PM: Desalinated water project bankrupted WASA

THE PRIME Minister said the project to purchase desalinated water has bankrupted WASA.

He was speaking yesterday as the Standing Finance Committee considered the estimates and spending of the Public Utilities Ministry.

Chaguanas West MP Ganga Singh asked about a $300 million reduction to WASA and how would the authority be able to function with this significant reduction. Le Hunte explained the major reduction was materials, supplies and payment of money for desalinated water which is about US $6 million per month. He said the payment for the desalinated water from Desalcott was being dealt with via a loan which was being negotiated.

Tabaquite MP Surujrattan Rambachan asked why a loan was being taken to fund recurrent expenditure. Finance Minister Colm Imbert said the Desalcott project had cost the country between $5-$10 billion since inception and he said it might have been a better idea to build some dams.

"It has become impossible to finance the Desalcott expenditure out of recurrent revenues. Impossible. So we have to go by way of loan financing. We simply don't have the cash flow."

Rambachan asked if the water was not supposed to be used for Point Lisas industries but Imbert said water sold to the industrial estate was a profit centre for WASA and by using expensive desalinated water the profitability of the organisation went down, reducing the free cash flow. He said the UNC used the desalinated water for domestic use and Rambachan asked why the Government did not reverse the arrangement. Imbert, however, said there was a long-term contract in place for desalinated water and asked rhetorically if the contract should be cancelled.

Rambachan asked why Desalcott was being paid in US dollars, $72 million US per year, and Imbert said that was the contract the UNC entered into.

"You negotiate a US dollar contract and then telling us go and break it?"

Dr Rowley said when the country went into desalinated water the issue was raised as a potential problem and a question was asked on the Hansard whether the desalinated water would enter the domestic supply and the answer was "no."

"We entered into the contract and then the water entered the domestic system and it has been there and it was expanded. And as a result of that, that project has bankrupted WASA permanently and we now have to borrow money because where we were earning money in Point Lisas we now have to find money to pay and that has put WASA into a permanent bankruptcy."

Laventille West MP Fitzgerald Hinds said the contract was up to 2036.

Imbert said WASA was in a tenuous situation and had to accept the water at a loss. He said if WASA was not burdened with this contract then the authority would have been able to break even or be in the black. Public Utilities later reported that WASA's debt currently stands at $3 billion.