FINANCIAL SAVINGS OF $20 MILLION FROM INNOTECH DEAL
The financial savings to the Barbados Water Authority (BWA) from the recent agreement made with Innotech Group of Companies will amount to a “conservative estimate” of BDS $20 million.
Mr. Abrahams stated: “From this particular deal over the life of the BERT programme, we are going to save a minimum of 20 million dollars…and if we actually factor in the other things that were calculated at cost, as oppose to a commercial rate, the actual savings are likely to be more.”
The Water Resource Minister further explained that the $20 million in financial savings was also dependent upon the debt repayment arrangement between the Barbados Water Authority and Government.
Pointing out Government’s main objective for entering into negotiations with Innotech “was to end the one-sided, unfair arrangements/contracts awarded“, Minister Abrahams noted that the year plus negotiations reached a commercial settlement on 17 outstanding issues, 13 of which originated with contracts authorized under the former Minister of Agriculture, Food, Fisheries and Water Resource Management.
Detailing the previous arrangement between Innotech and the BWA, Minister Abrahams revealed that the new arrangements and benefits include the BWA having immediate and outright ownership of a variety of critical equipment such as portable desalination units, personal tanks, community tanks, water tanker trucks and functioning smart meters.
Another agreement made was the end to the financing, leasing and maintenance arrangement for the BWA’s infrastructure. Instead, the BWA has purchased certain equipment outright or agreed to a transparent pay-as-you-go arrangement for works necessary to be performed by Innotech.
Minister Abraham also said that there would be the waiver of punitive penalties for default and late interest, and the continuation of the Grandview Reservoir project. The BWA has also offered a right of first refusal on a renegotiated saltwater desalination project.
Mr. Abrahams stressed that this position was taken because the contract was awarded at unsustainable rates and had not yet started.
He added: “Neither I nor the Government made a decision to throw out the baby with the bathwater and write off desalination as an option to contribute to water security in Barbados…(but) we were not going to follow through with egregious contracts…. Our first duty as a government is to the people of Barbados, not to protect the profits of any company or companies.”
Minister Abrahams indicated that the BWA was awaiting a report from the Auditor General about the Authority’s contracts, procedures, practices, and structures, and upon receipt of that report would decide on the way forward.