Severn Trent to manage water sector

Contract financed by DFID

Stabroek News
November 14, 2002

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The UK-based Severn Trent will from January 1 take over management of the Guyana Water Inc. (GWI) as part of a US$20M five-year management contract.

In the interim Severn Trent will from Friday be providing management staff to fill five of the top management posts at the utility.

Cabinet Secretary Dr Roger Luncheon at his weekly press briefing yesterday also noted that Cabinet had approved the issuance of an operating licence to the company paving the way for its commencement of formal operations. Expatriate managers will be appointed to five critical positions in the water company with eight others being hired on a part-time basis, Luncheon added.

The contract is being financed through a grant from the UK’s Department for International Development (DFID). It also anticipates the training of Guyanese who will eventually be equipped to assume management responsibilities.

Reached subsequently for a comment, Minister of Housing and Water, Shaik Baksh said that a formal presentation would be made when loose ends are tied up by early next week.

He was only at liberty to disclose that negotiations with Severn Trent had been successful but that some areas were still to be finalised.

Severn Trent was selected over fellow British company BiWater despite the latter submitting a lower bid for the management contract. Severn Trent this newspaper understands submitted a bid of US$5.2M while BiWater had bid US$4.5M. In 1999 Severn Trent failed to win a long-term contract for the management of the Trinidad and Tobago water system after widespread criticism of its three-year initial management term.

Dr Luncheon only said the government was aware of Severn Trent’s contract in Trinidad. He noted that the management contract will deal exclusively with the operation of the sector to deliver potable water to citizens.

However a few areas including interior locations are to be excluded from the ambit of the management contract.

The principals of Severn Trent, the cabinet secretary said, were on Friday last, hosted by the cabinet oversight body that examined the process of negotiations.

During this meeting the officials were provided with some insights into government’s interest in the quality service it wants for consumers as well as the role of the Public Utilities Commission (PUC).

“It is government’s anticipation that allied with these contractual obligations, the role of the PUC will contribute to a diminishing likelihood of a repetition of what occurred in other sectors,” the Cabinet secretary added.

The GWI is according to Luncheon “wholly and totally owned by government with them being the sole shareholder” and the management contract awarded to Severn Trent deals exclusively with the management of the sector and its responsibilities to deliver potable water to citizens.

“In discussions with the company and mindful of experience with private firm government,” he said, government was at pains to include in the contract, “standards performance criteria and an incentive component to promote greater trust by the company in fulfilling its obligations.” (Oscar P. Clarke)

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