- Government is looking to partner with the Chinese to implement a number of critical water projects
- US$1 billion is required to increase coverage, reliability and efficiency of potable water systems
- These projects are to be implemented over 10 years
Minister of Water, Land, Environment and Climate Change, Hon. Robert Pickersgill, says the Government, through the National Water Commission (NWC), is looking to partner with the Chinese to implement a number of critical water and sewerage projects worth billions of dollars.
The Minister said talks are already underway in this regard and he is hoping that a deal can be worked out soon.
Mr. Pickersgill was addressing the media following a meeting between Prime Minister Portia Simpson Miller and the head of Complant in Beijing, on August 21.
The Minister said that based on current plans, it is estimated that US$1 billion is required to increase coverage, reliability and efficiency of potable water systems across the country. A further US$1 Billion is required to install new central sewerage systems in 16 major towns, he said.
He noted that these projects are to be implemented over 10 years and are “very, very necessary, especially in areas of Savanna-la-Mar (Westmoreland) and Falmouth (Trelawny).”
The Minister said given the lack of fiscal space, and the agreement with the International Monetary Fund (IMF), there is a limit as to how much the government can borrow at this time and the Chinese are aware of this.
Given these constraints, he said the government is proposing to go the route of Public Private Partnership (PPP) arrangements, using the Build, Own, Operate and Transfer (BOOT) approach, to implement one or more of the required three potable water treatment plants, each of which would have a capacity of 15 million gallons per day; and one or more of the required 16 new sewerage treatment plants and associated collection networks, which are urgently required in separate major towns.
He revealed that of the possible investors, Complant is prepared to go the route of the BOOT. “They have already done their studies and we are to get back to them,” Mr. Pickersgill said.
The Minister noted that the Chinese is also promoting the use of concessionary financing to fund selections from the NWC’s parish plans for potable water systems improvement.
Mr. Pickersgill pointed out that ideally, such loans would be directly to the NWC and would not require a guarantee from the GOJ, but this would be on the basis that the NWC can demonstrate it has the ability to repay the loan.
“They are prepared to give a moratorium of five years with interest rate of 2 to 3 per cent, which is very attractive, but if we are to ink that deal, the NWC will have to demonstrate to the Ministry of Finance that when the moratorium period is over, they will be able to paddle their own canoe and the NWC tells me that they are able to do that,” he said.
The Minister pointed out that a business planning exercise at the NWC indicates that with the proposed tariff adjustments that have been asked of the Office of Utilities Regulation (OUR), and strategic selection of projects, the capital investments would result in the necessary system improvements, while simultaneously enhance the revenue generation and profitability of the NWC.
Mr. Pickersgill said the government, through the NWC, is committed to improving potable water supply and sanitation services to achieve national targets relating to the country’s comprehensive development plan – Vision 2030.