Water Authority privatisation debated

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.

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5 COMMENTS

  1. Born Caymanian.

    I am a born Caymanian and I want my Cake and Eat it too. I should not have to pay Income or Property Taxes. I do not want to pay for Utilities such as sewage Water and Electricity the Government should do that. I constantly complain of things that damage the environment and demand the Government address and fix them, but do not want the solution to cost me anything or change my way I live nor should I have to be involved in the solution. I was born here and I own this island it is my birth right to live for free in paradise and get a well paying job which I am not qualified nor educated for because I am a born Caymanian. I do not want blue collar work, but the Government had better not let people hire foreigners to do it I do not want to see them here. I want the Government to pay for every comfort of life on the island and make money but do not want them to collect taxes from Cayman Citizens nor make business decisions that will bring in money or develop any land into income generating opportunities. I truly believe that money grows on trees.

    Is this what we are ? It is us that put these people in office and asked that they do what it takes to help the island survive and preserve our way of life and best as possible, we need to give them a chance and show a little support for the hard job they have. Others have has their chance and couldnt get the job done. Do not object to something know can no realistic alternative for. We cant have everything w e must realize that sometime we need to be happy if we end up with the lesser of two evils. Do you realize that if they cant make this work we will all end up paying taxes like other Countries such as the US where the average citizen pays 33 percent of their income to the government? And still have to pay super high property Taxes.

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  2. Note: Privatisation to a private owner can lead to another monopoly like CUC! I have always said that government should form a public-private partnership where they would be able to hold some shares or partially own to a percent the Water Authority. Like hold onto 30 percent shares of the company. Another thing that concerns me about privatisation and forming public-private partnerships, is the sort of government we have that believes in growing in size and increasing fees to do so. Does it make any sense to say you are reducing expenses by privatisation of the Water Authority when you in return, show signs of not reducing the hike fees, permits, duties, and licenses upon the country and little man, hurting the private sector??? Such privatisation will not be benefiting to any one, but the Government to spend as they please. If this endeavor is not to reduce the size of government and its costs upon the local people, it makes no sense to me.

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  3. XOXO, I have heard a lot of complaints about this and people talking against it offering no reasonable alternative. But I have to say your idea is the best I have heard. I certainly hope someone listens. It would probably work with other government owned businesses such as the Administration Building as well.

    I applaud you for ooffering such a great idea that could actually work. However, the IPO would have to have to invite Caymanian as well as Non Caymanian investors in order to work.

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  4. Dear nj2cay
    I spent some in nj ..north..So a lot of these issues are …i dont want to say it.. but easy …been there seen it done it. Wish it wasnt so difficult..it is so simple …Yet that is the way it is.. Just want to help thats all.

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