Gov. Charles Turnbull submitted proposed legislation to the Senate on Tuesday that would turn over 80 percent of the V.I. Water and Power Authority to Southern Energy, though he already has some $100 million in proceeds from the deal spent.
The proposal, negotiated by a government team, would give the Atlanta-based company 80 percent ownership of WAPA in a deal worth between $380 million and $400 million over 25 years. The immediate value of the deal to the government is more than $148 million, including the forgiveness of $31 million the government currently owes WAPA and other indebtedness, Turnbull said Tuesday.
Of the $148 million, Southern Energy would pay the government approximately $105 million in cash up front.
Most of that money has already been earmarked to address a laundry list of projects in the territory. According to Turnbull, if the deal is approved by the Legislature the cash payment will be used accordingly:
– $20 million to start a public education trust fund, the income of which will be used for upkeep and maintenance of schools.
– $20 million to capitalize the V.I. Government Bank.
– $15 million to capitalize a V.I. investment fund, the income of which would go toward paying step increases owed government workers.
– $13.7 million for step increases owed government workers, including teachers.
– $16 million for territorywide capital improvement projects, including $8 million for a new cargo terminal at Enighed Pond on St. John and $5 million for the construction of new sports complexes on St. Croix, St, Thomas and St. John.
– $5 million for police and fire stations.
– $4 million for the immediate repair of schools.
– $3 million for educational equipment and supplies.
– $3 million for new Fire Service complexes on St. Thomas and St. Croix.
– $2 million for tourism advertising.
– $1.25 million for the repair and renovation of the territory’s public health facilities, including $750,000 for the Charles Harwood complex on St. Croix and $500,000 for a long-term mental health care facility on St. Thomas.
"I call on the Legislature to seize this moment of opportunity," Turnbull said. "I believe the public-private partnership embodied in this agreement . . . will be a transforming event in the life of our community."
Turnbull said the deal would enhance the territory’s ability to deliver utility service on a more "efficient and cost-effective basis."
Before any deal is done, however, the Legislature will have a go at the proposal, said Senate President Vargrave Richards. While Richards said he hasn’t meet with the majority caucus to chart the course for the proposed bill, he said it will probably be heard in Committee of the Whole sessions rather than being dealt with in subcommittee.
But because of the upcoming Easter holiday, St. Thomas Carnival, reviews that must be done by the Senate’s post auditor and legal counsel, and public hearings, Richards said it may be a while before the senators debate the proposal.
"It is my feeling that there should be hearings on all three islands," Richards said. "I anticipate that it will be several weeks before we hear it."
When asked what way his colleagues might vote on the controversial issue, Richards laughed. "I have no read," he said. "That would be presumptuous.
"It will be given its fullest consideration and the people will be given the opportunity to give their input," he said.
The 25-year deal includes $12.6 million in fuel, property and gross receipts taxes; $37 million in income taxes beginning in the 10th year; $2 million in special accounts set up by the company for economic development; $41.4 million in dividends from the government’s 20 percent stake in the partnership; and $154 million through Southern Energy taking over WAPA’s bonded debt.
