By Elesha George
The government will take on approximately EC$169 million of financial liability to allow the Antigua Public Utilities Authority (APUA) to improve utility infrastructure on the island.
The resolution which passed in the Lower House without debate, authorises the government to act as guarantor of the 15-year loan.
The loan was secured by the local utilities company from a syndicate of banks led by the Antigua Commercial Bank (ACB).
The total loan amount is for EC$168,915,000. It is to be repaid at a seven percent interest rate per year with an overdraft amount of EC$5.2 million at 7.5 percent a year, for the next 12 months.
Interest for the remaining 14 years of payment will be at 6.25 percent with an overdraft facility of more than EC$5 million at a rate of 7.5 percent.
The overdraft amount is meant to assist with the APUA’s working capital while the loan is for various infrastructural upgrades and debt consolidation.
The biggest portion – EC$90 million – will be used by APUA’s Telecoms Unit, a significant portion of which, Prime Minister Gaston Browne said, is to construct a sub-sea cable to improve the telecommunications infrastructure.
Once the statutory corporation builds its own broadband services, Browne said that APUA no longer has to buy from domestic third parties, to include Flow and Digicel.
“APUA has had to purchase the broadband services at an extortionate rate from these local suppliers, then to retail the service at a cheaper cost than Digicel and Flow. Now, that is obviously placing APUA at an uncompetitive disadvantage,” Browne explained.
The prime minister expects that the price of broadband services provided by the utility company will reduce while speeds increase, making for an overall better experience.
Meanwhile, more than EC$30 million will go towards APUA’s Water Business Unit; the payment of outstanding balance to Antigua Power Company totalling EC$21,195,000; and debt consolidation totalling more than EC$27 million.
“APC will be repaid in its entirety,” Browne told Parliament on Monday, adding that “there’s also some debts with three existing institutions totalling EC$27.5 million approximately. Those too will be retired.”
The loan was considered and approved on September 16 by Cabinet and will involve re-piping, the addition of three new reverse osmosis plants and improvement to broadband using under-sea cable as well as fibre to the home.
The prime minister said that the upgrades are necessary to ensure that APUA “can supply the full capacity of the water demands for Antiguans and Barbudans”.
“As a consequence of climate change, we not only have more frequent and ferocious storms, but drought has been a significant factor,” he remarked, as he blamed the weather condition for propagating the country’s water woes.
Expanding upon the water situation, Browne highlighted what he claimed is “a significant increase in wastage” by some residents as a result of low water rates. APUA charges customers $21 for every 1,000 gallons they use.
As a remedy to reduce instances of wastage, Browne has proposed the introduction of tiered water rates – low and premium rates, he suggested to MPs.
He said “anything above a particular level” will attract higher rates than areas with lower volumes of water usage.
“At some point, we will have to review those rates in order to control the wastage of water,” he stated.
He explained that the premium rate would not be onerous and that the system would not disenfranchise poorer or vulnerable citizens, proposing further that the water rates in their areas be capped, based on regular water usage.
“If we continue to keep the water rate artificially low then a lot of people will continue to waste the water – use the water to wash their cars and some people waste the water on their lawns because it is so cheap,” he said.
Browne said while the time had not yet come to introduce new rates, there’s a need for APUA to look at the volumes and make some adjustments at some point.
“After you spend all this money putting the water infrastructure in place, I think that some adjustments will have to be made,” he concluded.