Cayman-based Consolidated Water has entered into a binding letter agreement with its customer, the Water and Sewerage Corp., to increase the daily production capacity of its Blue Hill plant in Nassau, Bahamas,
The plant will increase production capacity by 67 per cent to 12 million US gallons from 7.2 million US gallons.
At the same time, Consolidated Water and WSC extended the term of the original Blue Hill service contract by about five years until 2031. Consolidated Water will finance the design and construction of the new plant and operate and maintain the new, expanded facility over the life of the agreement.
“We are pleased to announce this agreement with WSC, which will allow the citizens and businesses in Nassau and throughout the entire island of New Providence to sharply reduce their dependence upon more expensive water that is currently barged from Andros Island to port facilities at Arawak Cay on New Providence Island,” said Consolidated Water CEO Rick McTaggart. “By expanding the Blue Hill plant, WSC should eliminate almost $7 million in capital spending that would have been required to relocate the present barging operation from Arawak Cay, and should realise several million dollars in additional yearly cost savings by replacing barged water with locally produced desalinated water.
“The economics of the Blue Hill facility, which is our largest plant and has been delivering water to WSC since 2006, should significantly benefit from the expansion in capacity and the 5-year extension of our contract with WSC.”
Confidence of government
Mr. McTaggart noted confidence the Bahamian government has placed in Consolidated Water by selecting the firm to provide potable water production infrastructure for the people of New Providence.
“We appreciate their confidence in our company to deliver this expansion within the government’s very tight schedule,” Mr. McTaggart said, adding that the capacity expansion is scheduled for completion in this year’s fourth quarter, following which the combined production capacity of our Blue Hill and Windsor plants in Nassau will reach approximately 14.6 million US gallons.
“Our company believes that the demand for potable water will continue to exceed the availability of natural water resources in a growing number of countries throughout the world in coming years. While this should result in new project opportunities and geographic growth for Consolidated Water, we are well aware of the potential to increase the scope of our activities within existing markets, as the Blue Hill expansion illustrates,” Mr. McTaggart explained.
“Our ability to grow within existing markets can only be realised if we maintain our production efficiencies and provide excellent service to our customers. These are, and will remain, our priorities in the Commonwealth of the Bahamas and other markets that we currently serve in the Caribbean region,” he concluded.