assets we have. The Water Authority will not be sold, it will be leased. When you don’t have money, but you have an asset… you utilise it.”
The PPM member for George Town also queried why “concessionaires” – those licensed to produce and supply water or treat and collect sewage – would be exempt under the law from obtaining a trade and business licences. Under the proposed legislation, those operators would be considered franchisees and therefore would not require local partners under the Local Companies (Control) Law.
Describing this a “radical shift in how business in this country is conducted”, Mr. McLaughlin said that Caymanians would be denied an opportunity to participate if foreign entities became franchisees.
Arden McLean, PPM member for East End, queried why the government was selling or leasing a profitable entity like the Water Authority and suggested instead that the administration should consider giving away the Cayman Islands Turtle Farm or the Stock Exchange. “I don’t know why we sell things that are good,” he said.
Ms O’Connor-Connolly insisted the leasing of the Water Authority assets was necessary to help Cayman reduce its debts, as stipulated by the UK Foreign and Commonwealth Office. “At the end of the day, it is the general consensus that this is a bitter pill, but it is still not as bitter as income tax or property tax,” she told lawmakers.
She added that selling a profitable business was logical because “no-one wants to buy a business that is not making a profit, unless it is a high-risk investor”.
The deputy premier said that under the proposed legislation, the consumer would be protected and that the Water Authority would regulate concessionaires and monitor all tariffs and rate structures.
Mr. Bush said he had faced obstacles to plans to privatise the Water Authority since his party were elected in May last year. “Twenty months and we’re only getting to this stage,” he said. “People put stumbling blocks in our way and stopped us every which way they can…”, he added.
The House was adjourned until Wednesday morning, when Mr. Bush said he would continue his comments on the debate.