Ocean Conversion’s contract to operate water plants in North Sound and Red Gate expired earlier this month, but the company will continue to run them until at least February while the Water Authority reviews bids for a new operating agreement. Ocean Conversion is also undertaking some US$138,000 in plant repairs to membranes that have been deemed a “safety hazard,” according to Water Authority board meeting minutes.
The Water Authority’s board meeting minutes from May explained that Ocean Conversion will continue to operate the seawater conversion plants under the same agreement terms to ensure a smooth transition from the current operator to the new plant operator. Bids from eight companies were scheduled to be reviewed on June 27, and Ocean Conversion planned to be one of those bidders, according to the latest quarterly report from its parent company, Consolidated Water.
Ocean Conversion earned a combined $7.2 million in revenue from these water plants and another in North Side in 2017, states the report from Consolidated Water, which also sells water to residents in the West Bay and Seven Mile Beach areas.
While Ocean Conversion continues to operate the North Sound and Red Gate plants, repairs are also under way to replace some of their high-pressure membrane vessels, the Water Authority’s minutes state.
According to the minutes, the high-pressure membranes are at the end of their useful life and are considered a safety hazard.
“Some time ago, one of these vessels ruptured suddenly without prior warning and it is expected that others may follow,” the Water Authority minutes state. “The Engineering Services Department recommends that the high-pressure membrane vessels that are at the end of their useful life be replaced.”
The Water Authority also stated that fixing the parts now will eliminate uncertainty for the bidders and reduce the amount of work required immediately following the transition to the new operator.
Ocean Conversion reportedly offered to replace the aging parts for US$138,000, and Water Authority board members had no objection to the authority proceeding with the replacements.
Meanwhile, negotiations have dragged on with another Consolidated Water subsidiary, Cayman Water, and the Utility Regulation and Competition Office over the company’s license to provide water to the West Bay and Seven Mile Beach areas.
The retail license was originally set to expire in July 2010, but has been extended several times over the years so that government and the company could reach a new deal.
Consolidated Water states in its financial reports that government is looking to restructure its water-supply deal with Cayman Water in a manner that could significantly reduce the company’s income.
OfReg’s 2017 annual report states that the regulator expects to finalize negotiations by the end of this year.