Project background
The Water and Sewerage Company of Saint Lucia (WASCO) is the state-owned incorporated company that currently provides water supply and sewerage services in St. Lucia.
St Lucia offers a stable political and business environment, an independent judiciary, modelled on British law and an independent Appeals Court common to most of the islands of the Eastern Caribbean. There is strong regard for democracy and the rule of law, apparent in efficient working of the parliamentary system and the fact that changes in leadership have always occurred through democratic process of free and fair elections, which are held every five years. The growth momentum which has been established in the St. Lucia’s economy over the past few years is projected to continue.
The water and sanitation sector is a key factor in the economic development of St. Lucia as it is vital for hoteliers and developers to have efficient access to basic services and remains, as elsewhere, a basic service that is a defining element of the quality of life for the general population. Unfortunately, this sector has been suffering from a shortage of supply mainly due to seasonality and bottlenecks in the supply system linked to delays in infrastructure investments as well as growing losses. The ongoing development of the tourism sector will be the driver of the demand growth in water services provided the company is recapitalized and efficiency in operations is introduced.
Water
There is a total of 751 km of water mains around the island, consisting of approximately 55 km of water supply mains and 696 km of trunk and distribution mains. The service pipes have a length of 255 km. Of the total of 696 km, approximately 321 km are in the North and 375 km in the South. WASCO owns and operates 80 tanks and reservoirs with a total storage capacity of approximately 7.5 million imperial gallons (34.1 thousand cubic metres), and 67 water pumping stations. Pumps are typically installed in small, 10ft by 10ft pump houses with asphalt roof or galvanised corrugated sheets.
The water sources of St. Lucia are the John Compton (Roseau) Dam and Reservoir, and 29 rivers intakes, either in the form of weirs or river bank inlet structures. Some of them, especially the small ones, are spring sources. There are 22 gravity and 8 pumped sources. WASCO owns and operates 8 water treatment plants (2 in the North and 6 in the South) excluding the reservoirs/tanks sites where water is chlorinated.
WASCO divides its client base in five categories: domestic, commercial/industrial, government, hotels and ships. Detailed statistics from the 2001 Census indicate that 78% of households have water piped directly into their dwelling or yard, and that the customers connected to the WASCO supply network are concentrated in the main urban areas of Castries, Gros Islet and Vieux Fort. Annual demand is projected to grow, due to population growth and increase in St. Lucia's tourism industry, from 2.8 billion imperial gallons today to 5.2 billion imperial gallons daily by 2036.
Sewerage
The WASCO-owned sewerage network is approximately 28 km in length and is concentrated in two areas - Castries and Gros Islet/Rodney Bay - with approximately 16.5 km and 11.5 km respectively. The Beauséjour Wastewater Treatment Plant is the only WASCO operated wastewater treatment works on the island. The plant is a series of waste stabilisation ponds with a total design capacity of 0.9 MGD (4.1 thousand cubic metres per day). WASCO operates 11 sewage pumping stations: 6 are in the Gros Islet/Rodney Bay area and 5 in Castries. The pumping stations in Gros Islet/Rodney Bay were built in the 1990s while. the ones in Castries were built in the early 1950s and 1960s. The capacity of the sewage pumping stations varies between 4 and 96 kW.
Growing demand: The population of St. Lucia is estimated at 160,000. Current demand is not fully met and it is expected to grow due to population growth and seasonal demand from the growing tourism sector (0.3 million stopovers and 0.5 million other visitors in 2005).
Regulatory Arrangements: The New Water Act establishes in Section 97 the “cost plus” scheme for setting tariffs: after an initial transition period of three years, in which Tariffs will be held at current levels, tariffs will be established on the basis of efficient costs plus a reasonable return on capital. Tariffs and service quality will be regulated by an independent Water Commission which will be appointed prior to the launch of the transaction process.
Dominant provider: The PPP will be the de facto dominant service provider of water and wastewater services for the island of St. Lucia.
Co-investment: The Government is conscious of the need for significant investment in the water sector, and is willing to help defray the investment burden by financing selected major water-resources projects. To supplement water supply in the North of the Island, the Government has invested US$ 8 million on the Northern Water Supply project, financed through a World Bank loan and IDA credit. This project was completed in the third quarter of 2007 and has resulted in increased availability of drinking water to meet pent up demand for the foreseeable future. In addition, the US$ 5 million CDB financed Fifth Water Supply Project is addressing concerns with water transmission, treatment and metering.
Investment requirements: The Government will require that the PPP undertakes a 6-year strategic investment program with the objective of providing all existing customers with a continuous service that meets regional standards of quality and service, and of expanding service coverage to potential consumers throughout the island within 6 years.