Minister of Communication and Works Mark Vanterpool has disclosed that Government will have to give something in return for re-negotiation of the controversial contract signed with BiWater – a move that he yesterday revealed would result in Government saving $4 million annually in water costs.
He was tight-lipped about what exactly the government will give.
But Vanterpool gave an assurance that, whatever the National Democratic Party administration will put on the negotiation table, will pale in comparison to the relatively huge sums now being paid to BiWater.
“What we will do in return for [a new BiWater contract] is a whole lot of difference in terms of money.”
“I can’t disclose that yet. But we have to do something – something in return is being offered because I didn’t like the deal that we had [with BiWater],” Vanterpool told BVI News Online.
He made the disclosure shortly after he stated that a non-binding Memorandum of Understanding (MOU) has been signed, signalling possible re-negotiation of the 2010 BiWater contract that the current administration had inherited.
The minister declined to disclose details of the MOU, saying they will be revealed after a new contract is signed possibly in the coming weeks.
“For the sake of transparency, I just let the public know [yesterday] there is a MOU with a view to adjusting the contract. The details of it I don’t want to give you until we sign everything and everything is done. It is a major boost for the government.”
“In about two or three weeks, we think we are gonna be able to make the announcement formally [regarding details of the reviewed contract]. There are some components and we will have to make some adjustments also. But, in the long run, it will save the country a whole lot of money over the life of the [BiWater] contract,” Vanterpool further said.
Other water companies will get nothing
Vanterpool, in the meantime, stated that Government is not required to give two other companies anything in return for the cheaper rate at which they will start supplying the government with water.
Those other companies – Ocean Conversion and Aqua Design BVI – yesterday signed new water purchase agreements with Government.
The reviewed agreements, Vanterpool said, will see the government saving $2 million annually without having to give anything in return.
That is because the contracts with those two companies are significantly different from the deal that the former Virgin Islands Party government signed with BiWater in 2010.
“The BiWater contract that we have is tied into all sorts of rates and liber and a bunch of nonsense that cause us to – up to the month of January – being billed for water at the cost of $21.16 per thousand gallons. That’s a far cry from where they (BiWater) said it would be at $12.17 when they started out.”
“So we are trying to readjust so that eventually BiWater will be roughly $13 per thousand gallons, and that will be a fairly fixed amount that we expect unless electricity goes up or something else,” added Vanterpool.
Lower cost of fuel, technology
The minister, in the meantime, explained that there are certain mechanisms that allow the government to seek a price adjustment based on the reduced cost of technology and electricity in relation to the contracts with Ocean Conversion and Aqua Designs.
Those mechanisms, Vanterpool added, account for the reduced costs those two companies yesterday agreed to charge Government for water.
“The cost of producing water under the new technologies had gone way down. The technology is being improved, and so the cost of a thousand gallons was brought down. So we have forced them (Ocean Conversion and Aqua Designs) to give us a new rate based on the new technology….”
“The cost of electricity is always an issue. At the moment, that is very low because of the low cost of fuel. So we are benefiting from that now also,” Vanterpool further explained.
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