NWC hunting private partners
The National Water Commission (NWC) has wrapped up a prefeasibility study on the financing of new water infrastructure to align developments along the north coast, even while it continues to assess how best to attract private capital, given the level of investment required for its systems.
The state-operated water agency expects a substantial rise in demand for water in about six years when hotel projects in the works eventually hit the market.
So far, the NWC has prepared a water demand model that can be used to assess water needs for northern parishes, and a water resource study is under way.
The various studies will be followed up by invitations to investors to partner with NWC on developing infrastructure.
The NWC is "essentially open to consider all types of mutually beneficial private-sector participation", to meet the needs of consumers, especially on the north coast where both residential and hotel developments are exploding, said the agency's Corporate Public Relations Manager Charles Buchanan.
POTENTIAL BUSINESS MODELS
While the terms of the prospective public-private partnerships (PPPs) are yet to be fully determined, Buchanan said the business models under consideration include financing, construction and operation of new systems by private providers for various projects under consideration for deployment in various parts of the island.
Several projects are currently the subject of prefeasibility and feasibility studies to determine the best approach, he said.
They include the Northern Parishes Water Supply Project, according to a document authored by Lewis Lakeman, NWC's assistant vice-president for PPP and project financing. Its estimated cost is US$75 million.
"Over the years, NWC has had to contend with challenging topographical and infras-tructural circumstances, with limited resources and ever-increasing customer expect-ations. Despite many different approaches employed at different times, NWC has never been able to sustain consistent growth and financial viability, resulting in below par performance in a number of critical areas," said Lakeman.
"The NWC has more than 100 significant engineering projects or contracts of various types - water, wastewater, hydrogeological - at the various stages of the project implementation cycle. But, it remains keenly focused in developing partnerships particularly with the private sector to further improving potable water and wastewater services," he wrote.
The focus on private partnerships is a different mindset for the agency whose modus operandi over time had been to hire contractors to build systems on its behalf. Still, it has used this approach before, starting with the Soapberry water treatment plant in St Catherine, which was executed as a PPP project, but the upcoming Northern Parishes Project is expected to be its biggest to date. Its scope includes construction of new water treatment plants, water conveyance facilities pipelines, pumping stations and water storage tanks.
The project document authored by Lakeman described the context for the project as the "significant foreign investments in the hotels and housing sectors along the north coast", which is expected to intensify over the next four to six years.
The prefeasibility study will assist in the assessment of financing and implementation options, including public-private partnership arrange-ments for part of or for the whole project.
Buchanan said the Northern Parishes Project is just one of several being developed or proposed for PPP arrangements. The agency is currently in negotiation for the Content Water Treatment Plant in St Catherine, for example.
The NWC provides 90 per cent of water needed locally. Approximately 30 per cent of the commodity supplied by NWC is potable water for domestic and industrial purposes, while the remaining 70 per cent of abstracted water is used for irrigation.