Lower water rates could be coming soon

Negotiations to reduce the rate government pays Seven Seas Water BVI Ltd. for the 2.3 million imperial gallons of water the company supplies the territory each day are close to being finalised, according to a quarterly report filed last month by Seven Seas’ parent company, AquaVenture Holdings Ltd.

Details about the impending rate change are not yet public — Seven Seas Country Manager Elton Georges said negotiations are still ongoing, and government did not respond to inquiries on the subject — but AquaVenture is already incorporating the new rates in its financial statements.

The company stated in its first quarterly report for this year that it experienced a $400,000 reduction in revenue from its Virgin Islands operations from 2015 to 2016, “primarily due to the recording of an accrual for an expected rate change in connection with a pending contract amendment, which is currently being finalised.”

Communications and Works Minister Mark Vanterpool said at a February press conference that he hoped a new deal with the company would save government some $4 million annually.

As per an agreement signed in 2010 with the London-based company Biwater, government is paying $21.60 per 1,000 imperial gallons produced by the Paraquita Bay desalination plant, which is now operated by Seven Seas after the company acquired Biwater’s VI operations in 2015.

Other suppliers

The expected change to that agreement comes on the heels of new agreements government inked in February with two other water suppliers, Aqua Design (BVI) and Ocean Conversion (BVI) Ltd.

Mr. Vanterpool explained then that government’s agreement with Aqua Design entails the company increasing production at its Cappoons Bay plant from roughly 140,000 gallons per day to around 200,000 gallons per day.

Aqua Design will also increase water production in North Sound, Virgin Gorda, though the minister didn’t say by how much.

The agreement with OC-BVI will entail the company’s Baughers Bay plant continuing to produce about 500,000 gallons of water per day, but at a lower rate, according to Mr. Vanterpool.

All told, government plans to decrease the amount it pays the two companies from an average of $19 per thousand gallons to $13, saving about $2 million annually in the process, Mr. Vanterpool said at the February press conference.

However, Mr. Vanterpool also said the amended agreements will not result in lower residential water bills.

“Government is already subsidising water for the consumers,” he said at the time, explaining that residential water bills currently run at about $12 per thousand gallons.

{fcomment}